There are various types of economic systems that countries around the world use to run their governments. Capitalism and Socialism are two of the most common political, economic, and social systems amalgamated by the countries. United States economy is capitalism. In practice, not a country strictly driven by capitalism. As the rage and distaste against capitalism are on the rise in America, especially among the youth, for many Americans the word “Socialism” means a system with poor work ethics, obstruction to innovation and entrepreneurship, and excessive control and regulation by the government.
This schism between the two has created a large divide between the populations. According to the Pew Research Center, more than one-third of the Americans have a negative view of capitalism and around 42% have a positive view of socialism. To find out what’s behind these opinions first we have to know more about what capitalism and socialism are and how they affect the economy of America.
Capitalism and Socialism are often classified as opposites of each other. Capitalism is based on the means of production. Private individuals own the resources. They run the capitalist economy. They own and operate private companies. Individuals who own the company make the necessary decisions over the use of resources.
There is no such thing as perfect capitalism. Companies that incorporate are treated by the same laws as individuals. Performing anything that an individual can. Corporations can sue and be sued. Striving for the maximum profit, all the companies aim to become large and maximize their shareholder wealth. The government tries to ensure level playing field for private companies. The government applies rules and regulations depending on the potential for abuse in any sector.
Capitalism embraced by America has generated vast amounts of wealth. A country where the majority of the wealth is in the hands of very few people. Many others get left behind. The USA is a capitalist system where the economy boasts healthy competition, efficiency and optimal allocation of resources. Alas, the reality tells something else. It took America almost 6 years to recover from the 2008 stock market crash and millions of people lost their jobs, properties, and their belongings.
America saw the rise of capitalism in the early 1900s with the massive growth of industrialization. Manufacturing and railroads took the forefront, leaving agriculture in its trails. The United States slowly became the most desirable place to go and do business along with new financial industries only increasing the wealth of a select group of people. This created an unequal distribution of wealth among the rich and the poor where the rich people get richer while the poor get poorer. Most of the lower working class work for minimum wage. Sometimes seen doing multiple jobs just to cover their basic needs.
The health care system was built to benefit the insurance and pharmaceutical industries. While it cannot be denied that the pharmaceutical industry have been responsible for the major advances in the medical field. And, treatment of diseases. Benefits not easily accessed by all of the population due to the imposition of high prices. These industries lack strong regulation by a strong government. There are not that many healthcare programs that help the people those in need of medical attention and only a few people usually get access to them.
More than 48% of the population that has medical coverage is only because they have a private health insurance plan. Most health care, even if publicly financed. Is delivered privately. The sky-high costs of quality medical service make it inaccessible for the majority of the population. People in America buy their houses via mortgage loans. Sometimes the payments are so high that often people have look for loans just to clear the payments. Why socialism is hated by capitalists.
This in turn gives rise to the mortgage industry where the banks can and sometimes do foreclose the houses when someone fails to pay. The government provided programs often fail to assist those who are not wealthy enough to get their houses as the programs come with a lot of restrictions and many other complex requirements that ultimately end in taking debts.
In contrast with the capitalist system, the socialist system entrusts the responsibility of running the economy on the government. Instead of giving free reins to private companies or individuals. Under this system, everyone works for wealth. Distributed to everyone. Unlike capitalism where where you work for your wealth. Socialism accounts for individual and social needs. Central planning allocates resources. Greater social needs include better transportation systems, education, healthcare, and others such as the preservation of natural resources.
Everyone in society receives a portion of the production based on how much everyone contributed. This motivates them to work for extended periods if they want to. Workers receive their share of production less a percentage deduction. The collective well-being of the community. Is valued more than an individual. The government distributes resources equally rather than giving more control to individuals which in turn gives more control to the government over the citizens.
Socialism may look like a perfect system on paper but it does have a lot of holes when it is in effect. Venezuela is a prime example of a failed socialist system. Socialism kills entrepreneurship and innovation. It undermines the people’s initiatives and works ethics which makes the people heavily dependent on the government. Why socialism is hated by capitalists.
Even with all the cons of socialism and having a strong economy, many young Americans are struggling to make ends meet and blaming it on the current capitalist system. That is because the salaries aren’t enough to cover the basic need and necessities. A 2018 survey by Bankrate showed that over 40% of Americans have some kind of a secondary job. This number 51% amongst the millennials. On top of that, many of the young who are entering their professional lives are far less likely to earn more or equal that their parents earned.
Most of the young employees don’t receive any kind of pension or post-employment benefits like their predecessors used to get. This is especially affecting them greatly as the healthcare and housing expenses are sky-high. According to Gallup, young citizens have more interest in socialism whereas older Americans have more faith in capitalism. Of those between 30 and 49 years old, 58 percent have a positive view of capitalism and 41 percent have a positive view of socialism. Of those aged 50 to 64, 60 percent have a positive view of capitalism and 30 percent have a positive view of socialism.
The current economic situation is creating a mindset among the young Americans in which they are looking at socialism as a better system for them. According to Gallup, ‘Whether the appeal of socialism to young adults is a standard function of idealism. The concept dissipates as one grows older. This political belief held by millennials.
Millennials have had their credibility of economic liberalism eroded by the formative years of adulthood. The youths have had their faiths weakened in markets by the financial crisis and recession. Exposed deep levels of inequality alerted many young people to the fact that their futures were likely to be far less bright than their parents’ were.
While the American economy is a capitalistic one, there are also certain elements of socialism in which the government acts to ensure the welfare of Americans. For example, the social security system is one of the primary ones that can be shed light upon. This system is responsible for making a payment to American workers after they retire.
The unemployed receive unemployment benefits. Provided to them from withheld funds. Even with all these aspects, the economy is majorly a capitalistic one and the young Americans are looking for a change through implementing a socialistic economy. This is why Americans who are under 30 are preferring Bernie Sanders for his socialist beliefs.
Capitalism does have its flaws as no system is perfect. But there is no denying that America has reached where it is now because of capitalism. Capitalism ensures intellectual freedom and private entrepreneurship which in turn gives the people freedom of choice. The apparent equality theorized by socialism is very hard to achieve and many countries have failed throughout history.
This is why many Americans are still looking at capitalism as the ideal economy system for the country and dismissing socialism as a solution to get rid of the current economic crisis. Whether socialism solves the issue or not. Till now no candidate for socialism has yet to arrive to the White House to establish it. Socialism has work for our highways, public schools, fire departments and social security. Why not health care?
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