Op-Ed by CarolAnn Bailey-Lloyd
While conducting research on capitalism and socialism, I was quite surprised to learn a few things about these two, very contrasting economic structures. Let’s begin with capitalism. As most of you are probably aware, capitalism is a particular method of economics. The intention of capitalism is to produce wealth through privately controlled, operated and owned capital, land, and labor. But, were you aware that modern capitalism was greatly influenced by Max Weber (a German social theorist during early 20th century)? Weber’s opinion of the development of capitalism was somewhat rooted in theocracy, because he felt that religious devotion was, in part, the driving factor behind the pursuit of wealth. Despite his fundamental opinions, Weber cited, “The spirit of capitalism could be divorced from religion,” (in his book, “The Protestant Ethic and the Spirit of Capitalism.”) The severing of religion from capitalism, according to Weber, would be the end result of greed for profit, among other factors. Weber also believed that in order for capitalism to work, that it had to be a way of life that was common to all men. Presumably, Weber held firm beliefs that tied religious endeavors to creating wealth; but he also believed that in the creation of entrepreneurial wealth, that moral value had to accompany it. Subsequently, Weber’s underlying thesis for wealth creation was not that far off from economist, Piero Sraffa, who understood that the seeking of capital for the highest profit rate would cause drastic change rates or instability in socioeconomic conditions. Let’s move onto socialism.
Also not set in stone, is the economic system of socialism. Like capitalism, socialism is based on a number of theories (including Marxism), but believes in the government administration and ownership of productive means and distribution. The notable difference, however, is that socialism seeks to offer economic equality and opportunity for all citizens. In a socialistic society, power and wealth are more evenly distributed; but is equally founded on the amount of productivity. Weber was a critic of socialism because he felt that by handing over complete economic control to the state, that bondage would be the end result. Winston Churchill was vehemently against the institution of socialism because he believed that totalitarianism would ensue. Today, there are various levels of socialism that exist within the world. Regions that practice extreme socialism include communist countries like China and Cuba. However, the Swedish Social Democratic Party has been a strong proponent of free trade, low-unemployment, progressive taxation (tax reduction to those with lower abilities to pay; tax increases to those with higher incomes), equality, social welfare, and anti-racism/discrimination policies.
Given the current global-socioeconomic circumstances; it seems fair to assume that neither complete capitalism, nor complete socialism work proficiently. However, it is apparent that when one system fails miserably at the hands of a few, then capitalism is not the answer. The same holds true for very restrictive extremes of socialism. While I’ve heard arguments from both socioeconomic “analysts,” it would seem to me that the safest bet would be to integrate the two forms of economic systems to create a happy medium. President Roosevelt stated, “In the consistent development of our previous efforts toward the saving and safeguarding of our national life, I have continued to recognize three related steps. The first was relief, because the primary concern of any Government dominated by the humane ideals of democracy is the simple principle that in a land of vast resources no one should be permitted to starve. Relief was and continues to be our first consideration. It calls for large expenditures and will continue in modified form to do so for a long time to come. We may as well recognize that fact. It comes from the paralysis that arose as the after-effect of that unfortunate decade characterized by a mad chase for unearned riches and an unwillingness of leaders in almost every walk of life to look beyond their own schemes and speculations.” Roosevelt knew and understood the importance and value of taking care of his citizens by instituting social security and other governmental “socialistic” venues to keep this country afloat during difficult economic times.
Arguing amongst each other about who is a socialist and who is a capitalist gets us nowhere fast; and is one of the most perverse ways to further destabilize a volatile economic situation. Combining these two economic forms to create a balanced, healthy society is what matters the most. We cannot afford another major Wall Street crash, nor bail out. Now is the time for all great minds to work together to engineer a stable, productive and positive environment for economic growth facilitating working models of capitalism and socialism.
Socialism vs. Capitalism: Initiating the Evolution of Balance
Op-Ed by CarolAnn Bailey-Lloyd