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Is there still any conflict between capitalism and other economic ideologies (Communism, socialism, social capitalism)?

Capitalism is a type of economic ideology that often carries a broad definition in business. It can be regarded as the economic system that allows individuals to possess economic resources and also to make critical decisions about their business interests. It may also be referred to as the laissez-fair economy because it provides business owners with an opportunity to produce goods and services and to keep the achieved profits to themselves. The free market economy was first developed by Adam Smith, who reviewed the effects of supply and demand in a country’s economy. It is worth noting that capitalism permits business owners to make critical decisions regarding the welfare of their businesses (MOMOH, 2019). Their choices are influenced by the rule of law set within the country’s border, which offers protection to the rights and freedoms of individuals to make use of economic resources. The main benefit of a capitalist economy is that it leads to stiff competition, which significantly improves the quality and quantity of consumer goods and services. However, there still exists a conflict between the capitalism economy and the other economic ideologies such as socialism and communism.

One of the first conflicts exists between capitalism and socialism economic ideologies. The fundamental distinction between these two is that of government intervention. In the real world scenario, the economies of most nations fall between capitalism and socialism/ communism. Capitalist economies focus on a free- market condition that assists in fostering innovation, create wealth, and also regulate corporate behavior (MOMOH, 2019). As a result of the liberalization of the market forces, it promotes freedom of choice that either leads to success or failure.

On the other hand, the socialist- based economy relies on centralized economic planning that helps in encouraging equality of opportunity, conformity, and economic outcome. The socialism economy is characterized by state-based business services that depend on central planning, intending to make the society to be more equitable. Capitalism is a free market- a driven economy that does not permit government intervention, and this makes the market to shape the society and life of the nation. To maintain a balance between these conflicts, most countries prefer having mixed economies where the government intervenes in the economy to control a monopolistic stance, and both individuals and the government own the resources.

There exists a conflict between capitalism and communism that is based on the increased gap between the rich and the poor. As Karl Max studied the economic models, he was outraged by the fact that the communism economic system drastically widened the gap between the rich and the poor. He noted this type of economy led to the exploitation of workers, and this eventually results in unfair treatment of the poor (UShistory.org, 2019). According to Max, the economic system was established to correct the issues caused by capitalism and relies on the principle that private ownership of property should be abolished. Restricting private ownership would translate to greed and would eventually knock people out of the competition without considering the associated consequences. The people must control the economy and share property while the government should exercise in managing the transition between capitalism and communism.

There is also conflict between the classical and social capitalism. Being a socially-minded form of capitalism, social capitalism is involved in making social improvements. It does not engage in any accumulating capital as it occurs in the classic capitalist sense. Social capital is not privately owned, and it is difficult for it to be involved in trading or readily exchanged for economic outcomes. The economic system focuses on solving social issues based on equality, liberty, and justice when making a profit (Claridge, 2020). The non- profit organizations are involved in the efforts of solving environmental issues and redirect profit back to the public good. The investment companies are socially and environmentally responsible and actively take part in sharing information about ethical companies as a way of encouraging others to engage in such activities.

References

Claridge, T. (2020, February 29). Social Capitalism and Social Capital – Definitions and Discussion. Retrieved from https://www.socialcapitalresearch.com/social-capitalism/

MOMOH, O. (2019, July 30). Capitalism vs. Socialism: What is the Difference? Retrieved from https://www.investopedia.com/ask/answers/020915/what-are-differences-between-capitalism-and-socialism.asp

UShistory.org. (2019). Comparing Economic Systems [ushistory.org]. Retrieved from https://www.ushistory.org/gov/13b.asp

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Submission date: 22-Mar-2020 11:37AM (UTC-0500)
Submission ID: 1279690747
File name: Reflection_Paper x (18.54K)
Word count: 740
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