How Socialism Could Benefit the USA - Coursework Example

How Socialism Could Benefit the USA

Socialism is defined as a range of social and economic systems that are characterized by social ownership of wealth and democratic control of production means. Socialism is also aligned with political movements and theories that support its effectiveness. Social ownership is the collective or cooperative ownership where citizens are entitled to equitable ownership. Currently, the American style capitalism has led to the creation of high amounts of wealth. However, capitalism has led to the concentration of wealth among few people leaving many people poor. Capitalism is known for the provision of an incentive for people to be productive; however, it leads to economic biases and intervallic economic downtowns (Kornai). Following the failures of the capitalist economic system in the United States of America, it is suggested that the economy would be superior after adopting a socialist system.

Socialism gives the opportunity to the public to own resources. Through the socialist ideology, the state would own every piece of land, property, businesses, and production means that is private now. The main advantage of this is that every citizen would get an opportunity to be employed in the public enterprises. Moreover, there would be no reason for anyone to manage chances and pocket extra profits. Another important aspect of socialism is that America would not have stock market, any private financiers or even distortion opportunities that occur due to the capitalist system (Kornai). The government would be the sole decision maker about how to manage the resources in a manner that benefits every member of the community. Through public ownership, everyone’s requirements would be satisfied.

Capitalism is dependent on the market forces in the allocation of resources. Everyone has to pay for anything that they need in the market. The theory of demand and supply is mainly followed in the market system. Entrepreneurs generate ideas in the market and make investments that benefit them. The process of building up a business depends on the opportunity presented to the private business organization through the demand and supply concept. If the demand for a product is high, the private business owners find ways to increase the prices for better profits which might lead to extortions (Asselain). On the other hand, if a business idea fails to generate profits, they experience the losses for the investment. However, in the socialist system, the government does not make any plans for the private sector. That might prevent overpriced commodities in the market and fewer extortions.

Elements of socialism

The American economy has always been a capitalist but also shows some elements of socialism that the government has maintained in order to ensure the welfare of all Americans. One of the socialist elements in America is the social security arrangement that offers money for support to American employees after retiring. The government has achieved that through the taxes system that collected them during the years that the persons worked. In addition to that, the government also compensates unemployment benefits to employees who lose their jobs due to market distractions (Asselain). That ensures that all citizens can afford the daily life expenses without struggling. The government of the united states of America has also created policies that fall under the socialism concept by offering the affordable care act that lowers the cost of health across the country.

Other elements of socialism that the Americans have experienced is the national safety and communal education. The government offers the services to ensure that all people of different social classes access education and security inside the country. The government through the senate and congress make policies that strive to ensure that the country is favorable to live for the rich and the poor. That lowers the cost of living for the lower social class that has suffered due to the extortion brought by the capitalist system in the economy. It is worth notable that the capitalist system has led to the creation of wealth for a small percentage of the community rather than a balance of everybody (Kornai). The socialist system is able to distribute wealth equally to the community through policies and effective coordination from the government side.

Socialism not for the United States of America

Pure socialism means that no one would exploit others to get wealthier. The socialism idea may be opposed by few Americans who have earned a lot of wealth through the capitalist system. However, the socialism has been tried in other republics such as China, Netherlands, Cuba, Sweden, Canada, Ireland, Finland, Norway and Sweden among others. The implementation of the socialism idea fails where a country has been developed and established on the hierarchy of social classes especially politicians at the top. The process of distributing wealth and closing the gap between the wealthy and the poor can bring conflicts among the people. On one side, the politicians who run the government want to stay on top and earn more as the people want to enhance their share of wealth in a country (Asselain). Each group will focus on its needs first. In the end, the wealthy people stay at the top with their families. The economy may also experience a lot of corruption if the government socialism policies are not designed effectively.

Currently, the American capitalism has not achieved equal distribution of wealth. Everyone in the community aspires to create an entrepreneurial idea and act in the best interest of his own. That makes it difficult to reduce the number of poor people in the economy. The lower social class in the society gets money and wealth to sustain their basic needs under the extortion of the wealthy class in the community. Socialism should not be seen as a way of dealing with market distortions; it is a way of having the government performs a larger role in the creation of businesses that offer an opportunity for everyone (Boettke). It is not risky to invest in things that do not work. The government reduces the worries of failure for the people. The community is only going to reap the rewards under a socialist system.

Socialist economies in the World

Cuba

The Cuban economy is one of the most successful socialist economies in the world. The nation has a mostly state-run economy, free education paid by the government at all levels, a national health care program, subsidized food programs, subsidized housing, entertainment, and utilities. The subsidies are given by the government compensate the low salaries and wages for the Cuban works. This makes them better than many countries believed to have strong economies in the world such as the United States of America (Spadoni). The Cuban economy does not have any stock exchange in a way that guarantees capital free economy. One of the biggest achievement in Cuba is that the state owns almost 80 percent of the workforce.

The socialist economy in Cuba has evolved since 2010 when president Raul initiated major economic reforms to achieve a mixed economy that can allow free market mechanisms, make self-employment easier, lay-off unnecessary government employees, and reduce the government control of small businesses. The idea started when the state-run subsidies became insufficient in support of social programs for the citizens. In addition to that, the community relied on aid programs from other countries and global organizations (Spadoni). Most importantly, the community had many poor people as well as the widening gap between the poor and the rich. This became a major burden on the social programs since the poverty levels were very high.

