The modern world is facing a myriad of cchallenges, including environmental issues, severe economic constraints, as well as global health-related threats. All these concerns fuel the discussion of the relevance and effectiveness of the economic agendas countries choose. The debate that involves comparing capitalism and socialism seems relevant these days. On the one hand, such politicians as Bernie Sanders, who is famous for his socialist preferences, try to attract voters by focusing on the ideas of social justice, fairness, and government-led distribution of resources (Raeder 98). Such people note that socialism is the only beneficial model for countries as it can ensure equality and fairness. On the other hand, President Trump, who is a devout supporter of capitalism, tries to ensure the development of business in the USA and is giving money to people suffering from the coronavirus-related restrictions (Dzhanova and Pramuk). The comparison of the two economic systems is rather complex and involves many aspects, but various facts and numbers are showing the superiority of capitalism over socialism.
The Basic Principles of the Two Systems
Capitalism and socialism are two systems that differ considerably in terms of fundamental principles. Capitalism rewards performance and innovation, encourages risk-taking, and safeguards individual liberties (Pejovich, p. 120). Socialism is associated with “top-down income policies,… social insurance coverage,” and control of prices and educational (as well as many other) choices of individuals (Pejovich, p. 120). Importantly, capitalism promotes individualism and freedom of expression, while socialism concentrates on collectivism and the good for all. As to the vices of the two economic models, Winston Churchill in his specific manner stated that capitalism “was the unequal sharing of blessings” while socialism “was the equal sharing of miseries” (De Haan, p. 109). The existing examples of social or former social countries can illustrate the perspective of the renowned British prime minister.
Stories from Some Socialist Countries
It is necessary to start with a quick note that capitalism has certain areas to be addressed, and the lack of equality is one of these. However, capitalism is a viable economic model that enables countries to prosper and introduce various innovations that help human society to evolve. Although the American society may seem unfair to some groups of people, the United States is a mighty country with a strong economy where people enjoy freedoms that make it possible to create, seize opportunities, and succeed.
The stories of socialist countries are characterized by fewer blessings for their citizens and more serious issues, which led these systems to rather a quick destruction. Moreover, the failure of communist and socialist states to address the needs of their people or even survive suggests that socialism is hardly achievable (Ghosh and Ghosh, p. 148). The Soviet Union still serves as an iconic example of the complete fiasco of the socialist system. The governgovernment-controlledistribution of resources through the provision of free dwelling, education, and health care (Ghosh and Ghosh, p. 148). At the same time, the provided commodities and servicservicesof low quality, and the government kept the standards of living substantially lower as compared to capitalist countries of that period. The government controlled prices, production, and many spheres of people’s lives. Limited or zero individual liberties were available to Soviet people as they could hardly leave the country or openly express their views on multiple topics (Raeder, p. 72). The system managed to survive for several decades, and the country that was based on the planned economy ceased to exist to pave the way for new states to develop adopting the capitalist approach.
Some may say that the stories of the past do not go in line with the current situation. However, the modern world has a vivid illustration of the superiority of capitalism to socialism. It can be regarded as a social experiment as the countries to be considered have been affected by almost identical internal and external forces. The development of two Koreas unveils the vices of socialism or rather its inapplicability in the real world. North Korean propaganda tries to create a picture of a prosperous and fair society where people are committed to contributing to the good for all (Legates, p. 17). Nevertheless, numbers and figures do not lie and reveal the difference between the performance of the two countries that have similar or even identical features.
For instance, the GDP of South Korea is 18 times higher than that of North Korea (Legates 17). In North Korea, life expectancy is approximately ten years less than in its southern counterpart, while infant mortality is over six times higher (Legates, p. 17). The lack of electricity, low standards of living, malnutrition, and low-quality health care are characteristic features of North Korea. All these issues are the result of the planned economy and the focus on socialism as the guiding economic system.
Why Is Capitalism Superior to Socialism?
Although the exact facts are provided, and it is proved that people in socialist countries are poor and unfree, some may still focus on the principles. Some supporters of socialism may argue that people simply fail to establish strong social societies due to their corruption, lack of knowledge or ot,her reasons. The basic cause of these states’ failure is non-viability of socialism. Socialists try to promulgate the ideas of fairness and equal distribution of resources. However, this kind of fairness cannot be achieved unless people are deprived of individual liberties. Innovation and creativity cannot be planned and controlled top-down, but they can be encouraged by the provision of opportunities and potential gains. Capitalism is the system that ensures this type of support of evolution. Clearly, some controls can be imposed to prevent considerable violations. Moreover, it is possible to note that although inequality is apparent in the USA, the government still provides support to those in need (Dzhanova and Pramuk). Therefore, some redistribution of wealth is possible in capitalist societies as well.
Conclusion
On balance, it is possible to state that socialism cannot be established in the real world, at least, not in human society. This system is linked to governmental control that discourages people from innovating and going the extra mile. No individual liberties and the focus on collectivist gains lead to poverty and low standards of living. Capitalism, on the contrary, encourages innovation and development as people pursue their personal, which eventually results in the creation of important products, services, and norms. Capitalist countries are prosperous due to their limited involvement in people’s lives. Markets and individuals decide what is truly better for them, and no government has been able to plan and control everything or rather anything. It is critical to remember the lessons of the past and avoid making similar mistakes that came at a high cost for millions of people.
References
- De Haan, Peter. From Keynes to Piketty: The Century that Shook up Economics. Springer, 2016.
- Dzhanova, Yelena, and Jacob Pramuk. “President Trump Signs Coronavirus Relief Plan to Expand Paid Leave.” CNBC, 2020.
- Ghosh, Chandana, and Ambar Nath Ghosh. An Introduction to Economics: Economic Theory and Society. Springer Nature, 2019.
- Legates, David R. “The Experiment: Capitalism versus Socialism.” Journal of American Physicians and Surgeons, vol. 22, no. 1, 2017, pp. 16-21.
- Pejovich, Svetozar (Steve). “From Socialism in the 1900s to Socialism in the 2000s: The Rise of Liberal Socialism.” Post-Communist Economies, vol 30, no. 1, 2017, pp. 117-129.
- Raeder, Linda C. Freedom, and Economic Order: Capitalism and Socialism in Theory and Practice. Rowman & Littlefield, 2018.