Capitalism V Socialism- An Economic Dilemma

Capitalism vs Socialism

Greed is destroying America. Big business owners build grand companies and bathe in their profits, disregarding the homeless and suffering masses outside of those pristine doors. American people are flailing in debt, struggling to put food on the table. If only there was a way that these awful businessmen could be stopped… there is. The answer is socialism, where the government pulls from the abundant riches of the upper class to support the poor and needy. After all, Americans are all equal, right? Wrong. Socialism always sounds good on paper, but apply it to a nation and economic destruction will quickly follow. So, what is the answer to this pressing question? The answer is capitalism. Although many people believe socialism allows everybody equal wealth and resources, capitalism is vastly superior on the grounds that it spurs innovation and promotes progress and socialism has been tried and proven flawed and even catastrophic.

The story of modern capitalism begins in 19th century England, where heavy economic regulations were simply disobeyed due to civil war, creating what developed into a free market. This shift to capitalism was also spurred by better farming technology, which yielded cheaper crops, which left the English people with money to spend on other products and services; thus creating consumers (Green, 2012). A consumer is someone who may exchange money for a good or service, and their introduction changed the game of business. Before the free market, someone bought food because he or she was hungry; now these people purchase food as if it were sport. The change in cultural dynamic gave the boost for competition, a trademark of capitalism, which is where innovation is found. In a free market system, a good product lasts and a bad one does not. If a producer is not selling well, he has to make his product better or cheaper, or he will run out of business. The Industrial Revolution changed the world, and worked hand in hand with developing capitalist nations like England. Socialists may argue that free trade fosters greed and corporate corruption, but these businesses suffer if they do not adhere to what the people want. These men and women are not lawless bank robbers who steal money from the people, they are workers who present a good or service to the public and the rest is in the hands of the consumers.In a socialist society, it is not decided by the people, or the consumers, if a business should survive-- that is decided by the governing body.

Another opposition of capitalism is the dark business practices that have occurred, especially at the dawn of business. Poor pay, awful working conditions and child labor, to name a few, often leave a blemish on the history of capitalism. These atrocities were then resolved by placing business regulations, forming workers unions, and trying to solve the damage that was done, and it was successful. Obviously, under any circumstances, anarchy is not ideal. Minor regulations, made and enforced by a government, will always have a place, but they should be simple rules that protect the workers from abuse, danger, and unfair compensation. After clearing out the bumps in the road, capitalism was able to drive England, America and many other nations to the future.

The story of modern socialism is much bleeker, beginning with The Communist Manifesto which was written by Karl Marx and Friedrich Engels in 1848 (although some aspects of socialism were found earlier, following the French Revolution). The manifesto essentially denounces capitalism, outlines communism, and predicts that eventually all nations will adopt a socialist economic structure (Marx 2002). While socialism and communism are not identical, they share the same goal of equal distribution of wealth, controlled by the government. Communism is simply a more radical form of socialism. While communism continued on to destroy Soviet Russia, Venezuela is an excellent example of the destruction that socialism brings. In the year 1998, Venezuela chose to elect Hugo Chavez, a charismatic man who promised to stop businesses and capitalists from stealing the wealth of their nation. At the time, it was the richest nation in South America. Over time, the Venezuelan government took control of industries one by one, and it appeared to be working. Chavez was praised for his success, until it ran out. Venezuelans today struggle to find food, toiletries, and other basic necessities that they were promised by Chavez’s socialist regime (D’Souza 2017).

Ironically, the socialists have gained exactly what they wanted: equality. Every Venezuelan is now equally poor-- of course, with the exception of the government elites. The same story of Venezuela has played out in North Korea, Cuba, Vietnam, and is only beginning in countries like Brazil and Bolivia. Starving citizens, depleted resources, and dying economies are all attributes of socialist nations. It is not a coincidence that many of these nations also end up turning over much more power to their government than they intended to. Like Hugo Chavez in Venezuela, communist and socialist leaders alike would slowly remove every liberty that the people held; it happened with Joseph Stalin in Soviet Russia, with Mao Zedong in China, and Fidel Castro in Cuba. Another great example of this power takeover would be the famed National Socialist Party-- Nazis. In response to this argument, supporters of socialism often point to Denmark and Norway as examples of socialist success, but the truth is that these countries thrive due to their capitalist aspects. While speaking to students at Harvard’s Kennedy School of Government, Danish Prime Minister Lars Rasmussen said, “I know that some people in the US associate the Nordic model with some sort of socialism. Therefore I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy” (“Denmark Is Not Socialist”). This misconception typically is based on Denmark's heavy taxes and heavy benefits program, which is a small piece of socialism, but only works because Denmark is a fairly wealthy state. How did they get wealthy? Over 20 years of strong capitalism raised Denmark to her elevated status today, and capitalism is what keeps it there. Socialism would not work in America, because it cannot work anywhere. It is a flawed ideology.

In conclusion, capitalism builds nations up and socialism tears them down. Capitalism has been proven to cause progress and innovation, where socialism has been proven to cause scarcity and starvation. A free trade system ultimately works for the people, unobstructed by government agendas and international affairs, and when the government runs the economy, they can easily take control of everything else. The capitalist system is a statement of our freedom as Americans and consumers.

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