Derek

Capitalism Vs. Socialism

Two very opposing systems of running the economy. America's economy is one of the things that have made us a world power and capitalism has been an important tool in that. But with the current financial crisis one could make the arguement that socialism is a better alternative. What are your thoughts?

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GangsterPermalink Reply by Gangster on April 22, 2009 at 12:55pm
I think a hybrid of the two is the way to go. Capitalism gives us purpose, drive, and encourages ingenuity- but is completely scewed in favor of those with the resources. Socialism puts the interest of society as a whole as the top priority, but nobody wants to work harder than the next guy when there aren't any incentives to do so. And of course both have abuses of authority due to greed and a lack of morals and compassion.
Daniel M. MaywhortPermalink Reply by Daniel M. Maywhort on July 14, 2009 at 3:56pm
I wonder, how does one define the "interests of society as a whole?"
lowkeyPermalink Reply by lowkey on July 14, 2009 at 5:24pm
This is the problem with all socialist and communist ideologies. Invariably a committee is formed to make sure that all resources are "equitably" distributed, unfortunately this committee just becomes the focal point for abusing the system.
D-BanePermalink Reply by D-Bane on April 22, 2009 at 8:41pm
I agree, there are holes and openings for corruptions within each system, but in the end unison is the only thing that will achieve our goals as a nation.
StaceryyyPermalink Reply by Staceryyy on April 23, 2009 at 1:13am
I have a few thoughts rather then an articulated opinion. I agree with Gangster on the position that there should be a hybrid of the two, but as far as one being better than the other, I'll side with socialism all the way. Here are a few things about the topic in general:

-- America as a world power is not entirely positive when you look at what we've done with our power -- a lot of good, for sure, but also a lot of bad. The problem with power is that it can be easily abused, especially when there are only a few countries that have a lot of it. The powerful often become focused on self-interest rather than fairness. Consider our foreign policy, for example. The U.S. has so many resources at its disposal (militarily, financially, etc.) that the government has acted as if it is entitled to exert that strength on anyone, usually at the expense of less powerful countries.

In order to keep that power, our country has entered into alliances with other governments that help further our own agenda, which often means overlooking those that have committed or are currently committing atrocious crimes against humanity (Sudan or Israel for example). When a foreign government is not following this pro-American agenda, it is labeled as an enemy because of its [insert threat to the free-world here]. Not to mention that this whole status leads to the exploitation of less powerful countries, such as the unbelievable damage done by the Western world to the continent of Africa.



-- One thing I really don't understand is the assertion that socialism leads to laziness. Maybe this is true for a very small part of the population, but people don't just work for financial gain. How many of you are getting paid big bucks to put in endless hours working with Fight With Tools?? But you still do it. People often choose career paths for the personal and collective satisfaction. Police officers, school teachers, firemen, community organizers, musicians, artists, journalists and countless others are paid next to nothing compared to the work they put in. But people still pursue those paths with ardor. There are so many compassionate, driven and hard-working people who sacrifice themselves everyday and work tirelessly to make the world better for everyone.



-- We live in a country that preaches capitalism as the end all and be all of strength and productivity, when really, a commitment to a collective well-being isn't void of incentives for personal success. One thing socialism is can do much more effectively than capitalism is create a sense of solidarity. It can break down the walls between "us" and "them," and allow for an environment where trivial divisions like race, sexuality, age and social class are just that -- trivial.



-- We've been conditioned to think of capitalism and socialism in very simplified good-vs-bad terms. We've been blindsided by a political socialization that sets us against each other, that emphasizes success by means of individual ascendancy rather than collective prosperity. The fog is so thick that many Americans think these terrifying "socialist" policies like providing higher education and health care to everyone is three feet shy of Nazi Germany. Keeping us distracted with these blurred lines between socialism and tyranny keeps us from talking about the heart of the issues.



-- I think the bottom line is that neither system is perfect, and neither system is the ultimate answer to the woes of the world. The notion that in a socialist society, everyone works to their full potential and everything is fair and balanced is no more absurd than the notion that in a capitalist society, everyone has an equal chance to prosper and the economy will work smoothly under some "invisible hand."

This is why I stand on the side of combining the two. If the health care system in the U.S. kept all of our workers healthy, if public schools in lower-income areas provided the same education as those in wealthy areas, if everyone who wanted to pursue higher education was able to, if big-business was regulated to ensure that no one company or conglomerate could monopolize a market (and those regulations were actually enforced), if the legal system were not constructed to favor the privileged members of society, and if the government was an outside entity that protected its citizens, not its business partners, then maybe we could say that capitalism promotes hard work, allows everyone to participate and creates a "land of opportunity." But for this mantra to be true, everyone must be given the same chances, allowed the same freedoms and held to the same standards of accountability.

