Advantages and Disadvantages of Living in a Capitalist vs a Socialist Society - Essay Example

 Advantages and Disadvantages of Living in a Capitalist vs. a Socialist Society When comparing capitalism and socialism, it’s sometimes difficult to separate the theories of these systems from the realities of the way we actually run our cultures. There are no purely socialist or purely capitalist societies operating today. Almost all nations take elements of each system and incorporate them into their regulations and social structures. Capitalism. The pure theory of capitalism looks at economics from an individual rather than societal standpoint. Since the consumer ultimately determines the value of products and work, capitalism promotes free trade of goods and labor. In pure theory, each individual in a capitalist system has the same opportunity to succeed or fail as every other individual. Capitalism rewards ingenuity, ability and achievement on the part of individuals regardless of their circumstances at birth or current station in life. Each member of a capitalist society is rewarded for being frugal, responsible, and disciplined, and qualities of honesty, thoughtfulness, and prudence are supposed to be paramount. These qualities are rewarded across all fields of labor, from executives to janitors. Entrepreneurship is vital to a capitalist system. Entrepreneurs see potential everywhere, and are always looking to exploit creativity and initiative for the greatest gain, either financially or for the good of mankind. In theory, there’s an unlimited potential for any individual to grow his or her wealth, and although wealth is distributed unequally, everyone under a capitalist system benefits by association with the wealthy individual. Under capitalism, individuals are free to choose how they act, and if they act immorally, they’re punished by the system. Socialism. Under socialist theory, resources, transportation, and industries are owned by the state, and wealth can be distributed equally among all laborers. Competition between workers or business owners is reduced or eliminated, bringing all people together philosophically and economically. The workers aren’t separated from the products of their work; instead, they retain control over how and why it will be distributed. When the state controls such things as schools and healthcare, those necessities are available to all equally, and private school education and cosmetic or expensive health treatments become luxuries that individuals must pay for instead of the state. Socialism ends hunger and homelessness because wealth is equally distributed to all citizens. Equality and freedom are hoped to be extended to all regardless of race, creed, or sex, because there’s no need to overcome other individuals. Socialists want an equal society, with wealth and resources distributed among the population more evenly. Mixed economies. In reality, most of us live in mixed economies, a blend of state-controlled institutions and resources and the free market system. Socialist-leaning mixed economies socialize major and economically vital industries such as mail, railways, power, utilities, healthcare, and schools. Then they let the free market determine the value of goods and labor. Once each worker is ensured that he or she (and everyone else in the socialist mixed economy) can count on basic necessities, after-tax income can be spent at will on luxuries or reinvested into the economy. In capitalist-leaning mixed economies, the state provides basic infrastructure such as roads and railways, but lets entrepreneurs and individuals control how those resources are used to a greater or lesser extent. Some social programs such as public schools or national forests are almost entirely controlled by the state. The state regulates businesses and individuals to keep a certain boundary on any individual’s actions. In capitalist economies, the workers “sell” their labor. Technology develops as a profit center. The consumer becomes part of the economy, not just laborers as a means of production. Capitalism distributes wealth to whoever can grab it, but anyone can grab it. As levels of wealth rise, economic output rises, creating a cycle. Sometimes, monopolies, business cycles, unemployment, unequally distributed wealth, and economic exploitation of workers happens in capitalist societies. There is often exploitation of low-wage workers, but this exploitation can happen in socialist-leaning cultures, too, when there are profits to be made. Detractors from capitalism point out that there is inefficient distribution of wealth, unemployment and economic instability. In capitalist-leaning economies, the means of production is owned by private people, and operated for profit, with investments, distribution, income, production, and pricing of goods determined through the free market (supply and demand) rather than fixed by government regulation. The state only enforces basic rules like not allowing complete monopolies and keeping worker safety and minimum wages in mind to some degree. Conclusion. In the United States, the current crisis over the health care system has many lawmakers talking about instituting a national health care system. This is like many European nations, Australia and Canada, and many others. Socialized health care has proven to be very difficult to implement in the capitalist economy and thinking of the United States, however, although there are many arguments in favor of implementing such a system. Another problem facing the capitalist culture of the United States is its large pool of low-wage workers. In his book The Working Poor, David Shipler mentions that many of these people are immigrants (both documented and undocumented). Their low-wage work supports farming, restaurants, builders, the garment industry, and so on throughout the United States, providing more prosperous people with goods and services. Many immigrants come to the United States on the promise that even they could make their fortunes, and find so many obstacles in their way that they can barely make a living. Capitalism does not have a provision for more equal distribution of wealth, and so these low-wage workers continue to swim at the bottom of the economic pool. In the early days of labor unions, workers united among themselves to fight unfair labor practices on the part of employers. Nowadays, while most workers do not work under labor unions, government employees, health workers, teachers, and many others do work under union rules. Labor unions provide some of the best aspects of socialism for workers: predictable wages, regulated hours, and guaranteed provided insurances. Unions operate inside of the capitalist system, allowing employers, business people, and individual employees the choice and chance to make profits. Since most of us live in mixed economies, we try to take the best aspects of both capitalism and socialism and incorporate them into our cultures. There’s no doubt that the idea of making a fortune appeals to most people, and capitalism offers that promise to any and all. However, in reality, few people actually make those fortunes, and many more are left with not enough money to prosper and thrive, so the equal distribution of wealth aspect of socialism is also appealing. Nations can only try to come up with the best system for supporting their people using varying aspects of both socialism and capitalism. Work Cited Shipler, David K. “Importing the Third World.” The Working Poor: Invisible in America. New York: Random House, 2005. 77-95. Read More