Category: Economics
Socialism Essay on Economics

Socialism is an ideology of political nature in which the wealth of a nation is evenly spread across the population so that everyone is presented with an equal opportunity as they operate. The notion behind the ideology is that in any society where individuals live, there is a need for them to embrace a common ownership of the possession that is at their disposal. All that is required in this case is the consideration of other people who may be less fortunate or the poor in the society so that their lives can be uplifted together with others. This situation and operation, however, may not make sense in real life due to the facts that some goods appear more personal than others and hence may not be shared as per the view of the socialists. Common ownership, as brought out by socialists, means that individuals may participate in the decision-making process of global resources without any hindrance.

This kind of ideology is based on the left wing values of the economy. In this case, the rich of the state are taxed more so that they can cater to the needs of the poor and vulnerable in the society. For example, in 1885-1886, Ronald Regent also raised tax on the wealthy in America, but he only came up with 700m in 85’ and 600m in 86’. This was hardly enough to pay off the country debt. For this reason, the wealthy moved their money and estate out of the country. In this case, there is a belief that all people are equal, a concept that is called egalitarianism. Based on this understanding people, are presented with equal opportunities so that their lives can be smooth and upgraded as required by the various needs of the people.  Socialists thus have an equal opportunity of reformation as well as revolution while Marxism is based purely on revolutions.

Get a Price Quote
Title of your paper
Type of service
Type of your assignment
Academic Level
Number of pages
1st time order 15% OFF

In the societies which are socialistic in nature, the government seems to have control of all things including the service provision as well as the industry control and in the process, any profits gained out of the operations of the governments goes back to the country to help all the citizens equally. As was evident during our lectures, social democracy is results from the actions of socialists who believe that the government shouldn’t be interfere with… and they want a mix economy. The ideology holds that the government need to not to have lots of control over business; they are conservatives!!. This nationalization process took place within the health sector of the UK in 1948 by the then socialist government. Under this scheme, all the citizens were provided with free health care; hence, the government was referred to as the big government since it provided the most critical services and industrial control. Different from capitalism, where competition is the way out hence no one care for the other, socialists considers all people.

Feasibility of Socialism in the Past and Currently

In many countries like the West, socialism has been failing while capitalism, which is completely the opposite, has been thriving well. To explain the failure of the socialism in various governments and setups, there is a need to take into consideration the concepts of price, profits, and losses, and rights of private property. Its failure is traced from the facts that there is the neglect of some areas. The first reason why socialism has never been successful in many countries is due to the prices of commodities which are artificial. This is because the system upholds price controls hence the information content of prices is distorted before it can be used in the market operations for the betterment of such markets. The controlled prices in an economy can either be too high or too low; hence, resulting into cases of shortages or surpluses. Since, this is the only way through which stakeholders create incentives, it becomes the cause of crash in a socialist economy. Social democracy is thus a less radical, less liberal form of socialism.

Our Process

The price in an economy is the guide to the economic activity and it does this in a way that cannot easily be understood by many since they hardly see the importance of the same. It is the price that provides incentives necessary for efficiency in the promotion of any economy. A case example is what took place with the OPEC in the 1970s when the prices of oil hiked suddenly due to the restriction of the supply of oil by the cartels. The effect is what communicated information to the sellers and buyers. Consumers reacted by changing dramatically their consumption due to the high prices. The end result was to explore more alternatives sources of energy and fuel. Such controls in prices of commodities in an economy in terms of prices are what have been making the socialism to fail.

Secondly, socialism has not been in a position to work perfectly in many cases due to the fact that the system has failed to work under competitive market, where there are profits and losses. In a profit system, monitoring mechanisms are put in place for performance evaluation of businesses. In this case, it is only those firms that meet the needs of the public that end up experiencing profits as the only reward. Those firms that do not meet the public interest end up making losses and this is what socialism approach does not put into consideration. This notion was also explored in our lectures. We noted that in the minds of socialist society, competition is indeed a way of becoming greedy so countries which are socialists’ hardly promote such kind of operation in the markets.

Moreover, under the central planning approach, in which profit and loss do not apply, that is to say, socialistic system, there is no action for firms which do not meet the threshold of the society in terms of services that they provide. In this kind of operation, there is no proper way of determining the services to be expanded based on their success levels or those to be contracted due to failures. It is this lack of competition in the marketplace that makes such economies become ineffective in their performance. That is, the system lacks the needed incentives to influence the economic activity. The end result is a cycle of poverty as well as misery that encroaches slowly into the society.