Otherwise, what we're stuck with is a broken system that shares a bed with the power-hungry elites and turns a blind eye to the vast majority of us.


* Stacey *

_____________________________________________________________

~ There's a lot of work to be done here... Anyone down for a revolution? ~
lowkeyPermalink Reply by lowkey on April 23, 2009 at 10:15am
First thought as I've said before and I'll no doubt have to say again I don't believe the US has been a capitalist nation for a long time so blaming any of the current problems on capitalism just doesn't seem right.

The incestuous relationship between corporations and the government has far more in common with fascism (Italian style, not Nazi) than it does with capitalism. This is especially true since we started bailing out companies that would have been allowed to fail under any true capitalist system.

Second thought, the current financial crisis wasn't caused so much by a free market out of control as by people playing in a heavily regulated market by the rules the government set down. Both the dot-comm boom and the housing boom can trace their roots back to the artificially low interest rates that the government set and controlled. Combine that with the lack of real market alternatives because each company had to compete on a stock-market whose government imposed regulations promote a grow-or-die mentality and we have the perfect storm to allow greed to outpace logic.

Third, taking money from one person to pay for the care of another just doesn't seem right. At a philosophical level the person earning the money is effectively the slave of the one receiving it (for the time it takes to earn it) and we decided a long time ago that slavery is wrong.

So I guess I'm against the farce of "capitalism" that we see in this country and against socialism.....maybe it's time to consider another option?
GangsterPermalink Reply by Gangster on April 23, 2009 at 2:55pm
It is time for an alternate economic system. I think the most impact would be in better controlling salaries. There doesn't need to be a take-it or leave-it salary negotiation for less desirable jobs. Someone has to clean bathrooms, so why shouldn't that person be able to make a decent living off of doing it. I've known ppl to draw unemployment because it was more than they could make by working.

Of course, skilled training should be strongly suggested instead of just offered, and even skills could be taught for what is now considered unskilled or general labor jobs to provide for more efficient processes. My father has a masters in education and still struggles, while car salesmen (who only need a GED) seem to be doing well. I have a BS/BA in accounting and I don't think I should be making $5-$15K more a year than teachers. Doctors shouldn't be making millions while EMTs make $25K a year.

Our salaries dictate our disposable and descretionary income more than our lifestyle choices do. Granted we would have to find a way to offset inflation, but if americans had more to spend then it stands to reason that they would and so would stimulate the economy more than Warren Buffet investing in GE's R&D fund.
lowkeyPermalink Reply by lowkey on April 23, 2009 at 3:35pm
OK, I think everyone who's read my comments knows I'm a free market kind of guy so my responses shouldn't be that surprising.

It is time for an alternate economic system. I think the most impact would be in better controlling salaries. There doesn't need to be a take-it or leave-it salary negotiation for less desirable jobs. Someone has to clean bathrooms, so why shouldn't that person be able to make a decent living off of doing it. I've known ppl to draw unemployment because it was more than they could make by working.

Labor is a commodity like anything else. When supply is high (lots of people looking for work), the price should be low. When supply is low (few people looking) the price should be high. The market will determine the correct value for each job based on the supply of people willing to do the job.

Artificially forces wages high causes two main problems. First, employers only have so much money to pay people. High wages mean fewer employees. We saw this during the Great Depression when FDR pushed through higher minimum salaries. Second, all costs have to be passed on to the consumer. High wages mean higher costs that need to be passed on. Therefore, high wages hurt the consumer the most and they proportionally hurt the poor far more than the rich.

What we need to look at is the "purchasing power" of the salaries. For example, I can live very well on $40K a year in Colorado. Not so well in New York or LA.

Of course, skilled training should be strongly suggested instead of just offered, and even skills could be taught for what is now considered unskilled or general labor jobs to provide for more efficient processes. My father has a masters in education and still struggles, while car salesmen (who only need a GED) seem to be doing well. I have a BS/BA in accounting and I don't think I should be making $5-$15K more a year than teachers.

Once again this is a question of supply and demand. While teachers require a college degree, there are a lot of people who want to be teachers for a limited number of positions. Therefore since supply is greater than demand, the wage will be lower.

Second, teaching is generally a government funded job and so the taxpayers reasonably want to reduce their tax burden so that will cause politicians to reduce the salaries.

