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Capitalism Vs. Socialism Essay, Research Paper

Christina HaselApril 22, 1999Economics Has Capitalism Defeated Socialism? Socialism and capitalism are not on different ends of the Economic Spectrum, but they could be, judging from the way each author defended his opinion and point of view on the subject. One article is all for capitalism, and explains why it s the best economic system. The other is totally opposite, and it justifies why capitalism is so wrong and why socialism is so right. It does, though, give some reasons how socialism has its faults. The introduction page before the two writing pieces has some good points, too. One of these points lists the jobs a government should be in control of, like supplying national defense. Some others are helping those that can’t take care of themselves. Another point is the creation some level of regulations for economic and social activities. In the following paragraphs, definitions of socialism and capitalism, and the good and bad parts of both stated in their article summaries can be found, along with what the author of this paper, in their opinion, believes is the better of the two, and the reasons for this decision. Socialism: the economic system in which the government owns some factors of production and has a role in determining what and how goods are produced. A social system in which the means of producing and distributing goods are owned collectively and political power is exercised by the whole community, is another definition of the economic system. The second article entitled “Socialism Yes” is written by David Reynolds, strongly supports socialism. He starts off explaining negative influence that capitalism has had on our society. Some of his reasons were: that it didn’t provide for the people’s needs; how competition isn’t what is used to be; that the people are suffering because of it; that people want profit for themselves not society; and the people no longer have democracy. Reynolds did say, however, that capitalism brings more variety in products, and that it is more advanced in technology. In his article, he says socialism isn’t Robin Hood’s method of “stealing from the rich and giving to the poor”. It is about efficiently overseeing the manufacture and allocation of goods in an orderly manner. It also needs to plan out things more with the market’s aid. Reynolds feels socialism empowers the poor, more liberties are granted and the decisions should be made justly, with the people being involved. In his opinion, socialism “emphasizes cooperation rather than competition,” and here, people work with everyone else, not against each other. Reynolds conversion to socialism, was influenced by his negative reaction to a college economics lesson on the need for some low level of unemployment. His statements about high unemployment do not seem relevant in our current economic cycle. He over-emphasizes the value of traditional industrial labor; undervalues the service industry; and ignores the new information career fields. Reynolds’ article was written prior to the boom of stock ownership by the average worker and ignores the growing venture capital market fueling start-up companies. Capitalism: a market economy in which the factors of production are privately owned. Another definition of capitalism is an economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market. To Malcolm S. Forbes, Jr., capitalism “encourages devotion of energy and impulse to peaceful pursuits, to the satisfaction of others wants and needs, and constructive action for the welfare of all,” and its not about greed. Some of his reasons for this are that the system works well without the help of the government, and companies compete with each other for business, like IBM and Apple in the computer field, for example. As stated in the previous paragraph, a benefit of capitalism is the development and use of the newest technology. People living in socialism wouldn’t be motivated to make innovative improvements on products, but they could be with capitalism. In capitalism, workers/ consumers can make their own decisions about where to shop, what to buy, and what kind of a job they want to pursue. It isn’t like this with socialism, because the government controls most of the decisions. Managed competition is a problem because of people’s longevity, but it can be remedied by becoming open competition, giving the people the control. This paper’s author feels that out of the two economic systems, capitalism is the more preferable. Many of the reasons can be seen throughout the previous two paragraphs. Not only do the people receive the power to make their own decisions about how the economy is run, but also personal decisions regarding private property, places of employment, salaries, and purchases. With capitalism, the people decide what the want, not the government, and with this decision comes competition. This is beneficial to the consumers, because prices are lowered to attract buyers, and products are being made of higher quality. These are all government decisions in a socialistic system. Who wants more government in their lives, anyway? Sure, it provides some level of education, health care and jobs, but there are higher taxes, more restrictions, and often a huge self-sustaining bureaucracy to battle with. Without competition, the quality of what the central government provides can be suspect.

As stated, the definitions of and the for and against reasons why socialism or capitalism is the best were all stated, in addition to which is thought to be the best in this author’s opinion. Both articles, “Socialism Yes” and “Three Cheers for Capitalism” were summarized in this process. Prior to the articles was a short introduction. One topic it discusses is the number of socialist/communist countries there have been in the past few decades, and how many of them have failed. Several have done so in the last couple of years, and some of them are experimenting with capitalism. This helps to prove that capitalism is a better economic system. East Germany, Hungary, Poland, and Czechoslovakia are just some of the countries that fell under communist rule following World War II. These countries had government control over most of their society, and now evolving towards capitalism. The United States, and more recently Japan, and many countries in Western Europe have capitalist economies, with much less governmental control.

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