Socialism and capitalism are the two main social and economic models of our times. During the past fifty years, supporters of the capitalist model and those of the socialist doctrine have debated on the primacy of their respective model. Despite socialism’s large number of supporters, capitalism has grown so big and has infiltrated so many aspects of our lives that many have abandoned the idea of a possible new socialist order.
Before digging into the debate between socialism and capitalism, it is important to distinguish between the main features of the two doctrines.
- Economic, political, and social theory advocating for governmental or collective ownership and for the redistribution of goods
- No private property
- Means of production are controlled and owned by the state
- No one has personal control over resources
- Democratic control and redistribution of goods and means
- Production is directly and solely for use
- Emphasis on equality rather than achievement
- Economic system organized around corporate or private ownership of goods and means of production
- Production and prices are determined by competition in a free market
- Production, distribution, and management of wealth are controlled by corporations or privates
- Almost all property is privately owned
- Little state involvement in market exchanges
- Social and economic system based on the acknowledgement of individual rights and private property
- The purest form of capitalism is free market, or laissez-faire
- Emphasis on individual achievements rather than on quality
At ;first look, we could assume that socialism is the more adequate political and economic system, able to ensure equal growth and even distribution of wealth among the society. Socialism protects the most vulnerable segments of society and does not allow a few individuals to gain control over the vast majority of resources, means of production, and goods. Yet, socialism has often been demonized and seen as a political tool opposing the spread of the democratic ideals embodied in the capitalist American model.
The opposition between socialism and capitalism represents the confrontation between East and West. The end of the Cold War has not brought about the end of the competition between the two social, economic, and political models. Instead, the dichotomy has expanded into two new sets of values represented by the Washington consensus and the Beijing consensus.
- The term “Washington consensus” refers to economic norms that suggest that the best way to obtain economic growth is through the implementation of liberal, fee-market political and economic policies.
- It is based on private capitalism, liberal democracy and emphasizes political rights.
- Since 1989, it has been the model that Western countries have implemented to support developing countries.
- The term “Beijing Consensus” refers to the Chinese development model based on economic liberalization under tight political control.
- It represents an alternative to the Washington consensus for developing countries.
To date, the debate concerning the primacy of one doctrine over the other remains open.
Why has capitalism taken over?
Over the last fifty years, the process of globalization has allowed the capitalist model to spread all over the world. China and Russia, despite being led by communist parties, have had to concede to the advancement of capitalism and have adapted their economic systems to global trends. In fact, today’s Chinese economic model is called “Chinese style capitalism,” which means that economic liberalization is occurring under tight political control. The historical one-party system and the strict political rule have had to adapt to the dictates of the ruling global order.
Free market is often associated with individual achievements. As global trends are shifting towards individualistic societies and emphasizing the “self” over the “community,” the possibility of achieving individual goals and of owning bigger shares of wealth is increasingly appealing.
- economic growth,
- democratic liberalism,
- free competition,
- individual achievements,
- independence from the state, and
- growth of the middle class.
Capitalism has created societies characterized by
- strong inequality;
- supremacy of the capital (economics) over politics;
- apparent political, social, and economic freedom; and
- weakening of the middle class.
The capitalist dream has become a nightmare for many. According to the most recent report issued by Oxfam, the eight richest men on earth own “the same wealth as the 3.6 billion people who make up the poorest half of humanity.”
The gap between rich and poor is greater than ever
The liberal economic and political model should have allowed everyone to express and achieve his/her full potential. However, with the passing of time, it has become clear that this theory is deeply flawed. With the widening of the gap between rich and poor and with the cyclical economic crises, workers and members of the lower and middle classes have begun to change their views.
The capital has become a tool in the hand of a few powerful individuals who are controlling the majority of the wealth and, consequently, of the production and of the population. People belonging to the lower and middle classes have lost most of their power and often struggle to survive in a society ruled by economic principles.
The shifts in public opinion find their voice in emerging nationalistic political movements. In many Western countries, political parties and social movements are demanding closure and are pushing for a drastic change in the social and economic asset. Could socialism be the answer angry masses are looking for?
Is a shift possible?
Capitalism is the main reality of most Western and Eastern countries. It is embedded in our way of thinking and perceiving the world, and it has become the only viable option for production and exchange. Yet, the shifts in political stances and increased social discontent could bring about important changes in today’s social, political, and economic asset.
A drastic shift from global capitalism to global socialism is hard to foresee. In a socialist society, no one would have ownership of wealth and means of production. Socialism is based on common ownership, which can be described as
“ A state of affairs in which no person is excluded from the possibility of controlling, using and managing the means of production, distribution and consumption. Each member of society can acquire the capacity, that is to say, has the opportunity to realise a variety of goals, for example, to consume what they want, to use means of production for the purposes of socially necessary or unnecessary work, to administer production and distribution, to plan to allocate resources, and to make decisions about short term and long term collective goals. Common ownership, then, refers to every individuals potential ability to benefit from the wealth of society and to participate in its running.”
A society based on such principles would allow an equitable redistribution of resources and income and would enable everyone to benefit from wealth and production, as well as to conduct a dignified life. When surviving is no longer a major concern, there is space for creativity and human sympathy.
From a moral standpoint, socialism could be considered superior to capitalism; however, state control and common ownership seem a utopic ideal that could hardly fit in a world where greed and the search for power prevail over all other values.
A global socialist model could take over the current global capitalist paradigm only if basic human nature changed. In general, people’s priorities need to change, and collective values should replace the individual focus typical of the capitalist system.
The debate between socialism and capitalism is far from being over. History provides us with examples of failed socialist attempts, and the current global order clearly shows that the capitalist system does not work (or, at least, not for everybody). Shifting from one paradigm to the other would entail a drastic and dramatic change in the global social, political, and economic asset. This move would represent a shift
- from private ownership to common ownership,
- from individual focus to collective values,
- from free market to state intervention,
- from inequality to equality, and
- from individual achievements to collective well-being.
Is the world ready for such a drastic change? Can individuals set their interests aside in the name of bigger, more common achievements? Can socialism bring about progress or will it inevitably become a tool used for personal political agendas?
Ideologies are a powerful, yet dangerous instrument. Even the highest moral principles can be twisted and used for egoistic purposes. Capitalism has failed to live up to its promises and has created an enormous social divide; as such, many are turning to the socialist ideals. The transition will be long and painful, and we have no guarantees that it will bring about the much-needed changes.