Third, if you increase a teachers salary by 30% (to compensate for the fact that it's primarily a 9 month a year job) to accurately compare it with other professsions, then the salary discrepancy is significantly reduced. For example, in Colorado the average salary for a teacher with 10 years experience is $54K (source). So for 12 months, this would be a $70K salary. Not too bad given the market supply and demand.

Doctors shouldn't be making millions while EMTs make $25K a year.

The only doctors making millions a year are specialists and tend to be working in elective treatments (like cosmetic surgery). The average salary for a family doctor is $131K/yr (source). Given that a doctor will spend at least 8 years in school and you can get an EMT certification in 1 year, it seems reasonable that a doctor makes 5x more than an EMT.

Second, the legal liability is much higher for doctors than it is for EMTs so they need to be paid more just to be able to pay their malpractice insurance.

Our salaries dictate our disposable and descretionary income more than our lifestyle choices do. Granted we would have to find a way to offset inflation, but if americans had more to spend then it stands to reason that they would and so would stimulate the economy more than Warren Buffet investing in GE's R&D fund.

Inflation cannot be offset when you have a fiat currency. The government will always end up over issuing the currency and that will cause the inflation. The only way to prevent it is to use a commodity currency.

Having more dollars in your wallet doesn't mean anything if the money's value is so low that you can't buy anything with it. The hyperinflation in Zimbabwe made everyone a millionaire, but it doesn't do anyone any good because the money is worth so little that it takes millions just to buy a loaf of bread.

Investing can help create jobs. So that investing is good and will stimulate the economy far more than a few people spending a few dollars.
GangsterPermalink Reply by Gangster on April 23, 2009 at 5:21pm
That's basically saying "this is how it is, because this is how it's always been". I'm not suggesting that everyone make the same thing, or that everyone should make millions. Lets bring the top down, and the bottom up. Offset the salary hikes with the decreases in salary. Take a portion of GMs CEO's 22 million and apply it to the janitorial staff, the grounds keepers, the receptionsist, etc.

Labor and knowledge shouldn't be treated as commodities- an interest in the wellbeing of the worker providing them should be taken.

I can't view this matter with a dog eat dog, only the strong survive, live and let die mentality. Corporations make great sociopaths, but I've never been able to approach others with a complete lack of compassion.
lowkeyPermalink Reply by lowkey on April 23, 2009 at 6:39pm
That's basically saying "this is how it is, because this is how it's always been". I'm not suggesting that everyone make the same thing, or that everyone should make millions. Lets bring the top down, and the bottom up. Offset the salary hikes with the decreases in salary. Take a portion of GMs CEO's 22 million and apply it to the janitorial staff, the grounds keepers, the receptionsist, etc.

I'm saying laws that mandate such changes are bad. If you want to change them by being a stockholder then it would be OK.

Labor and knowledge shouldn't be treated as commodities- an interest in the wellbeing of the worker providing them should be taken.

Labor and knowledge are commodities and always will be. Treating them as anything else is just kidding yourself.

The worker should be taken care of as Henry Ford showed us. A worker who can afford the companies product tends to buy it and be overall happier.

I can't view this matter with a dog eat dog, only the strong survive, live and let die mentality. Corporations make great sociopaths, but I've never been able to approach others with a complete lack of compassion.

I don't view it as dog eat dog or as only the strong survive. I see it as the fairest system possible given the realities of the world.

On the other hand, history has shown us many socialist and communist societies that could not afford all the benefits they promised to the people resulting in the eventual collapse of the governments. Additionally any government that can be very generous has to be given very strong powers to enforce it's rules. Those powers are always abused.

Also remember that Democide (the murder of a person or people by their government) was one of the more common causes of death in the last century. So giving strong powers to your government is not always a good idea.

