In lieu of the current economic crisis, why should we allow capitalism in any form? Why should we not reject capitalism altogether and embrace socialism? What is there left to say in defense of capitalism?
The current economic global crisis in this age of capitalism has raised many questions on whether it is time to change our economic policies. Economic laws have proved difficultWe will write a custom Moral Issues in Business specifically for you
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to evaluate the causes of certain phenomena of markets separately (Einstein, 2000). Einstein, though not an economist, perceived that socialism had a social ethical result (2000). Capitalism is the socio-economic system found in most countries while socialism is slowly dying out. It is time that we understand the depths of socialism and capitalism and try to incorporate the good in both in a new economic system which finds better acceptability among the global population. Socialists involved the “public ownership” of economic resources (Moore and Walter, 2006). The population was involved in the production, distribution and exchange of goods or services.
Community life, ownership and action being collective, the market economy was determined by the people. Capitalism was just the opposite. The capitalists consisting of a few people governed the production and distribution of goods. The land sales and purchases, running of factories, technology development and the transport system were also managed by them. The working class on the other side was selling their ability for a salary.
The people in the working class were paid to produce the goods which were then sold for a profit for the capitalists. Services were also managed in this manner. Here exploitation of the working class is the main feature. This is not a good practice as it involves social advantages for a handful of people who reaped the profits at the hands of many others who were sweating it out. The profits were then re-invested for further profits for the capitalist class. The capital became concentrated in a few capitalist hands due to competition among the capitalists and their capacity to adopt the latest technologies (Einstein, 2000). Larger units of production were set up and more division of labor established. It was difficult for the most democratic government to control this as they needed the goodwill of these private capitalists for their political survival. The common electorate became alienated from the legislators and thereby had difficulty in soliciting the power and might of the politicians for their purposes (Einstein, 2000). The underprivileged section became totally unprotected. Even the press, radio and education facilities were controlled by the few capitalists.
Capitalism is classified into two. Satisfaction of people’s needs is not the aim behind the production: selling for a profit is. This holding of private capital and the free labor contract characterize capitalism. The costs of goods are decided by the capitalist class which bases its decision merely on the factor of profit and not the customer’s satisfaction. Human needs may be met with but the cost may not allow many people in the working class to purchase for want of sufficient money. Competition among the capitalists forces them to keep hiking their prices to make their profit. The world’s problems can be traced to the profit motive. The race to make profit has led to starvation, war, alienation and crime. Capitalism is believed to have a free market economy usually. Theoretically however there can exist a free market economy which is not capitalist. This involves the trading between the various working sections like the farmers, artisans and shopkeepers who would exchange their goods for money among themselves. Profit-making or class division will not be seen. Exchange would be for mutual benefit. Such an economy is not yet heard of though. It is a good proposition to investigate this economic idea.
Capitalism does have a number of shortfalls which make it unacceptable to the working class especially. However it cannot be totally abolished. Unemployment is a drawback of capitalism (Einstein, 2000). Unemployed people and ill-paid workers do not contribute to the profitable market. Moreover innovative technologies using latest machines or gadgets further hike the unemployment. Instability of the economy results from the profit motive and competition among the capitalists. This leads to unstable accumulation of capital and its utilization and severe depressions in the economy (Einstein, 2000). Capitalism may be kept in some form utilising to advantage the excess of money in some hands. Industry does not totally die down with a few capitalists around. Einstein believes that the education itself causes a crippling of individual consciousness whereby the young person is taught to endeavor for success. The competitive spirit is inculcated in him and it carries on in the same way for the rest of his life. An appropriate education system which aims for social goals is to be practiced to sculpt people and plan an economy similarly targeting social goals. Planning an economy which allows society to produce goods for utilization by itself is a strong move. Work will be distributed among all those who need the income. An education which allows every person to earn a living must be imparted. If socialism is to be fully established some socio-political problems must be solved. Transition requires clear aims and solutions to possible problems (Einstein, 2000).
