Pros and cons of capitalism vs socialism
By Sulakshana Viswanathan on 2017-02-04
The article is a basic overview of the pros and cons of capitalism vs socialism keeping the real practical world in view. It is not as dense and intense like textbooks studied in schools. Its a basic overview for understanding the concepts.
Disclaimer: The article is hypothetical based on history studies and inferences from practical experiences.
History books have boringly explained the concept of Capitalism and Socialism for students throughout the years. My article would help you understand these concepts in a much easier way. To understand capitalism and socialism, let us first remove the letters "SM". We are left with two terms "Capital" and "Social".
In simple terms, Capital means head, leader, and master of a group or a race. The rich gets richer, the middlemen stays mediocre, and the poor becomes poorer serving others. The one magic word of Capitalism is “Produce”.
Social on the other hand, means more of gathering with no mastership. It is a free enterprise – a system designed by all for all welfare and benefits. Also called as Leftism where all men are equal in the eyes of the system. Hence in a capitalistic economy, there is always a master. He tells his rulers what they need to do and how they must function according to his rules. This act of governing is called "Capitalism".
On the other hand in a social economy, the leader is elected by the group and any decision imposed is taken into consideration after consultation from the group. There is no mastery here and the leader is one among the group of people he rules. Hence this is called "Socialism". Socialism gets coupled with communism where all rights are equal and wages equally shared by all. There are labor unions who are created to fight for equal rights which is called communism as an offshoot of socialism.
Through the years as history gains momentum, the capitalistic economy evolved more into privatization of industrial sectors whose main aim is yearn profits.
Socialistic economy evolved more into public government led institutions whose main aim is to serve the people and also yearn profits.
What are the pros and cons of Capitalism and Socialism:
Capitalism is good only when it comes to rules and regulations. There is one master and he controls all the economic policies which include the prices, wages, demand and supply of goods, and production in his country. When there is a master to control the economics, there is control and discipline with everyone abiding to one common leader. However in realistic mode, this is not happening because the Capitalistic Master is only human and therein leads to "evils" of the capitalistic economy. The system slowly evolved into a master-slavery mode, with distinction and discrimination done based on different class systems. The master starts to differentiate his people based on class, creed, race, color, income and factors that favor him.
Capitalism is private classy ownership. Lets say you own a village, and its your private property then if you are a good master you may keep your property well and pay good wages to the employees. On the contrary, if the private owner may get driven by the evils of this system with greed and malpractices, being the sole owner which can lead to lot of slavery and thereby creates unhealthy communal clashes in the economy.
Socialism on the other hand is good as it is not bossy but a collaborative classless system. It is like teamwork and every single person opinions are taken into account here. It is called the dance of democracy. Most of the government enterprises follow this system as any decision they make influences the public as a whole. However this system may lead to failure because of the lethargic and primitive methods adapted to run the system. Most of the officials in this system are selected based on people choices rather than the educational qualifications. The administration sometimes fails as the people who run the system are not qualified with education and experience to execute industrial policies. They may happen to be the people favourites because of the way they present themselves, but many times they may not have the adequate knowledge to execute good systems. Another disadvantage of the system is that the power held by the authorities here are very high and sometimes people misuse this power in this system.
In privatization or capitalism, there is a "hire and fire" methodology. You both abide by the rules and work for the master or you are fired from your status. The common dialogue people use here would be “Either you listen to me or the door is open for you to leave"
In socialism, there is a "Signature" methodology. If you want to own a piece of land, get approvals and you need the authority signature, this power may mislead to corruptive practices like Bribery, Donations etc. The common dialogue here would be "If you want my signature on your papers, then apart from the salary I get which is very low for my needs, I need to pay you to pay me a bribe or donation so that I can accumulate wealth during the course of time"
Hence what system would you prefer? The preference would be for a Mixed Economy – a blend of socialistic principles and capitalistic rules.
Privatization evils need to be controlled by Socialistic principles, while socialistic ignorance has to be wiped out by capitalistic knowledge of systems. Many economies actually follows the mixed economy patterns, still there is lot of loopholes and improper execution of the systems.
Good economists on a leadership table will filter the impurities of the Mixed economy and make it a better system.
Note: If you like to explore more on the subject a good study of Karl Marx systems would give you a better perspective of system.