Currently, Cuba is better situated with a parallel financial system that supports social programs in the economy. In addition to that, the country operates a free market economy in the international business, export and tourism sectors. The country is able to manage the situation of reliance in the income tax payment. For instance, if employees are laid off, there are usually further plans to absorb them in the private sector. Since the government rarely lays off employees, the chances are high that the people will manage their lifestyles despite their low incomes from the government and private sector. The main advantage in the low but sustainable payments for the Cuban employees is that even the private sector has no reason to increase the prices of commodities that are not covered in the government managed subsidies (Spadoni). Although the economy is competitive for business organizations producing goods and services, the market has been made free such that the community is not extorted by neither the private sector nor the government. The socialist economic system is highly controlled by the new laws in order to motivate and attract higher investments. In addition to that, the economy is introducing tax-free zones to conduct business freely in order to allow tariff-free profits for foreign companies. This is a good socialist strategy that ensures that the foreign products and services are not charged high prices.

China

The Chinese economy is controlled by the government to help the citizens through a socialist model. The nation offers universal healthcare to help the citizens of the highly populated nation in the world. Although the economy is not fully socialist, the society has been greatly benefiting from the scheme. Interestingly, the Chinese economy has a well operational private sector that controls a large GDP for China. China has managed to rapidly develop its economy by switching it from the socialist economy to a socialist market economy. In other words, the Chinese economy balances between a capitalist and socialist economic approach. The state makes policies that allow entrepreneurs to invest in the economy although with some limitations. The government controls to ensure that the people have rights to own property but the distribution of wealth is equal to every part of the country (Brodsgaard and Rutten). The government has also allowed the international companies to access the special economic zone that supports the fast growth of the economy. In other words, the mixture of the capitalist and socialist approaches has succeeded effectively in China.

The United States of America can learn from the example of China and Cuba in regards to the utilization of the socialist approach. The government can create policies that allow equal dissemination of wealth among the community, provide more employment opportunities and enhance the quality of life. Already the government has started funded public education and the affordable care act (Obama Care). However, there is still a long way to go since the health care act implemented for the public does not meet the needs of the poor Americans. Although many people are insured, the realization that they are underinsured when they find a difficult situation that needs more finances. That implies that most of the economic policies in the country support the capitalist system (Spadoni). Moreover, the capitalist system is supported by the political heavyweights in the country; that lowers the acceptance level of the socialist approach.

Features of a Socialist Economy

Collective ownership

In a socialist economy, all production channels are owned by the community through the government. The system ensures that no individuals can hold property beyond a certain limit (Morris and Polese). The system can work in the United States of America in the same way it worked for Cuba and China. The private sector is allowed to operate in the economy but at a limited percentage to avoid extortion that is presented by the capitalist idea. The government utilizes the resources to satisfy the needs of the people such as funding social programs in healthcare, for the elderly, sports and education among others. With the government in control through clearly drafted policies that favor the society. It means that there are more employment opportunities for the citizens. Particularly America has been suffering in the aspect of unemployment among its young people. The socialist system can expand more chances for employment to keep everyone happy.

Equality

With the utilization of a socialist system, America can achieve equality between the rich and the poor. The capitalist system used in America has largely expanded the economy. However, very few people own wealth in the country. That is an implication that the capitalist system will broaden the gap between the rich and the poor (Fiszel). The country must strategize on how to stop the struggle of the social classes in the country. That can be manifested in the social, economic and political factors in the country. The government of the United States can achieve socialism through strategic economic planning. The government can adopt a central planning authority that makes plans for the economy and supervises the implementation. Being a large economy in the world, America has no room to make economic mistakes. However, for the sake of the future American generations, the socialist economic approach could be beneficial.

No competition

In a socialist economy, there is no competition in the market (Rakowski). The current economy uses the capitalist approach that allows competition based on demand and supply. The companies in the market focus on expanding their profits depending on the demand. In addition to that, private entrepreneurs invest in the economy with the aim of competing for a large market share. Based on the capitalist model, the government is the entrepreneur. It controls all production means by employing people from the community and lowering the prices of the commodities. Most importantly, the government ensures that there is no extortion in the market. The government also makes major decisions regarding the economy, investment, consumption, distribution of commodities and foreign exchange among others. The government of the United States already has all institutions needed to make policies that can transform the economy from capitalist to socialist.

Work and Wages

In a socialist economy, work depends on the ability, and the wages depend on the needs of the individual. A good example is Cuba that has most of the workforce employed by the government and paid lower wages in comparison to America. The industries are run by persons who are competent through education qualifications and experience. The payments are made according to need. The payments given to the workers are low because the government has already taken care of subsidies such as healthcare, education, lower priced goods, tax-free zones for foreign companies and much more (Pope). In other words, the state wages help the citizens to meet other needs since their basic needs are generally met by the government. The government of the United States can manage such an economy to ensure that the social needs of the community are met. That brings a balance in the aspect of the poor and rich in the community. It is worth notable that the capitalist economy has led America to have extremely rich people while others cannot satisfy basic needs.

Effective social welfare

Through the socialism system concept, the government has a sole duty to meet the social needs of the society. It has to ensure that there is no exploitation of the lower social class which has a larger population in the country. The private sector cannot exploit the people through underpayments since national policies are controlling the minimum wages. When the goods reach the market, the government also regulates the prices of the commodities through taxes and the tax-free zones for private companies (Zalesco). It is worth notable that the system should only be implemented to care for the social needs of the larger population rather than the few who have been favored by the capitalist system.

Conclusion

The United States could benefit from socialism approach. The country has experienced the negative consequences of the capitalist economic system. The system has strengthened the economy, but only few people in the society are very wealthy. To find a solution, the United States of America can either choose to adopt the socialist approach or combine the capitalist with the socialist in the model of China. The ideology can be implemented in the United States since the country has adequate resources to manage the change. The socialist approach looks forward to benefiting the community and enhance equality in the distribution of wealth. In the socialist system, the government owns more production means, controls the wages and economic patterns. In the way the socialist approach has succeeded in other large economies in the world such as China, Netherlands, and Sweden, the system can be successfully implemented in the United States.