Why Capitalism Is Better Than Socialism

Why Capitalism Is Better Than Socialism – Beyond the debate — capitalism vs. socialism — what comes next?, Pdf) capitalism vs. socialism: antinomy of nations or antinomy of systems?, Capitalism vs communism poster by budcharles on deviantart, Capitalism vs. socialism: what’s the difference?, What is the difference between capitalist, socialist and mixed economy, Joseph schumpeter: capitalism, socialism, and democracy (part ii)

I often see an eternal debate between supporters of capitalism and supporters of socialism, and it is almost always a very superficial debate. Although the discussion may be full of historical examples and figures, I still consider it superficial for two reasons:

The first reason is that there is mostly no consensus on what is socialism and what is capitalism. Supporters of each point of view use historical definitions to describe competing perspectives that do not correspond to the views that proponents of each point of view actually support.

Why Capitalism Is Better Than Socialism

Why Capitalism Is Better Than Socialism

Consequently, socialists use Europe in general and Scandinavia in particular as examples of socialism and refer to the United States and Chile as examples of capitalism, while capitalists use European countries in general. and Scandinavia in particular is regarded as an example of capitalism, and refers to Venezuela as an example of socialism.

Capitalism Vs. Socialism

In fact, all countries are considered examples of a good economy that serves its citizens, implementing a combination of capitalism and socialism, and any economy that applies only, or primarily, an approach failure. is fixed for , as I will explain later.

But the second, more important reason that makes the debate superficial in my opinion is that the parties to the debate tend to link one or the other point of view (capitalism or socialism) directly to certain economic reforms, without asking that point of view. What is the component of what? about this result? When does it bring the desired result? In what cases would this give undesirable results? And finally, what is the desired outcome – that is, to answer the question: What is a successful economy?

In this article I will present a new and deeper perspective on the economy, on socialist and capitalist perspectives, and on both known and new ways to build a successful economy.

The first question for any discussion about the best approach to a successful economy is this: What is a successful economy?

Socialism Or Capitalism: Which Is Better?

Now I believe we can easily agree that economies are built to serve humanity. Correct? There is no point in having an economy that is not beneficial to the people.

Therefore, it is impossible for an economy to best serve the people, it is impossible to avoid the question: what is the purpose of the people, that is, what is the ultimate goal of life?

I will not go into the logical proof of this philosophical question now, but the answer is very simple and may be obvious to many even without a full discussion.

Why Capitalism Is Better Than Socialism

Every goal, every motivation, every desire that a person has in life is ultimately due to his desire to reduce his suffering and increase happiness and good feeling. In other words, the ultimate goal of all goals, the goal of life, is to be happy.

Capitalism Vs. Socialism

Therefore, we can say that any system designed to serve the people and their goals, including the economic system, aims at making people happy.

We now have a scale that will allow us to measure the success of the economy. An economy is only as successful as it allows the people who participate in it to be happier.

People are naturally happy when they have something to eat, when they have personal security, when they are healthy, when they can make their dreams come true, and so on. In fact, the more people have different needs met, for example according to Maslow’s hierarchy of needs, the better we can refer to the economy.

When we understand this, we can also understand the limitations of measures like GDP (Gross Domestic Product) or average wage to check the success of the economy. Things that hurt people’s happiness can also increase GDP. For example, people with critical illnesses spend a lot of money on doctors and medicines and this leads to an increase in GDP, but it cannot be said that an increase in GDP from a growing illness represents an increase in overall happiness in society. Is.

Capitalism Vs. Socialism Infographic (version 3.1)

The same applies to average measures such as average salary. An economy in which many people live in poverty but the average wage is high due to earnings of a few millions and raising the average cannot be considered a successful economy because it does not increase happiness among the population. Unlike money, when it comes to happiness, the law of diminishing marginal utility applies, which is familiar to anyone who studies economics. This means that an extra thousand dollars per month will result in a greater increase in happiness for the poor person than for the rich person. The measure of average wage does not reflect reduction in marginal utility, so it is an accurate measure of happiness in society.

