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Phil 101 and Phil 100

For B.F. Skinner Section on Utopia

I. Capitalism vs Socialism: Material from website: “What’s the Difference?”

Additions and modifications by Dr. Gayhart



The central arguments in the socialism/capitalism debate are about economic equality and the role of government: Soocialists believe that economic inequality is bad for society. The government is responsible for reducing inequality through programs that benefit the poor-- e.g. free public education, free or subsidized healthcare, social security for the elderly, higher taxes on the rich. Capitalists believe that government does not use economic resources as efficiently as private enterprise and therefore society is better off with the free market determining economic winners and losers. [for Capitalists, the reward for your effort is private property—OWNERSHIP of your house, car, land, etc. is a visible reward for your achievement. And achievers are granted higher status—you are honored as among the few who is to be congratulated. And if you do not make it in the competitive game for assets, you are stigmatized as being a “loser”—someone is either “lazy” or a “freeloader.” Socialists try to narrow the gap between the haves and the have-nots. It is a basic belief that all people have a right to a comfortable life, if the economy is able to supply all its members with ample food and shelter. “The U.S. is widely considered the bastion of capitalism and large parts of Scandinavia and Western Europe are socialist democracies. However, the truth is that every developed country has some programs that are socialist.” Socialism is focused more on providing generous housing subsidies, parental leaves programs, public health protections, and unemployment benefits. ]

| |Capitalism |Socialism |

|Philosophy: |Capital (or the "means of production") is owned, operated, and|From each according to his ability, to each according to his |

| |traded for the purpose of generating profits for private |contribution. Emphasis on profit being distributed among the |

| |owners or shareholders. Emphasis on individual profit rather |society or workforce in addition to receiving a wage. |

| |than on workers or society as a whole. | |

|Ideas: |Laissez-faire means to "let it be"; opposed to government |All people should be given an equal opportunity to succeed. |

| |intervention in economics because capitalists believe it |Workers should have most say in their factory's management. |

| |introduces inefficiencies. Free market produces the best |The free market suffers from problems like tragedy of the |

| |economic outcome for society. Govt. should not pick winners |commons. Government regulation is necessary. |

| |and losers. | |

|Economic System: |Free-Market economy. |Wealth redistributed so that everyone in society is given |

| | |somewhat equal shares of the benefits derived from labor, but |

| | |people can earn more if they work harder. Means of production |

| | |are controlled by the workers themselves. |

|Key elements: |The accumulation of capital drives economic activity - the |Economic activity and production especially are adjusted to |

| |need to continuously produce profits and reinvest this profit |meet human needs and economic demands. "Production for use": |

| |into the economy. "Production for profit": useful goods and |useful goods and services are produced specifically for their |

| |services are a byproduct of pursuing profit. |usefulness. |

|Economic coordination: |Relies principally on markets to determine investment, |Planned-Socialism relies principally on planning to determine |

| |production and distribution decisions. Markets may be |investment and production decisions. Planning may be |

| |free-markets, regulated-markets, or may be combined with a |centralized or decentralized. Market-socialism relies on |

| |degree of state-directed economic planning or planning within |markets for allocating capital to different socially-owned |

| |private companies. |enterprises. |

|Political movements: |Classical liberalism, Social liberalism, Libertarianism, |Democratic Socialism, Communism, Libertarian Socialism, |

| |Neo-liberalism, Modern Social-Democracy |Anarchism, Syndicalism |

|Ownership structure: |The means of production are privately-owned and operated for a|The means of production are socially-owned with the surplus |

| |private profit. This drives incentives for producers to engage|value produced accruing to either all of society (in |

| |in economic activity. |Public-ownership models) or to all the employee-members of the|

| | |enterprise (in Cooperative-ownership models). |

|Religion: |Permitted/Freedom of Religion |freedom of religion |

|Key Proponents: |Adam Smith, David Ricardo, Milton Friedman, Fredrich Hayek, |Robert Owen, Pierre Leroux, Karl Marx, Fredrick Engels, John |

| |Ayn Rand |Stuart Mill, Albert Einstein, George Bernard Shaw, Leo |

| | |Tolstoy, Emma Goldman |

|Way of Change: |Fast change within the system. In theory, the relationship |Workers in a Socialist-state are the agent of change rather |

| |between buyer and seller (the market) is what fuels what is |than any market or desire on the part of consumers. Change by |

| |produced. Government can change rules of conduct practices |the workers can be swift or slow, depending on change in |

| |through regulation. |ideology or even whim. |

Tenets

One of the central arguments in economics, especially in the socialism vs. capitalism debate, is the role of the government. A capitalist system is based on private ownership of the means of production and the creation of goods or services for profit. A socialist system is characterized by social ownership of the means of production, e.g. cooperative enterprises, common ownership, direct public ownership or autonomous state enterprises.