I tend to view it as "live in a strong state and maybe get killed" or "live in a weak state and maybe not make as much money".
DerekPermalink Reply by Derek on May 15, 2009 at 11:21am
While I agree that America's economic system doesn't fall into the capitalist mold entirely, I don't think you can make the arguement that it isn't capitalist. Whenever you take an idea and translate it into the real world, some adjustments will be made here and there, but if Russia and China were communist then America is Capitalist, it may not be a perfect system but it's arguably the closest in the world to what capitalism was originally supposed to be while having the ability to coexist with government.
I believe our capitalist society requires regulations and intrusion from the government because the goal of producing as much profit as possible is unsustainable and ridiculous. It's a system that circulates around surplus. The goal of any company should be to fulfill the market demand, not to artificially raise or lower it to increase profits. Once the market demand is met then the job becomes to sustain that. Economic systems are supposed to strive for sustainability not surplus. I'm not against the capitalist system because I think it's the fairest one we can come up with, but we control overspeculation and have educated consumers that choose to buy from companies with mission statements they morally agree with then we won't have oil companies controlling supply and demand or children in thailand working for 15 cents and hour. Evil corporations aren't evil, they're profit seeking.
It's like Thoreau said, I don't know the exact quote, but something about it he followed the path of every dollar he spent he would be disgusted at the path it traveled and the things it paid for. Our dollars are our signature of consent for any corporation we buy from that destroys rainforests or uses child laborers or muscles smaller companies out and steals their ideas. Capitalism is a system driven by independence, every man for himself, the best man wins. In order for it to work properly we need independent and educated minds make their own choices or else what's the point? We may as well be communists. So maybe the best option is the one already available, to activate our minds and vote for the survival and advancement of companies with positive agendas. We don't need to subsidize or bailout of use "government money" translation our money to save or support companies we couldn't save or support when we had the initial choice. Our dollar is our vote and corporations work for us not the other way around.
lowkeyPermalink Reply by lowkey on May 15, 2009 at 12:09pm
While I agree that America's economic system doesn't fall into the capitalist mold entirely, I don't think you can make the arguement that it isn't capitalist. Whenever you take an idea and translate it into the real world, some adjustments will be made here and there, but if Russia and China were communist then America is Capitalist, it may not be a perfect system but it's arguably the closest in the world to what capitalism was originally supposed to be while having the ability to coexist with government.

It is natural for there to be major differences between how a system is described on paper and what happens in the real world. This is why the communism we see in Russia, China, Vietnam, etc. has so very little in common with what Marx and Engels wrote and end up being more stalinist dictatorships than a workers paradise.

And to a certain extent this is true for capitalism as well, it's not quite the same because we have seen successful free market situations in the world and we've never seen a so called "true" communist government.

The problem with our system is that our system of government has taken so much control of the economic systems that we currently have more in common with Italian style fascism than with any free market system in history. So calling it capitalism or a free market is nothing short propaganda. Using the same logic, we could say that China isn't a communist nation but a capitalist one because they do allow a limited open market to exist.

I believe our capitalist society requires regulations and intrusion from the government because the goal of producing as much profit as possible is unsustainable and ridiculous. It's a system that circulates around surplus. The goal of any company should be to fulfill the market demand, not to artificially raise or lower it to increase profits. Once the market demand is met then the job becomes to sustain that. Economic systems are supposed to strive for sustainability not surplus. I'm not against the capitalist system because I think it's the fairest one we can come up with, but we control overspeculation and have educated consumers that choose to buy from companies with mission statements they morally agree with then we won't have oil companies controlling supply and demand or children in thailand working for 15 cents and hour. Evil corporations aren't evil, they're profit seeking.

We can debate if corporations are evil or just profit seeking but the root of the problem is their ability to lobby our elected officials so effectively. They are able to influence future legislation far more than any citizens group can. This reach is used more and more because it's often far easier to legislate your competition away rather than truly competing on the open market.

As PJ O'Rourke said "When buying and selling are controlled by legislation, the first things to be bought and sold are legislators."

This relationship has diverted a lot of money from the tax payers to save the companies from their own bad decisions in the stimulus packages that we have seen. This would never happen in an actual capitalist system. Natural selection should be as true for companies as it is for animals in the wild. We need to allow those that make bad decisions to die to make room for the upcoming good decision makers.

It's like Thoreau said, I don't know the exact quote, but something about it he followed the path of every dollar he spent he would be disgusted at the path it traveled and the things it paid for. Our dollars are our signature of consent for any corporation we buy from that destroys rainforests or uses child laborers or muscles smaller companies out and steals their ideas. Capitalism is a system driven by independence, every man for himself, the best man wins. In order for it to work properly we need independent and educated minds make their own choices or else what's the point? We may as well be communists. So maybe the best option is the one already available, to activate our minds and vote for the survival and advancement of companies with positive agendas. We don't need to subsidize or bailout of use "government money" translation our money to save or support companies we couldn't save or support when we had the initial choice. Our dollar is our vote and corporations work for us not the other way around.

I agree whole heartedly that we as consumers need to exercise more control on where our money goes. We need to encourage those companies that make ethical decisions and discourage those that have abusive policies. We do not need the government to regulate this for us because given all the variations, it's almost impossible to come up with legislation that would stop the bad while not harming the good. Plus I find that I can more effectively change my own behaviors than those of another person.

"Everyone thinks of changing the world, but no one thinks of changing himself."
-- Leo Tolstoy

"You must be the change you wish to see in the world."
-- Mohandas Gandhi

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