Karl Marx first introduced socialism. Orwell has spoken of socialism as the only ideology for the future society (White, 2008). The basic values of socialism are liberty, fraternity and equality. Ethical socialism is perceived to be related to Marxism. In the Communist Manifesto, Marx and Engels have their own theory of scientific socialism or communism (White, 2008). They picturise all socialism as reactionary. Three different forms have been distinguished: reactionary, bourgeois, and Utopian. Socialism is considered as inevitable and ethics is not in the picture. As socialism is the biggest evidence of freedom, justice and equality, the question of whether socialism is ethically necessary arises. Revolutionary violence was inevitable as those in power declined to relinquish power (White, 2008). White has commented that socialism acquired through democratic means has a greater chance of preserving freedom when compared to socialism which was imposed forcibly (2008). An ethical bridge can be built between working people depending on their decency or their moral traditions. The freedom of voting, of getting a job and of worshipping all come under the banner of individual liberty; but Marx and Engels believed that the autonomy and self –determination played bigger roles. True freedom implies not only that the person is free from interference and can take charge of his own life (White, 2008). Moral philosophers like Kant contended that all people were eligible for being respected; everyone’s needs and interests must be given due importance. Though some are physically stronger, they become vulnerable on occasion. Differences or inequalities that arise due to social differences are removed by socialism. Changes must be wrought to create a world with all human beings equal and everyone having the best of lives. Fraternity must provide the full support for the change. Capitalism on the other hand stresses on individual advancement with their own selfish projects. Socialism would enhance the feeling of belonging to a community. “Freedom without equality’ is equivalent to fraternity without liberty; both are flawed.Get your
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Socialism is acceptable as long as the aim is to overcome the excesses of capitalism; it can save the nation from the disasters of the financial tornado believed to have been caused by capitalism. However constructive results may not be achieved by socialism (Michaud, 2008). Michaud blames the excesses which led to the debacle on government excesses. Their lack of hindsight and incompetence had been the prime causes. John McCain blamed “Wall Street’s greed” while Michaud called it unregulated greed. Michaud found that the government denouncing all measures which were unacceptable to them as socialist ideas was the main reason behind the crisis. Paradoxically, the final bailing out of each major financial firm was socialist in idea (Michaud, 2008). Poor regulation of rules, lack of rules which did not cover new problems and lack of oversight were the real reasons. Though capitalism created all the problems, socialism eased out the situation.
Ethical socialism includes politics and writing. Orwell’s arguments for ethical socialism are commendable for moral necessities of socialism. One’s upbringing instills ideas that are inherited. It is difficult to relearn things after discarding ideas which are perceived wrong somewhere in life. Independent thinking and keeping a distance from the different ideologies can help make a transition from capitalism to socialism. Orwell found that humanizing socialism with the basic and simple values of life was found most in the poor working class (White, 2008).
Kant’s socialism had three approaches: Marxism, Classical Liberal and Welfare State Liberal. Marx has criticized his views, especially Kant’s opposing the revolution and the defending of property. Simply acquiring property was not full possession. Kant believed that justice was mutual external freedom (Dodson, 2003). He also recommended the providing of extensions of welfare state interventions. The aim was to eliminate the forcible economic arrangements. Humanity is an “unconditioned purposiveness” according to Kant with equality of opportunities to develop capabilities (Dodson, 2003).
State socialism is a political trend in Australia (Moore and Walter, 2006). State socialists are politicians and parliamentarians who work for the welfare of the state. Considering that the state is an agency for the people, efforts are made to distribute uniformly the services to the state population. The underprivileged are especially looked after by the State socialism. A regulated market economy was the setting made. Individual rights and not collective benefits were the aim. The state was the body which guaranteed the rights (Moore and Walter, 2006). Poverty, ill-health and education were state issues. History has caused the evolution of state socialism in Australia.
However at the beginning of the 20th century, new liberalism began to appear. Articles on the subject of state socialism have indicated the positive effects of state socialism that Australia had.
Dividing the whole country into smaller pockets of rule could allow a similar type of socialism to be instituted where individual rights had space.