Proponents of capitalism espouse competitive and free markets, voluntary exchange (over forced exchange of labor or goods). Socialists advocate greater government involvement but the differ in the type of social ownership they advocate, the degree to which they rely on markets versus planning, how management is to be organized within economic enterprises, and the role of the state in constructing socialism.

Criticisms of Socialism and Capitalism

Criticisms of Capitalism

Critics argue that capitalism is associated with: unfair and inefficient distribution of wealth and power; a tendency toward market monopoly or oligopoly (and government by oligarchy); imperialism, counter-revolutionary wars and various forms of economic and cultural exploitation; repressions of workers and trade unionists, and phenomena such as social alienation, inequality, unemployment, and economic instability. Critics have argued that there is an inherent tendency towards oligolopolistic structures when laissez-faire is combined with capitalist private property. Capitalism is regarded by many socialists to be irrational in that production and the direction the economy is unplanned, creating many inconsistencies and internal contradictions.

In the early 20th century, Vladimir Lenin argued that state use of military power to defend capitalist interests abroad was an inevitable corollary of monopoly capitalism. Economist Branko Horvat states, "it is now well known that capitalist development leads to the concentration of capital, employment and power. It is somewhat less known that it leads to the almost complete destruction of economic freedom." Southern Methodist University Economics Professor Ravi Batra argues that excessive income and wealth inequalities are a fundamental cause of financial crisis and economic depression, which will lead to the collapse of capitalism and the emergence of a new social order.

Environmentalists have argued that capitalism requires continual economic growth, and will inevitably deplete the finite natural resources of the earth, and other broadly utilized resources. Murray Bookchin has argued that capitalist production externalizes environmental costs to all of society, and is unable to adequately mitigate its impact upon ecosystems and the biosphere at large. Labor historians and scholars, such as Immanuel Wallerstein, Tom Brass and latterly Marcel van der Linden, have argued that unfree labor — by slaves, indentured servants, prisoners, and other coerced persons — is compatible with capitalist relations.

Many religions have criticized or opposed specific elements of capitalism; traditional Judaism, Christianity, and Islam forbid lending money at interest, although methods of Islamic banking have been developed. Christianity has been a source of both praise and criticism for capitalism, particularly its materialist aspects.

Criticisms of Socialism

Criticisms of socialism range from claims that socialist economic and political models are inefficient or incompatible with civil liberties to condemnation of specific socialist states. There is much focus on the economic performance and human rights records of Communist states, although there is debate over the categorization of such states as socialist.

In the economic calculation debate, classical liberal Friedrich Hayek argued that a socialist command economy could not adequately transmit information about prices and productive quotas due to the lack of a price mechanism, and as a result it could not make rational economic decisions. Ludwig von Mises argued that a socialist economy was not possible at all, because of the impossibility of rational pricing of capital goods in a socialist economy since the state is the only owner of the capital goods. Hayek further argued that the social control over distribution of wealth and private property advocated by socialists cannot be achieved without reduced prosperity for the general populace, and a loss of political and economic freedoms.

Hayek's views were echoed by Winston Churchill in an electoral broadcast prior to the British general election of 1945:

a socialist policy is abhorrent to the British ideas of freedom. Socialism is inseparably interwoven with totalitarianism and the object worship of the state. It will prescribe for every one where they are to work, what they are to work at, where they may go and what they may say. Socialism is an attack on the right to breathe freely. No socialist system can be established without a political police. They would have to fall back on some form of Gestapo, no doubt very humanely directed in the first instance.