When we talk about the capitalist or socialist point of view, it makes no sense for me to talk about the dictionary definitions of capitalism and socialism or the definitions defined centuries ago. I believe we should only mention the principles supported by proponents of capitalism and socialism.

In general, the principles of the capitalist approach these days can be stated as: free market, minimal government intervention, minimal regulation, small public sector and low taxes.

Why Capitalism Is Better Than Socialism

I also find it important to mention that most of the proponents of capitalism I have met did not support capitalism with a philanthropic or compassionate purpose. I mean, I didn’t feel like they were endorsing a capitalist approach so that more people would be happy, but with a drive to increase greater self-happiness. In fact, Adam Smith’s invisible hand theory argues that in a free market, when everyone takes care of themselves, everyone gets better.

Chart: Socialism Slightly Increases But Capitalism Is Still Preferred

Therefore, even if the motive is indeed selfish, it does not contradict the fact that the capitalist approach can contribute to the happiness of the masses, so it is important to examine how this is done and what are the advantages of this method.

The driving force – The most important thing to understand is that the driving force in the capitalist system is the maximum self-profit. The companies interest is not in the consumer’s wellbeing**, but in the extent that it contributes to the profit. This is why the consumer benefits from a competitive market as companies try to favor the consumer to earn more.

Competitiveness is a necessary condition for the transformation of maximizing profit need into consumer’s benefit. Once the market is no longer competitive, companies will stop improving for the customer and even cut back on the quality of their service, as it will no longer be necessary to maximize profit.

Another essential condition is the availability of information. A market that has many options, but about which the public has no information, whether because of lack of advertising or concealment, or because the information in its possession is not accurate, for example because it is misleading advertising Is fraudulent – ​​This market cannot be perfectly competitive because it inhibits competition or it creates fraudulent competition that is based not on the quality of services and products but on the psychological characteristics attributed to them.

Poll: 59% Of Americans Have Favorable Views Of Capitalism; 59% Have Unfavorable Views Of Socialism

Freedom of choice – The free market acts according to the will of the people. In the free market, a person cannot be forced to buy a product or service that he does not want. Suppose the public is not interested in brinjal cheese, then the market will not produce it because the public does not want it. In socialism, the government chooses to spend public money, taxes, on services that citizens did not necessarily choose, and so it indirectly forces them to buy products that do not necessarily meet their needs. Do it For this reason, for everyday goods and services, such as clothing, food, entertainment, and so on, the capitalist method, in which the people make decisions for themselves, is superior to those made by the government.

Efficiency and Professionalism – Generally the private market operates more professionally and efficiently than the government and the public sector. The need for profit drives players in a free competitive market to optimize, improve, accelerate and invest their resources, which come from their own pockets, with discretion and knowledge. Also, each player in the market specializes in the area where he benefits.

On the other hand, the government and the public sector are seen as slow and cumbersome. Their main objective is not profit, so they have no incentive to improve, be more efficient, or be in a hurry. Government and public sector finances come from the public. They do not come from the pockets of decision-makers, so they are used less carefully and less wisely.

Why Capitalism Is Better Than Socialism

** The exception is when it comes to independent or small businesses whose owners meet with customers directly. In these cases, the campaign is often not just to maximize profit, because they see the customer as an individual, not just a consumer.

Chart: Voter Feelings On Capitalism And Socialism

At the heart of socialism, as seen by its proponents, is the idea of ​​increasing happiness in society through mutual responsibility. This mutual guarantee is reflected in taking some of these

Joseph Schumpeter: Capitalism, Socialism, And Democracy (Part II), Capitalism Vs. Socialism [classic], Capitalism Vs. Socialism, How Capitalism Compares To Communism, Socialism And Capitalism, , Difference Between Capitalism And Socialism, Difference Between Capitalism Vs Socialism, Socialism” Vs. “capitalism”: What Left And Right Get Wrong About The Debate, Economics Of Industrial Rev. Capitalism Vs. Socialism [Marxism]

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