Currently candidate for the Democrat nomination for President of the United States, Bernie Sanders, is an avowed socialist, calling himself a Democratic Socialist. While Senator Sanders will probably lose the nomination to Hillary Clinton, he is currently a viable candidate. As of this writing, he will soon be giving a speech explaining just what a Democrat Socialist is, but in the meantime, the following will contrast Capitalism, our current economic system in the United States with Socialism. As you read this, keep in mind that while we call or economic system capitalism, it is not a purely capitalistic system.
The central arguments in the socialism vs. capitalism debate are about economic equality and the role of government. Socialists believe that economic inequality if bad for society and that the government is responsible for reducing it through programs that benefit the poor such as free public education, free of subsidized healthcare, social security for the elderly, and higher taxes on the rich. In contrast, capitalists believe that the government does not use economic resources as efficiently as private enterprises do, and therefore society is better off with the free market determining economic winners and losers.
As I indicated above the United States is considered a bastion of capitalism. However, large parts of Scandinavia and Western Europe are considered socialist democracies. As you know, though, the United States has a plethora of entitlement programs that allegedly benefit the poor. The U.S. also offers free public elementary and secondary education to its citizens and has implemented a Social Security program to benefit the elderly. Furthermore, its present tax system imposes higher taxes on higher income earners. As such, the United States is not a pure capitalistic society. We currently have a strong private sector and income inequality. Those individuals who work hard and take risks have chances at accumulating more wealth than those who prefer not to take large risks and work less. But for those individuals willing to work harder than normal and take the risks, additional wealth is not guaranteed. Of course, there’s those in between. In a capitalistic society such as what we have in the United States, you get to choose.
The following will outline the differences between capitalism and socialism:
Capitalism: A theory or system of social organization based around a free market and privatization in which ownership is ascribed to the individual persons. Voluntary co-ownership is also permitted
Socialism: A theory or system of social organization based on the holding of most property in common, with actual ownership ascribed to the workers.
Capitalism: Capital (or the means of production) is owned, operated, and traded in order to generate profits for private owners or shareholders. Emphasis on individual profit rather than on workers or society as a whole. No restriction on who may own capital.
Socialism: From each according to his ability, to each according to his contribution. Emphasis on profit being distributed among the society or workforce to complement individual wages/salaries.
Capitalism: Laissez-faire means to “let it be;” opposed to government intervention in economics because capitalists believe it introduces inefficiencies. A free market produces the best economic outcome for society. Government should not pick winners and losers.
Socialism: All individuals should have access to basic articles of consumption and public goods to allow for self-actualization. Large-scale industries are collective efforts and this the returns from these industries must benefit society as a whole.
Capitalism: Competition for ownership of capital drives economic activity and creates a price system that determines resource allocation; profits are reinvested in the economy. “Production for profit:” useful goods and services are a byproduct of pursuing profit.
Socialism: Economic activity and production especially are adjusted by the State to meet human needs and economic demands. “Production for use:” useful goods and services are produced specifically for their usefulness.
Capitalism: Market based economy combined with private or corporate ownership of the means of production. Goods and services are produced to make a profit, and this profit is reinvested into the economy to fuel economic growth.
Socialism: The means of production are owned by public enterprises or cooperatives, and individuals are compensated based on the principle of individual contribution. Production may variously be coordinated through either economic planning or markets.
Capitalism: Can co-exist with a variety of political systems, including dictatorship, democratic republic, anarchism, and direct democracy. Most capitalists advocate a democratic republic.
Socialism: Can co-exist with different political systems. Most socialists advocate participatory democracy, some (Social Democrats) advocate parliamentary democracy, and Marxist-Leninists advocate “Democratic Centralism.”
Capitalism: Private property in capital and other goods is the dominant form of property. Public property and state property play a secondary role, and there might also be some collective property in the economy.
Socialism: Two kinds of property: Personal property, such as houses, clothing, etc. owned by the individual. Public property includes factories, and means of production owned by the State but with worker control.
Capitalism: The means of production are privately owned and operated for a private profit. This drives incentives for producers to engage in economic activity. Firms can be owned by individuals, worker do-ops, or shareholders.
Socialism: The means of production are socially-owned with the surplus value produced accruing to either all of society (in public ownership models) or to all the employee-members of the enterprise (in Cooperative ownership models.)
Capitalism: Classes exist based on their relationship to capital: the capitalists own shares of the means of production and derive their income in that way while the working class is dependent on wages or salaries. Large degree of mobility between the classes.
Socialism: Class distinctions are diminished. Status derived more from political distinctions that class distinctions. Some mobility.
Capitalism: All individuals make decisions for themselves. People will make the best decisions because they must live with the consequences of their actions. Freedom of choice allows consumers to drive the economy.
Socialism: Religion, jobs, and marriage are up to the individual. Compulsory education. Free, equal access to healthcare and education provided through a socialized system funded by taxation. Production decisions driven more by State decision than consumer demand.
The above outline a few of the major differences between capitalism and socialism. Again, pure free market capitalism doesn’t exist on the planet. The United State, the United Kingdom, and Hong Kong are strongholds of capitalism.
With Bernie Sanders running for the Democrat nominee for president, front-runner Hillary Clinton has moved far left. Millennials are leaning toward socialism because they see our capitalistic economic system as one that benefits the wealthy. However, younger adults tend to be more idealistic, but tend to change as they mature and are able to view the world from a practical standpoint rather than an academic stand point.
It is my hope that American from the entire political spectrum will read this post and think hard and long about socialism. Is this something you really want because there is a good chance this country, built on the principals of capitalism and a free market will veer toward socialism if Hillary Clinton or Bernie Sanders are elected President in 2016.
The contents of this article was mostly provided by diffen.com and your administrator’s personal opinions.