II Communism vs Socialism

In a way, communism is an extreme form of socialism. Many countries have dominant socialist political parties but very few are truly communist. In fact, most countries - including staunch capitalist bastions like the U.S. and U.K. - have government programs that borrow from socialist principles. "Socialism" is sometimes used interchangeably with "communism" but the two philosophies have some stark differences. Most notably, while communism is a political system, socialism is primarily an economic system that can exist in various forms under a wide range of political systems.

| |Communism |Socialism |

|Philosophy: |From each according to his ability, to each according to his |From each according to his ability, to each according to his |

| |needs. Free-access to the articles of consumption is made |contribution. Emphasis on profit being distributed among the |

| |possible by advances in technology that allow for |society or workforce in addition to receiving a wage. |

| |super-abundance | |

|Definition: |A theory or system of social organization based on the |A theory or system of social organization based on the |

| |holding of all property in common, with actual ownership |holding of most property in common, with actual ownership |

| |ascribed to the community or state |ascribed to the workers |

|Ideas: |Human societies have always been divided into warring |All people should be given an equal opportunity to succeed. |

| |classes. The Industrial Revolution has enriched the wealthy |Workers should have most say in their factory's management. |

| |and impoverished the poor. The workers must overthrow the |The free market suffers from problems like tragedy of the |

| |bourgeois. |commons. Government regulation is necessary. |

|Economic System: |Wealth redistributed so that everyone in society is given |Wealth redistributed so that everyone in society is given |

| |equal shares of the benefits derived from labor. All means of|somewhat equal shares of the benefits derived from labor, but|

| |production are controlled by the state. |people can earn more if they work harder. Means of production|

| | |are controlled by the workers themselves. |

|Political System: |No leader, directed directly by the people. This has never |Multiple parties, but the ruling party usually goes by the |

| |been actually practiced, and has just used a one-party |name "Socialist". |

| |system. | |

|Social Structure: |All class distinctions are eliminated. |Class distinctions are diminished |

|Economic Coordination: |Government controls all business, as well as Business |Planned-Socialism relies principally on planning to determine|

| |decisions. |investment and production decisions. Planning may be |

| | |centralized or decentralized. Market-socialism relies on |

| | |markets for allocating capital to different socially-owned |

| | |enterprises. |

|Free Choice: |In real communism, where a leader does not exist, everything |All choices, including education, religion, employment and |

| |is chosen freely. In those that have been practiced though, |marriage, are up to the individual. All health care and |

| |all choices, including education, religion, employment and |education is provided free to everybody |

| |marriage, are controlled by the state. | |

|Political Movements: |Leninism, Trotskyism, Marxism-Leninism, Maoism, |Democratic Socialism, Communism, Libertarian Socialism, |

| |Left-Communism |Anarchism, Syndicalism |

|Key elements: |An enhanced form of the principle of "Production for use". |Economic activity and production especially are adjusted to |

| | |meet human needs and economic demands. "Production for use": |

| | |useful goods and services are produced specifically for their|

| | |usefulness. |

|Religion: |Abolished. |freedom of religion |

|Private Property: |Abolished |two kinds of property, private property, such as land, |

| | |houses, clothing, etc. owned by the individual. Public |

| | |property, factories, and means of production owned by the |

| | |state but with worker control |

|Key Proponents: |Karl Marx, Fredrich Engels, Vladimir Lenin, Leon Trotsky |Robert Owen, Pierre Leroux, Karl Marx, Fredrick Engels, John |

| | |Stuart Mill, Albert Einstein, George Bernard Shaw, Leo |

| | |Tolstoy, Emma Goldman |

|Discrimination: |In theory, all members of the state are considered equal |The people are considered equal, laws are made when necessary|

| | |to protect people from discrimination |

|Ownership structure: |The means of production are commonly-owned, meaning no entity|The means of production are socially-owned with the surplus |

| |or individual owns productive property. Importance is |value produced accruing to either all of society (in |

| |ascribed to "usership" over "ownership". |Public-ownership models) or to all the employee-members of |

| | |the enterprise (in Cooperative-ownership models). |

|Way of Change: |Government in a Communist-state is the agent of change rather|Workers in a Socialist-state are the agent of change rather |

| |than any market or desire on the part of consumers. Change by|than any market or desire on the part of consumers. Change by|

| |government can be swift or slow, depending on change in |the workers can be swift or slow, depending on change in |

| |ideology or even whim. |ideology or even whim. |

|Means of control: |Proletariat engages in violent rebellion. |Proletariat engages in taking charge of the factories and |

| | |means of production. |

|Variations: |Include Marxism, Leninism, Stalinism and Maoism |libertarian-socialism, and anarcho-socialism, |

| | |anarcho-syndicalism |

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