The current economic crisis poses some questions about the significance of capitalism. As long as the government does not interfere with strict regulations, capitalism will show no corruption and no problem would arise even if incentives are not part of the human relationsWe will write a custom
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department and if information technology is not in an active or advanced state. The attempts to control economy by the government will reverse these situations but problems would arise. Allocation of resources would be effective and according to the consumers’ requirements. Firms ensure their efficiency and productivity to keep finances on the positive side. As the firms get incentives to be efficient they target the cutting of costs and increase of productivity in the highest priority. Consumer trends govern the firms’ response and efficiency. The current economic crisis had a difference in that large banks were part of it; many of them buckled under the pressure following their reluctance to divulge their deficits (Heinrich, 2008). Enormous losses were evident around April 2008. Leading capitalist countries showed a shift in capitalism; wealth distribution has shifted to the capitalists and high income individuals. Global financial markets have managed to contain the crisis now. Banks in America have regulated their lending capacity and private consumers have stepped down on their spending sprees. The weak dollar may make US exports more competitive (Heinrich, 2008a). Developing nations in Asia and Latin America have compensated the shortfall of America. Global capitalism is very competitive and multi polar. Capitalism will never be free of crises. The 21st century will be exhibiting more capitalism than socialism (Heinrich, 2008b). Capitalism shows ups and downs alternately resulting in a greater development of capitalism: the period of decline and the spurt helps capitalism to remain ensconced in the global picture. There is no danger to capitalism through the economic crisis as inclines and declines are part of it. Profit maximization is the idea behind the new capitalism. Heinrich has reported the capitalism in China and India as poverty capitalism (Heinrich, 2008b). China exploited the forces of labour and brought into the global market cheap competitive goods while India invested in education and provided an intelligent and highly qualified human capital which has become attracted by foreign prospects of employment and is taken up as cheap forces of labour by investors.
Basic Income and socialism
The principles of Liberal neutrality favor the basic income (Howard, 2005). More flexible labor markets and lesser full time employment have made the basic income facilitate the new trend. Marxism believes that the basic income exploits the workers. The basic income is a factor that should be included in any policy on employment. Further strategies may be added to keep in touch with the changing trends. The theory of justice has moral commitments to the priority of justice, notions of what makes a person, goods and other ideas which can be accepted or agreed upon by most people in spite of their differing views on what constitute a good life (Howard, 2006). A principle of toleration is to be incorporated in an atmosphere of conflicts.
The current global crisis may require a change of economic policies to suit the trends. Capitalism is the socio-economic system found in most countries while socialism is slowly dying out. It is time that we understand the depths of socialism and capitalism and try to incorporate the good in both in a new economic system which finds better acceptability among the global population. Capitalism does have a number of shortfalls which make it unacceptable to the working class especially. Socialism is the biggest evidence of freedom, justice and equality. Socialism acquired through democratic means has a greater chance of preserving freedom when compared to socialism which was imposed forcibly. Differences or inequalities that arise due to social differences are removed by socialism. Changes must be wrought to create a world with all human beings equal and everyone having the best of lives. Fraternity must provide the full support for the change. Capitalism stresses on individual advancement with their own selfish projects while socialism would enhance the feeling of belonging to a community. State socialism is a political trend in Australia. The state is an agency for the people; efforts are made to distribute uniformly the services to the state population and the underprivileged are especially looked after by the State socialism. Capitalism is here to stay in spite of the rise and fall in the global market.
Besser, Terry L. (2002). “The Conscience of Capitalism: Business Social Responsibility to Communities” Published by Praeger, Place of Publication: Westport, CT.
Carroll, Archie B. 1979. “A Three-Dimensional Conceptual Model of Corporate Performance.” Academy of Management Review 4(4):497-505.
Dodson, K.E. (2003).” Kant’s Socialism: A Philosophical Reconstruction”.
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Einstein, A. (2000). “Why Socialism?” Monthly Review, Vol. 52, Issue 1, p.36, Monthly Review Foundation Inc.
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Marx, Karl. Capital. Vol. 1. Trans. S. Moore and E. Aveling. New York: International Publishers, 1970.
Michaud, J.P. 2008. Financial Crisis? Socialism to the Rescue. Web.
Moore, Tom and Walter, James. (2006). “State Socialism in Australian Political Thought: A Reconsideration” The Australian Journal of Politics and History, Vol. 52, 2006.
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