Over the recent years, the controversial debate has continued to be raised in relation to the capitalism and socialism. This debate has resulted in a growing division among scholars and policy makers around the world. Socialism and capitalism are economic systems that are in use across the globe by various societies. The basic ideology that socialism proposes is a society where groups of people become the rulers and managers.
It holds the idea that people should work together for a common purpose to enhance a common virtue. The capitalist system, on the other hand, is based on the ideology that the private ownership of resources allows for the greatest growth and benefits for the society. The motivation behind the capitalist economic system is based on attaining profit and accumulation of capital. A great debate has arisen in regards to the best system for the betterment of society. The focus of this response paper is to provide analysis of the nature of division that has arisen from the debate regarding the most effective economic system. The capitalistic society is dominated by corporations with the single purpose of accumulating as much profit as possible. This means that the needs of the society are not attended to.
When compared to a socialist system, where solidarity, self-management, and democracy are advocated, one may jump to the conclusion that a socialist system is better than a capitalist system. Socialist and capitalist systems have been implemented in numerous nations around the world. A clear cut understanding has been made in regards to the advantages and shortcomings of each system.
Noam Klein, one of the lead critics of the capitalist system, in her book, the shock doctrine explores some of the negative impacts that the capitalist system has imposed on the world. From her argument, the social cost that tends affect the third party in a capitalistic system is often externalized. The effect of this externalization is that it results in the neglect of the societal needs by focusing on profitability and power gain.
The other major shortcoming of the capitalist system is the fact that it results in the absence of solidarity in society since the prosperity of one part of society is often at the expense of another. For the capitalist, the idea that is held by socialist supporters that the government has the capacity to intervene in the market dynamics is seen as a violation of the rights of an individual. It is seen as the move by the government to dictate and plan everything centrally.
In exploring the global financial crisis of 2008, one realizes that both the economic systems were affected. For the socialist world, however, the collapse and failure of the markets were as a result of lack of regulations. Supporters of the socialist system argued that greed, under the banner of profit and capital accumulation resulted in the financial crisis. The deregulation of the market arose from the activities of the government.
The middle class is one of the groups that were affected the most in the 2008 financial crisis. Most of these populations were forced to find more revenues just to survive and meet their needs. Massive losses of jobs were also experienced as the most companies failed to pay up their employees. From a socialist point of view, the solution to the market failure was a simple initiation of control and regulation by the government.
The overlap of the two economic systems in what is called a mixed economy often occurs, with the Russian economy being an example. Pursuing such a system has often been avoided owing to the lack of a single point of unity and balance for the two systems. The recent emerging global threat of climate change has added a new spin to the socialist and capitalist debate.
Ecological deterioration has largely been associated with the capitalist drive and motivation of profit. Climate change, in recent years, has managed to become a critical issue in the economics debate. The blame has been attributed to both the socialist and capitalist systems.
Both economic systems continue to depict the imminent crisis that they face. While capitalism is seen as a creator of a rift between society, socialism is seen a system that lacks the capacity to create as a result of its centralized planning system. The discussion in the paper is instrumental in providing an overview of the basis of the debate that has been ongoing for ages in regards to the economic systems.
Every party in the debate is quick to point out the flaws that the other contains; this then becomes the point disagreement that seems never to end. Conclusively, however, one has to consider the fact that both economic systems have their advantages and disadvantages. Making a choice on the best system is relatively unattainable; however, measures should be put in place to ensure that the shortcomings in both systems are eliminated to serve the society better.
Bibliography
Dahrendorf, Ralf, and George Soros. The Paradoxes of Unintended Consequences. New York: Central European University Press, 2000.
Helleiner, Eric. The Status Quo Crisis: Global Financial Governance After the 2007-08 Financial Meltdown. 2014.
Klein, Naomi. "THE SHOCK DOCTRINE The rise of disaster capitalism." (1999).
Klein, Naomi. This changes everything: Capitalism vs. the climate. Simon and Schuster, 2015.
Warner, Jonathan. "Capitalism, Socialism and Democracy. By Joseph A. Schumpeter." The European Legacy 18, no. 2 (2013): 262-263.
