Dec 24, 2013

WAT – Essay on Socialism and Capitalism

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Topic: The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.



The above quote is credited to Winston Churchill, the man who led Great Britain during the Second World War, and who was admired and praised, especially for his oratory and statesmanship, by all great men of his time. Churchill, a vehement critic of Socialism and Communism all his life, sarcastically points out, in this quote, the fundamental difference between Socialism and Communism.


Socialism, with its inherent belief of equal distribution of wealth, is a theory that developed gradually, as a response to capitalism; and, once upon a time, had many adherents in Europe and Asia. While socialism encourages state ownership of means of production and co-operative management of economy, capitalism believes in private ownership of trade and industry. Both the forms of economic system have been experimented in Europe, for a long time; and in some other countries, occasionally. Socialism miserably failed in Soviet Union, Eastern European countries and in China (The success that China right now enjoys has been made possible only because it opened the doors of liberalisation); and could achieve little in pre-liberalisation India. Capitalism, on the other hand, has, time and again, done remarkably well in the US and Western Europe. The Anglo-Saxon form of capitalism has withstood two major financial crises (The Great Depression of 1929 and The Financial meltdown of 2008) and yet the world’s faith in capitalistic form of economy is as firm as ever.


Since capitalism endorses private ownership of wealth, it is always an incentive for innovation and development. It spurs competition, accelerates technological development and empowers consumers. The most technologically backward countries are those where there is state ownership of means of production, leading to low levels of prosperity and high levels of corruption. Moreover, Socialism’s belief in equal sharing of wealth offers little or no incentive for hard work; as a result, there is poor generation of surplus and that eventually leads to little no profit, and hence, in Churchill’s words, the only thing that people are left with to share is misery. The socialist countries’ efforts towards equal sharing of wealth result in the reduction of national incomes and therefore average income. It further leads to low levels of prosperity and well-being.


The lofty and noble aim of equal distribution of wealth cannot be achieved without state ownership of industry and trade, and complete ownership of industry of trade brings with itself unlimited, unrestrained and absolute power. In other words, road to socialism is the road the absolute power, which will inadvertently lead to totalitarianism, fascism and sometimes even tyranny.


Though Capitalism may result in an unequal sharing of wealth, by democratic means, it is always possible for the state to create an environment of competition wherein the market is open to all players; and through innovation and hard work one can create wealth and lay the foundations of a better tomorrow.


Thus Winston Churchill’s quote is justified not only by inherent principles of human nature but also by 100 years of economic development all over the world.

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