October 18, 2013
Socialism vs. Capitalism
Contemporary History
Professor Quincy Harris

Capitalism and Socialism are two different types of systems. There lies a huge difference between the beliefs of both. I plan to discuss the differences of each and discuss the pros and cons of both as well as discuss which would be better for Americans. Sometime between 16th and 19th century capitalism first appeared. Once Feudalism failed Capitalism became the stronger system used in the western world. During the time of the Industrial Revolution Capitalism spread throughout the world. In order to become an industrialized nation then Capitalism had to be embraced. Socialism’s movement was started by Karl Marx (intellectual advocate.) Socialism is an economic system characterized by social ownership of the production and co-operative management of the economy. Socialism first appeared during the 19th century.

According to (Historyworld.net).The essential characteristics of capitalism only become evident with an increase in scale in two quite separate contexts. One is the formation of joint-stock companies, in which investors pool their resources for a major commercial undertaking. The other, not evident until the Industrial Revolution, is the development of factories in which large numbers of workers are employed in a single private enterprise. Speculative trading enterprises in the Middle Ages are undertaken by individual merchants, operating in family groups or partnerships but acting essentially on their own behalf. Some, such as the Polo family, are entirely independent. Others bind themselves voluntarily into guilds, such as the Hanseatic League, accepting certain regulations on their trade in return for the support of a powerful organization. | | | | | |
According to (Historyworld.net). The underlying theme of capitalism is the use of wealth to create more wealth. The simplest form of this is lending money at interest, reviled in the middle Ages as the sin of usury. At a more sophisticated level capitalism involves investing money in a project in return for a share of the profit. With the rapid development of European trade and prosperity in the 13th century, cities in Italy and the Netherlands witness a creation of wealth which is capitalist in kind - because any merchant is in essence a capitalist, risking his pot of money each time he buys in one place to sell in another. Florence in the 14th century demonstrates more familiar indications of capitalism. It has its great banking families, engaging in transactions across the breadth of Europe. It even has a successful strike, by underpaid day workers in the cloth industry who want a share in the benefits enjoyed by their employers.

According to ( Ashbrook.org) Under socialism a ruling class of intellectuals, bureaucrats and social planners decide what people want or what is good for society and then use the coercive power of the State to regulate, tax, and redistribute the wealth of those who work for a living. In other words, socialism is a form of legalized theft.
The morality of socialism can be summed-up in two words: envy and self-sacrifice. Envy is the desire to not only possess another’s wealth but also the desire to see another’s wealth lowered to the level of one’s own. Socialism’s teaching on self-sacrifice was nicely summarized by two of its greatest defenders, Hermann Goering and Bennito Mussolini. The highest principle of Nazism (National Socialism), said Goering, is: “Common good comes before private good.” Fascism, said Mussolini, is a life in which the individual, through the sacrifice of his own private interest realizes that completely spiritual existence in which his value as a man lies.” Socialism is the social system which institutionalizes envy and self-sacrifice: It is the social system which uses compulsion and the organized violence of the State to expropriate wealth from the producer class for its redistribution to the parasitical class.

