While it is a different economic system, many people confuse socialism with communism. Under communism, everything is owned communally, or by everyone. Ideally, there is no government or class division, and no money; each person contributes to society as best as he or she is able, and takes from that society only what he or she needs. The decisions made by that society are supposed to benefit the people as a whole, not any individual.
Historically, countries that have been called “communist” actually practiced some form of socialism, usually run by one political party. The state typically owned all forms of production and practiced very strict central planning — meaning that the government decided how all resources were to be used. Many critics argue that most governments that are called “communist” are really very different from the word’s true meaning.
Mixed Economies
Very few societies are purely capitalist or purely socialist, although most are more strongly one than the other. The United States, for example, is considered to be a capitalist society, but the Social Security system, which provides support for people who are unable to work, is socialistic. Sweden is considered by some people to be a socialist country because of its high tax rate and large welfare system, but the majority of industry in the nation is in private hands, which is capitalistic.
Critiques
The criticisms of both capitalism and socialism largely stem from different opinions about how economic forces should shape governments and societies. Some critics believe that the human spirit needs competition to fully develop, while others emphasize the need for people to cooperate with each other, ensuring that the needs of all citizens are met. Within each philosophy, there are additional critics who disagree about how each economic or political system would work best.
Critics of capitalism note that the marketplace can be unstable, presenting real dangers to the well-being of those who are not wealthy or who are otherwise vulnerable. Giving business owners free rein to set the terms of employment and to keep most of the profits from their enterprises to themselves, can establish a wealthy class which, in turn, can suppress the freedom of others. These critics also note that a purely capitalist society does not address the needs of those who are truly unable to compete either as business owners or as laborers. Without some social support systems, such as Social Security or welfare, those who cannot work or earn enough money to survive must lead a precarious existence, and may be forced to rely on family or private charity for support.
Those who criticize socialism observe that heavy taxation to provide equal social services for all citizens can discourage business owners from innovation and excellence, given that the owner won’t personally profit from his or her efforts. In addition, when the government plans the economy, some critics question whether officials and their policy advisors really understand what is best for a country’s citizens; such socialist governments may give their citizen’s no choice in deciding what kinds of services they really want or need. In addition, capitalist critiques of generous socialist social welfare programs note that these programs may discourage people from working, as people may be able to live reasonably well on government benefits rather than having to hold a job. As a result, families may slip into generational poverty, as the children may grow up feeling entitled to government support.
While it is a different economic system, many people confuse socialism with communism. Under communism, everything is owned communally, or by everyone. Ideally, there is no government or class division, and no money; each person contributes to society as best as he or she is able, and takes from that society only what he or she needs. The decisions made by that society are supposed to benefit the people as a whole, not any individual.
Historically, countries that have been called “communist” actually practiced some form of socialism, usually run by one political party. The state typically owned all forms of production and practiced very strict central planning — meaning that the government decided how all resources were to be used. Many critics argue that most governments that are called “communist” are really very different from the word’s true meaning.
Mixed Economies
Very few societies are purely capitalist or purely socialist, although most are more strongly one than the other. The United States, for example, is considered to be a capitalist society, but the Social Security system, which provides support for people who are unable to work, is socialistic. Sweden is considered by some people to be a socialist country because of its high tax rate and large welfare system, but the majority of industry in the nation is in private hands, which is capitalistic.
Critiques
The criticisms of both capitalism and socialism largely stem from different opinions about how economic forces should shape governments and societies. Some critics believe that the human spirit needs competition to fully develop, while others emphasize the need for people to cooperate with each other, ensuring that the needs of all citizens are met. Within each philosophy, there are additional critics who disagree about how each economic or political system would work best.
Critics of capitalism note that the marketplace can be unstable, presenting real dangers to the well-being of those who are not wealthy or who are otherwise vulnerable. Giving business owners free rein to set the terms of employment and to keep most of the profits from their enterprises to themselves, can establish a wealthy class which, in turn, can suppress the freedom of others. These critics also note that a purely capitalist society does not address the needs of those who are truly unable to compete either as business owners or as laborers. Without some social support systems, such as Social Security or welfare, those who cannot work or earn enough money to survive must lead a precarious existence, and may be forced to rely on family or private charity for support.
Those who criticize socialism observe that heavy taxation to provide equal social services for all citizens can discourage business owners from innovation and excellence, given that the owner won’t personally profit from his or her efforts. In addition, when the government plans the economy, some critics question whether officials and their policy advisors really understand what is best for a country’s citizens; such socialist governments may give their citizen’s no choice in deciding what kinds of services they really want or need. In addition, capitalist critiques of generous socialist social welfare programs note that these programs may discourage people from working, as people may be able to live reasonably well on government benefits rather than having to hold a job. As a result, families may slip into generational poverty, as the children may grow up feeling entitled to government support.