Socialism and capitalism are two philosophies that many countries have used for decades. Countries like the United States, France, Russia, China – all practice these ideologies in different ways. But there has always been a question of whether socialism can operate independently from capitalism or vice versa. We’ll look at how each idea is implemented worldwide and answer some of our questions about their connection.
Characteristics of Socialism
Socialism is a political and economic theory of social organization that advocates for the communal ownership or regulation of production, distribution, and exchange. ” [Source].
Socialism is built on the idea of dissolving a capitalist system and enacting a society that is dominated by equality. The fundamental principle of a socialist movement is to create a world in which everyone is treated equally. Any form of social division is considered evil designed to isolate and discriminate against other members of society. When it comes to the social setup, socialists argue that all people must be equal, so there is zero tolerance to stratifications.
A socialist government is set up through democratic means and has control over the production and distribution of wealth. The distribution of wealth is based on social needs and an individual’s contribution to the economy. The public is encouraged to contribute to the development of their society.
Karl Marx predicted that the working class would bring down capitalism through violent upheaval.
Characteristics of Capitalism
“Capitalism” is defined as an “economic system in which private individuals own and control the means of production.” ” [Source].
Capitalism is dominated by private enterprises regarded as economic engines necessary for growth. These actors are given control of society’s major businesses. Also, social classes exist in a capitalist society, and they are very visible, especially among the ‘rich’ and ‘poor’ classes. A capitalist system does not support the poor and creates obstacles to prevent any advancement by the working classes.
Our generation is obsessed with self-growth and materialism at the expense of societal progress. The idea of private property and individual freedom is fundamental to capitalism. They are generally seen as selfish people that neglect the disadvantaged.
Intersections between Socialism and Capitalism
Socialism capitalism has numerous economic, social, and political pursuits. Both systems acknowledge the importance of labor and capital as the primary economic forces. Furthermore, capitalist and socialist societies place a high premium on natural resources, benefiting society. Humans give value to things after they are utilized—[Source].
Both capitalism and socialism are used in countries “with mature democracy despite it not being necessary” [Source]. In a capitalist society, democracy is given as individuals are permitted to own factors of production and use them to gain personal wealth. For a socialist society, democracy is seen through equal distribution of wealth and factors used to create wealth. In these two systems, the governments are elected through democratic methods.
On both sides, there is also government intervention. A socialist state ensures that wealth is distributed equally according to people’s requirements. In comparison, capitalism needs to be supervised by rules from the government to avoid monopolization and disruptive behaviors.
People are rewarded under a capitalist system by amassing individual wealth. Socialism rewards people through sharing of wealth based on one’s contribution. While capitalism focuses on personal growth, it does not neglect the basic requirements of average citizens and ensures that public services are provided to the general public, thus functioning like a socialist tool. More so, these economical systems experience scarcity of resources in which there is a ‘limited supply of goods and services. This is where both systems propagate for an even distribution of wealth.
Are they Mutually Exclusive?
It is argued that “The matter of independence has been discussed in various debates for a continued period where policymakers have stated that there is no economic system which can purely exist on its own.” In other words, most countries use a mixture of two or more systems to fulfill their requirements. “This is profoundly seen in capitalism system where government taxes individuals in the country to improve the social welfare of its citizens. The government promotes social amenities like hospitals, sports facilities, education, water, and power. Similarly, small-scale private enterprises are allowed to exist in socialist systems. They can make their own decisions hence refuting the claims of pure socialism” [Source].
A closer look at the two economic systems reveals that capitalism promotes the success of business owners, who in turn grow a nation’s economy, and everyone benefits. Also, these private players tend to have big companies responsible for offering employment to many people [Source]. Private companies in many European countries do provide services to the community and are involved in charity work and giving back initiatives. The government also takes taxes from rich people and distributes them to socialist activities. Millionaires and billionaires are responsible for a significant portion of a country’s economy, ensuring that public programs are designed to assist people in gaining income. Hence, capitalism and socialism work hand in glove in running a country, whether in politics, economy, or social issues.
In response to whether socialism and capitalism are mutually exclusive in a society, Vilmos Shepard has this to say “No, obviously not. No economic model needs to be or has been absolute. We have never had uncontrolled capitalism, or total socialism, or real communism, but we have had some amount of all of them mixed together [Source].
Examples of Socialism working alongside Capitalism
The United States was chosen as an excellent example of how socialism and capitalism can coexist. The country has many socialist programs designed to serve its citizens. Everything preceded by the word “public” is covered by these initiatives. Public transport, public schools, public libraries, among others. There are also other socialist policies which include medicare, social security, the minimum wage, and child labor laws [Source].
On the other hand, it was posited that “The United States of America is one of the leading countries to follow capitalism. “One of the most important reasons for the rise of global firms such as Apple, Microsoft, Amazon, Google, and Facebook is because of innovation led by capitalism.” [Source]. This is not only a phenomenon that is restricted to the United States, but it can also be seen in China, Russia, and Japan, where private investors own huge businesses.
