Socialism Vs. Capitalism

I’m sure we’ve all heard the terms ‘Socialism’ and ‘Capitalism’ before, but I find that people are often misinformed as to what they truly implement. The term socialism has often been used by so many fascist governments, that many people often tend to equate socialism to mean the same thing as fascism. I also find that many people overlook the faults of capitalism; rather, they argue that it is better system over socialism simply by the fact that implementing socialism would also mean implementing a totalitarian rule (which is utter nonsense).

Capitalism talks about the employment of a laissez-faire economy. To explain capitalism, we need to break down society into three main elements: the industry, the government and the common public. An industry is the aggregate of companies that manufacture products or services of a common output. (Wait, what?) Well, for example: Ubisoft, Activision and Nintendo are a part of the videogame industry. Exxon Mobil, Shell and BP are a part of the oil industry. So on and so forth; I think you get the idea.

Capitalism supporters claim that the companies that produce the best product with respect to their industry, get the most stake of the market. (Why you making no sense?) What I mean to say is, suppose you own a bakery and your friend opens a bakery right next to yours (et tu brute?!) and this friend is making more money than you (Damn that son of a $<&%*!!!), it’s probably because the pastries he’s selling are better than yours. (Screw you, @*%&>?/-^$!!!)

So according to this theory, due to competition, only the companies producing the best product survive. They have to constantly keep churning out the best, otherwise another company might come and replace them. So when you look at in this way, everyone seems to be winning. (What winning? My bakery went into foreclosure.)

For consumer goods, I think this is the best system to be implemented but here’s the main problem I have with capitalism.

On September of 2015, a certain man named Martin Shkreli, CEO of Turing Pharmaceuticals, decided to buy a drug called Daraprim (often used to treat patients suffering from cancer and HIV), and he decided to raise its price. Before the price hike, a dose cost $13.50. After the hike, the price went to $750 per dose. He then went on to say “If there was a company that was selling an Aston Martin at the price of a bicycle, and we buy that company and we ask to charge Toyota prices, I don’t think that that should be a crime.” People ended up dubbing Shkreli as “The most hated man in America”.

Let’s take a look at what he did here, he bought a drug that many people needed and raised it by 5,556%. The system that allowed him to do this was capitalism. Now, the FBI did arrest him on securities fraud (which is another thing all together) and he was replaced as CEO but these are just consolations. The problem is, according to a capitalist economy, the raising of prices is all legal and no one could do anything about it.

I’d just like to point out that this thought pattern is institutionalized within many industries. Grab a hold of something people need and overcharge them for it. Take education for example; just look at private colleges and see how much they charge. They know you need some sort of qualification to make your way in life and thus extort you for it.

The goal of capitalism is to achieve a balance between the industry and the common people. The industry give the common people a product or service they want and in return, they get money. If a company doesn’t provide a product that meets the standards of the common people, it can’t make money and must eventually close down. This is the balance. This balance is thrown out when the government decides to involve itself.

In 2009, an American automobile company, GM, entered bankruptcy. The government spent billions of dollars to keep the company afloat. I agree that if the company had to foreclose, many people would’ve lost their jobs but in that same year, Toyota was picking up. It became the best car manufacturer in USA. The hole left by GM would’ve been taken up by another company and these people would’ve been hired there. The entire system of capitalism works on the principle that if you supply a bad product you will fail, not if you supply a bad product the government will give you money to compensate your losses.

Let’s forget about the intricacies. Let’s look at the morality behind this. Suppose you have a giant bakery chain that employs thousands of people (Woohoo!) and suppose your product sucks (Again?!). You’re company is in bankruptcy so the government decides to give you funds. (Now that’s what I’m talking about). Your friend has a smalltime bakery. It’s not a chain of stores. (Haha! Looser!) If you had foreclosed, he’d have gotten more business. Now that the government bailed you out, he doesn’t get his opportunity. And you, with a worse product, are still on top.

Let’s look at this from another perspective. The money the government is providing to the big companies, is basically money from the people. The common public is basically giving money to bail out the big companies and then they must further pay the big companies to buy their crappy products. In what twisted ideology does this seem fair?

The first thing that comes into my mind when I think about capitalism is that it seems to have an absence of morality. The industry can overprice products and services that are basic essentials for the common public and the people are forced to pay up. Also, with the involvement of the government, the entire foundation of the system is bypassed.

If you really want to know more about the faults of capitalism, I suggest reading the works of Karl Marx. His works are notorious for scrutinizing the faults of capitalism.

What I like about socialism is that it has a moral foundation. Socialism tries to put everyone on the same playing field. For example, in America, the best colleges are extremely expensive. So those who are born into a rich family have a better chance of going to a good college. In Germany, a college education is free. Thus it removes the economic status of an individual from being a factor for higher education. Your talent and skill are what drive you to the top.

Let’s take healthcare, suppose you’re old and have cancer. With government funded health care, you will get treated. If healthcare follows a capitalist structure, it would be much more Darwinian. The rich get treatment, the poor die due to the lack of treatment.

Now another claim arises here. Capitalists say that because there are no companies involved, there is no need to be the best in the industry. This effectively dries up the motivation factor behind research. I personally think that this problem can be circumvented. For example, hire two teams of research and give bonuses to the team that does better work. History has showed that this was effective before. (This technique is what Oppenheimer used to develop the atom bomb).

I think the best system would be a blend of the two. I say that we have to identify the basic needs of an individual (food, water, shelter, education, healthcare, etc.) and make sure that everyone gets these basic needs through socialist means. However, an individual has wants along with needs and everything falling in the other category should be delivered through a capitalist economy. Again, this is just my opinion.