With big proponents of socialism, such as Bernie Sanders, Elizabeth Warren and Jeremy Corbyn, rising in popularity, we can begin to question whether a ‘true socialist’ society would be mutually beneficial to everyone. The idea of financial equality and prosperity across the board with a, more or less, eliminated poverty line sounds absolutely fantastic, doesn’t it? Morally, of course it does. Nobody wants to see homeless people and people in socio-economic hardship. But is it the best system going forward? With all the hype around it, you would think so. So let’s see how it stacks up against our old friend, conventional capitalism.
What do these terms mean?
Capitalism, otherwise referred to as individualism, is the economic and political system where goods and services are privately owned for profit generation, as opposed to being owned by the state.Capitalism typically goes hand in hand with a free market which involves little to no regulation over transactions or business management. Capitalism is characterised by the ability to accumulate capital, voluntarily exchange goods, wage labor and a structured competitive market. Capitalism began as a policy known as Feudalism in the 16th century which offered land in exchange for an allotted time providing military service. It has since evolved into a system argued by some as nothing more than a ‘profit-driven race to the top’ but by others as the pivotal drive for innovation and the liberated exchange of goods and services for capital.
Socialism is the political and economic system whereby the state owns the means of production, distribution and exchange.This is done in order to ‘create a more equal distribution of goods and improve equity across a certain nation’. Socialism can be very difficult to define because of how many types of socialism there actually are. Socialism, in practice, aims to unify the people and focus on human welfare as a societal objective. Generally speaking, socialist societies or policies are enacted for everyone to focus on a common goal. Socialism has been gaining a lot of traction in the western world as it is deemed more ‘egalitarian’ than capitalist policies meaning, in simple terms, more fair. But it has also come under backlash for being morally unethical.
Is socialism the best way forward?
In short, no. There are many fundamental issues with socialism that I believe make it the inferior socio-economic policy of the two. To elaborate, we need to clean up some misconceptions of the capitalist system.
“The rich get richer and the poor get poorer” – This statement isn’t true, nor has it ever been true on a national scale. Taking into account the class system, that has been indicative of a capitalist society, the working class are much better off now than they were 20 years ago and so on and so forth. Everyone typically is better off.
“The top 1% make as much as the bottom 99%” – This is largely true. Global statistics show that the top 1% of the world have 20% of the world’s income. What isn’t necessarily true is the notion that the top 1% are all ‘tax evaders’ or that somehow this money was obtained in a corrupt or illegitimate manner. This gives governments (and people that vote for them) incentive to tax the wealthy and target the wealthy in order to fund services for people lower on the income scale. This is immoral, just because you democratically vote to take people’s money doesn’t mean it is ethical to do so.
‘Capitalism is nothing more than a dog-eat-dog world’ – This is not strictly true. You can (and I very much agree with) make the case that the greed does need checks and balances and a system of values. However, it is the economic and political system that has championed almost all of our technological and medical innovation and has made them more accessible due to slashing prices for the consumer. So in that sense it has benefited the world as a result, despite its inherently cutthroat nature.
The trouble with socialism these days is that it uses the moral argument to warrant investment by force. It requires heavy top-down government control and normally extortionately high tax rates to fund programs that only benefit the working class. Even when the funding comes into place, people can never agree where the funds are invested as communities and cultures have radically different agendas.
There is a seemingly growing desire to have the government baby them and have them run their lives. The fundamental flaw for people in a capitalist society is the greed problem as it often not backed up with a values system. Inculcating a system of values into our generation to promote helping the community and its people is vital to achieve satisfaction under capitalism. Forcing people to give money to other people will not achieve community, it will achieve resentment. It is an impractical, discriminatory policy that undermines freedom of earning and promotes the theft of others by basing it off of false morality. By switching to this system, you risk losing the reasons to innovate. The wealthy won’t do it because the financial rewards are not great enough whereas the middle and working classes wouldn’t feel the need to work as capital is literally handed to them. The incentive to work, develop, innovate and progress is gone under this system.
That’s not to say that every socialised scheme is bad. The NHS has largely been a success for the most part. The education sector has largely been a success if you ignore government cuts and individual cases of underfunding. But there is nothing that hardlined socialism solves that a free market capitalist system couldn’t. With a good values system, social safety net and adequate checks and balances, capitalism is the better system to run alongside our democratic principles to deliver prosperity and prevent austerity.