Moreover, the fact that the socialists have disregarded the role of the rights of the private property has led to stagnation. Instead, it promotes public ownership, leading to neglect and mismanagement in the economy. Normally, this property of private rights is what creates the incentives for responsible use property as well as conservation of national resources. Denying private practitioners the opportunity to practice freely in an economy takes away competition. Unfortunately, it is competition, as witnessed in a free market economy that is a good ingredient for high quality services and goods since it discourages monopoly. According to Edman Burke, the grandfather of the conservative’s economy, there should not be government involvement in people freedom. He said there should not be any monopoly in economy.

Lastly, without the above-mentioned causes of stagnation in socialism, socialist economies wither with time. Socialists in France, at first called themselves Utopians then turned to socialist. In most cases, there is no enough natural resource that can ensure that a country is compensated due to its lack of proper incentives in the working of the economy. For example, though Russia is considered to be the wealthiest economy, it still has people who are very poor. In fact, this is why the country’s growth as a supper power has diminished with time. This is due to the fact that such resources are always unlimited hence cannot be used by all repeatedly without depletion.  There is thus the need for incentives for conservation of such resources so that they can be used over and over again. The lack of incentives by socialists, therefore, tends to deprive humanity an opportunity to develop. This is why Russia is still considered poor despite the natural resources that are at the country’s disposal. In fact, by the fact that socialism has failed, the renaissance of liberty and freedom has been inspired worldwide and even such countries as Russia may be forced to change their policies with time.

Socialism and Democracies in Countries

Democratic control of countries is essential in shaping and bringing out the meaning of socialism. In this approach, the production of goods and services is majorly done with a view to meeting the needs of the people. In such kind of setup, there is little or no buying or selling but instead, what has been produced communally is shared out freely. This is the basis of socialism approach; hence, there should be the determination of the need of the people, which will usher in the concept of democratic space that is required. Under democratic space, this particular variation in the needs of the people would be determined right from the local to the global levels. The approach would eventually streamline the process of democratic participation of individuals so that each might get what they need in life.

In democratic socialism, there is a belief that both society and economy of a state should be democratically run so that the needs of the public can be easily met. That is, it is not done with a view to making profits of any nature but ensuring that the needs of the public are met. Foe this change to be possible, there is a need for the radical transformation of the government structures as well as those of the economy. It requires promotion of democracy to enable people operate and participate in decision making on issues that affect them. In fact, socialism and democracy must not be separated since they go hand in hand. Economic democracy promotes a continuous dialog and balance between all economic forces, between labor and management, labor unions. It also promotes an alliance between managers and workers, managers and CEOs. It also promotes a mix economy.The existence of the democracy brings with itself socialism and this is the trend taken by most governments currently as is the case with America through its Medicare program. Though the U.S is seen to a capitalist nation, Obama’s outgoing government has tried to bring in the aspect of communality in their governance. Therefore, social democracy is a less radical and less liberal form of socialism.

Currently, there are no models for the democratic socialism, an indication that no country has fully had an institution of democratic socialism. It is only the socialist parties and labor movements that have so far been pushing for the models to help improve the situation in socialist perceived countries. A part from the Unites States, countries like Sweden and Canada have also been employing some traces of democratic socialism approach in their governments. All these three have implemented the democratic space in the health care sectors by providing medication services free of charge. Look at the case of Britain, the labor party created the National Health Service to people, but the labor party was too socialist for some people. This was brought about by the involvement of the community to determine what they need from the government, which is having power over all things including resources. However, without proper policy to ensure that such efforts by the government are sustainable, they end up collapsing whenever new leaders come into power.  

Our Benefits

The social democratic experiments which have been undertaken so far have failed. Social democracy can still promote a balance on behave of the government and the private sector. Many of these happened in the Northern Europe where there were tremendous prosperity and economic equality of some given degree. In these nations, there was the use of the wealth of the nation for providing high living standards for all the citizens. Such services that were provided included high wage rates, improved health care and subsidized education. This is contributed to by the competition that is emanating from the low developed countries where the labor market is low in terms of wages.

The case of American tries to bring people together, and this is why there has been only two-party democracy in the nation and many have been working with the democrats so that the left wing government can be strengthened. It is clear that the system of the elections of the United States of America hurts the third party due to the fact that they operate under the presidential system where the winning president has it all. This locks the others out since it is either a loss or a win. Moreover, there is the monopoly of the political powers due to the two-party system. Though not through total influence, it seems all these present cases of socialists approach call for the need for competition to be influenced for development to be realized.

In conclusion, the concept of socialism has been misunderstood for a very long time. First, at the mention of the word socialist, there is the essence of pride that comes in. In fact, most of the instances where it has been used, people get out of the system’s context. On the other side, the conservatives use the word socialists like a mockery to those who considers free operation especially with the factors of production. It is important to note that socialism has been tried in a number of countries and failed simply due to the depletion of the factors of production where there is no or little competition in an economy of a country. Finally, with the issue of socialism being given such much weight, there is need for its workability to be investigated.  

Related essays