Since the global economic crisis started in 2008, people began thinking of ways to bridge the widening wealth gap within and among nations. As capitalism becomes unpopular, talks about renewed interests in socialism start to surface.
Socialism can be defined in two ways. First, it is an economic system which centers on common ownership. In this system, the government mandates production and prices. Also, private ownership of property is not allowed. Equality is significant for socialists that distribution of wealth and production belongs to the community. Moreover, production is done for use unlike capitalism wherein production is for profit. Second, socialism is a political system with a classless society where there are equal power relationships among people.
While some groups are considering the establishment of a socialist world, there are also other groups opposing the socialist idea. To have a better understanding on this contentious topic, here are the views of the two opposing sides:
List of Pros of Socialism
1. Every citizen will have access to education and health care.
According to proponents, two major problems of nations practicing capitalism are the high costs of health care as well as education. Because of these, there are countries with high rates of illiteracy and many are not able to continue their education. Also, people who cannot afford health care are not given the medical attention they need.
In a socialist society, education is available for everybody and people will be able to meet their medical needs because health care costs will be more affordable. With the government owning hospitals and health care facilities, medicines and medical services are relatively low in costs if not totally free.
2. It results to a classless society.
Socialists believe that equality among people is important, including social class. By making people equal to each other, the gap between the rich and the poor will be bridged. Opportunities are handed to members of the community regardless of race, color, age and gender.
3. It allows for balance in wealth and earnings.
With the government in control and owning most of the industries like housing, utility companies, poor members of society are given access to basic services which they will not be able to if establishments and industries are privately owned. On the other hand, when it comes to taxes, there is progressive taxation in a socialist society. This means that the higher the income, the higher the taxes. With this taxation system, it will be easier for low income employees to budget their earnings and while those who earn more and pay higher taxes will still have enough left to spend.
4. It eradicates monopolies in corporations.
In a capitalist nation, companies are owned privately unlike in a socialist country where the government monitors, controls and owns companies that offer services like transportation and medical institutions, where money spent come from taxes. This way, prices are regulated and made affordable for the people unlike in capitalism where private business owners and suppliers can demand high prices for their goods and services.
List of Cons of Socialism
1. It gives the government much if not full control.
Critics of socialism argue that allowing the government to run people’s lives, including where to live, how much to earn and what health care is given to them is not good. It is unfair to the people since they have no say on these things. With the state on top of things, citizens have lesser options especially on services and commodities.
2. It demands higher taxes.
Proponents, especially those who with white collar jobs, are complaining about costly tax payments since the government has to impose these taxes be able to subsidize services offered to the public for free or at lower costs.
3. The rights of workers might be too much.
With unions and workers’ councils having more power in businesses, critics are concerned this can give them too much authority that workers will demand over-the-limit wages. If this happens, employers will be reluctant to hire people while unproductive employees will be retained. For opponents, this will result to economic failure and unemployment.
4. People have to deal with bureaucracy.
Groups who are not in favor of a socialist society claim that with state-run services, there is too much bureaucracy which only makes it difficult for people to get services fast. With standard operating procedures to follow and the long processes people of the community have to go through just to get basic services, the citizens are being deprived of immediate assistance.
5. It can result to lack of motivation.
People who are against socialism say that by making people’s lives comfortable and providing free services, they might not be driven to work harder and dream of improving their lives. Business owners, on the other hand, will not be motivated to open new businesses while innovative people will not be inspired to invent new things because for them, nothing will change and they will remain stuck.
6. It can result to unnecessary spending by the government.
Some groups point out that since the government in a socialist setting has the power to spend on services for the general public using taxpayer’s money, this can result to too much spending which can lead to poor economy. With the state having the authority to subsidize projects it chooses, this can result to irresponsible spending and inflation.
Socialism exists to bring about equality to a nation and to push for a classless society. In some aspects, it has benefits but the fact still remains, not all are happy with the idea. Just like in any form of government, there are good and bad sides. Absolute socialism might be too much although democratic socialism can work. Will it be a good thing to bring it back again when the nation is in an economic crisis? The people and the government should weigh its pros and cons beforehand and look at how it has affected nations in the past years.
Natalie Regoli, Esq. is the author of this post and the editor-in-chief of our blog. She received her B.A. in Economics from the University of Washington and her Masters in Law from The University of Texas School of Law. In addition to being a seasoned writer, Natalie has almost two decades of experience as a lawyer and banker. If you would like to reach out to contact Natalie, then go here to send her a message.