According to (lifestyle.iloveindia.com) the pros and cons of socialism are as follows in a Fair System- Socialism gives equal distribution of national wealth and provides everyone with equal opportunities, irrespective of their, color, caste, creed or economic status. Socialism, in its truest sense, means equality by all means. Reducing Disparities- Socialism reduces the social, economic, and political inequalities that exist within capitalist societies. By taking the ownerships of production units from the rich and presenting them to the workers, the government gives the workers a chance to earn more profits and thus rise to levels of economic well-being. More Humane & True-The effort to make everybody equal in economic, social, and political terms makes socialism more morally worthwhile than capitalism. It reinforces the fact that everyone was created equally and it was only through human actions that disparities arose. Eliminates Social Evils- Socialism reduces poverty with eatable wealth distribution. It also eliminates ill health, as it lays the foundation for the availability of proper health facilities for everyone. Socialism eliminates other forms of social deprivation too, by caring for everyone. Improved Standard Of Living- The idea behind socialism is to bring up the living standards of the poorest. It actually works towards raising the living standards to similar levels, as the better-off members of the respective societies. Creates Better Human Resources- As all people, irrespective of their differences, are provided extensive public services and better facilities, they achieve their full potential. Better education facilities for all also help in creating better human resource. Manpower doubles, thus doubling the country’s economic growth, as everyone works towards a life of betterment. Unity-As people work for a common cause and all the profits are shared equally, the feeling of selfishness is eliminated and a united feeling is gained. Plus, since socialism bars the difference caused on the grounds of color, sex, creed or religion, harmony and unity become the keywords for the countrymen. Disadvantages of Socialism
According to (lifestyle.iloveindia.com) Unreal Theory-True socialism is an imaginative theory and cannot be implemented as it is. Today, socialism is not adopted in the same way, as it was advocated by Karl Marx and other socialists. The original form of socialism is neither preached nor practiced. Improper Implementation-In socialist countries today, there are a handful of bureaucrats who control and use the power of the state. They redistribute and regulate wealth and decide on taxation for the people. Thus, in reality, people do not have control over wealth. This limits people’s political freedom and reverses the overall concept. Negatively Influences Growth of Economy- Socialism is actually economically inefficient, as it puts off entrepreneurs from generating wealth, because they usually have to pay higher taxes. Poverty & Social Evils are not eliminated- Socialism might redistribute some of the wealth of the richest members of the society to the poor, but this move does not eliminate poverty as a whole. The overall growth of economy suffers considerably. If there is not enough wealth, then distribution can be hampered. No Real Increase in Standard Of Living-Instead of improving the living standards for all, socialism actually lowers the income of the richest to reduce the divide and make them fall close to the income levels of the poorest. Boosts Incompetence- As socialism provides the poorest with higher levels of income via social security payments, it deters them from working hard, if at all. It also creates a negative feeling in the minds of hard working fellows, as they gain no extra incentives for working hard. Adding to their woes, lazy people get paid equally as they do. This negatively impacts productivity and thus economic growth.

According to (Ashbook.org) Capitalism is the only moral system because it requires human beings to deal with one another as traders–that is, as free moral agents trading and selling goods and services on the basis of mutual consent.
Capitalism is the only just system because the sole criterion that determines the value of thing exchanged is the free, voluntary, universal judgment of the consumer. Coercion and fraud are anathema to the free-market system.
It is both moral and just because the degree to which man rises or falls in society is determined by the degree to which he uses his mind. Capitalism is the only social system that rewards merit, ability and achievement, regardless of one’s birth or station in life.

I believe that Capitalism is the best system for America. In a Capitalistic economy citizens are allowed to earn a living that is comfortable according to their output. I couldn’t imagine living in a world where even though I’m a hard working citizen I receive the same amount of pay as my neighbor who doesn’t work. In a world of Capitalizing there is more opportunity to grow and the outlook on life is much better. If I had a choice I would definitely choose Capitalism as a economic system.

References Bamber., G. (2002, October 2). History of Capitalism. Retrieved October 15, 2013, from History World website: http://www.historyworld.net The Author talks about the origins of capitalism in this article. The article tells the reader about the underlying theme of capitalism and how it works to create more wealth for all. This task involves investing money with the intent of receiving a profit in return.

Pros And Cons Of Socialism. (2013). The Iloveindia website. Retrieved 02:15, Oct 16, 2013, from http://lifestyle.iloveindia.com/lounge/pros-and-cons-of-socialism-10811.html. The site provides insight on the pros and cons of socialism. Some advantages discussed are fair system, reducing disparities, more humane and true. The benefit this site provides is the pros and cons of socialism.

Thompson, C. B. (1993, October). Socialism vs. Capitalism: Which is the Moral System? Retrieved October 15, 2013, from Ashbook website: http://ashbrook.org/publications/onprin-v1n3-thompson/ Ashbook.com provides insight into the drastic differences between socialism and capitalism. These site list examples of how each rule affects the individual living under that rule. An example of Socialism states "Under socialism there are built-in incentives to shirk responsibility. There is no reason to work harder than anyone else because the rewards are shared and therefore minimal to the hard-working individual; indeed, the incentive is to work less than others because the immediate loss is shared and therefore minimal to the slacker. "Under the rule of Capitalism it states that “The incentive is to work harder because each producer will receive the total value of his production–the rewards are not shared." This site benefits my research paper because it offers an explanation of Socialism and Capitalism.