The economy of the world can seem one so wrong and yet so complicated. What has become of capitalism and socialism in the modern day and era? These two theories are surrounded by a series of pulls back and forth. They present a real battle of opinions. Capitalism in an economic and political systems in which a country”s trade and industry are controlled by private owners for profit rather than by the state. Example of capitalist country being New Zealand, Australia and Canada. Socialism on the other hand is characterized by state ownership of business and services, central argument is to make the society more equitable. Russia is socialist country though it started off as a capitalist nation.
In a 21st century where there’s increased desire to change, the question that many would ask is, how is the capitalist approach keeping up with the pace? This economic and political system controls the trade and industry in a private manner locking out government influence. This means that they have economic freedom, private property rights and a business that is more inclined on making profits. Some may argue that a socialist approach would work best for an economy, but a case study of the Tanzanian is one instance of a failed socialism and we have Russia which transitioned from capitalism to socialism. The results so far have been catastrophic; rampant corruption, a decline in the quality of life and semi criminal monopoly market.
Capitalism creates an economy that is profitable and civilised all at once. It is primarily an economic system. It addresses how the economic actors interact. All kinds of social programmes are built within capitalist economies. Capitalism has encouraged people and business to put more effort to ensure efficiency at all times. More jobs have been created, many people can work for capitalist thereby earning income from wages and salaries which they use in acquisation of basic neccesities of life, provision of efficient services and people are in a position to enjoy a variety of good and services. Capitalist have also promoted advancement in the medical field leading to increase in life expectancy.
What has become of capitalism ? The desire to earn more and more profits above anything else has messed up capitalism. Capitalist always seeks to make the worst quality of goods that consumers can tolerate, selling it for the highest price possible while paying the lowest wages possible. Laboures are not rewarded in accordance to their work. Greed among the capitalist have turned them to be heartless. They even opt to make money through means which are concidered immoral and ignoble. Capitalism have lifted billions out of poverty, but has also been the most desructive force. A capitalist economy does not allow the forces of market that is demand and supply to affect price since the prices are determined by capitalist themselves, this grant them monopoly power which more often than not leads to exploitation of both workers and consumers. Capitalism is therefore exploitative, unsustainable and antidemocratic since it has promoted economic inequality and environmental degradation.
Socialism advocates for shared prosperity and division of wealth. This led to reduction of poverty levels, free healthcare to citizens who would have otherwise unable to access healthcare services. It has also promoted social justice security and welfare. Socialist encourages selflessness which has led the economy to ruins. It has led to bureaucracy and misappropriation of resources. System of bribes, ruin and rampant corruption. Alleged goals of socialism were; abolition of poverty, achievement of general prosperity, peace, progress and human brotherhood. The results have been a terrifying failure. Good intentions turned out to be disastrous. Instead of prosperity , socialism has brought economic paralysis to some of the countries that have tried it. Socialism seeks to legislate the poor into freedom by legislating the wealthy out of freedom. One person receives without working for it and the other one who works for it doesn’t trully get the true reward of his labour socialism prevents people from leaving poverty.
It is evident that socialism has the possibility of rampant corruption and capitalism may have the tendency of economic seggregation. The more likely option that we can adopt is activism capitalism. In this new system, a conversation on how business become platforms for social goods to come in play. The focus moves from being profit oriented system to finding solution to human problems and in the long run making profits. Capitalist will have to invest more on training young people who are future enterpreneurs investing in small businesses and providing social amenities. This combination of social efforts doesn’t only create a better life for citizens but also allows them to penetrate the market segment that would otherwise have been difficult. Activism capitalism encourages social corporate responsibility and reconciles human needs to the value of business. There is much more to life other than self.
What socialism and capitalism has done in the past is irrelevant. We need to look at what it means for us in the future. If we want new economics, all we have to do is to choose to have it. The challenge of the future is how can we make money humanly without exploiting both people and environment while at the same time addressing the essential human needs. Let us all purpose to make the right choices for the common good; Economics for the common good.