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Debate: Capitalism vs socialism

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Which is the superior system, capitalism or socialism?

Background and context

Capitalism is the world’s dominant economic system. Within it, the means of production and distribution are owned by individuals: private ownership and free enterprise are believed to lead to more efficiency, lower prices, better products and rising prosperity. Socialism advocates the ownership and control of the means of production and industry by the community as a whole: the community is believed to be both more just and more efficient through central planning. In Marxist theory Socialism represents the stage following capitalism in a state transforming to communism; for many, however, it is a goal in itself. This binary view of potential political and economic systems may be thought simplistic, but it is a debate that is extremely common. Necessarily, many other systems are not touched upon.

History: Does history demonstrate the potential of capitalism/socialism?


  • History has proven its past that socialism does not work. In the case of extreme socialism with Joseph Stalin, he would put his farmers in a ditch, if they didn't give up their crops to be distrubuted evenly throughout Soviet Russia. Socialism does not fit the needs of people, Capitalism does. History has proven it's past, and Socialism without a doubt, does not work. As Franklin D. Roosevelt's famous saying goes:
"Capitalism is unequally divided riches while socialism is equally divided poverty."
  • Private property is essential to the human race. The right to own property is central to man’s existence. Private ownership of property (including land, businesses and goods) gives individuals security and a means to control their own affairs. Ownership brings responsibility and allows individuals to plan for the future so as to provide for themselves and their families. For example, owning a house, a business or some land makes it possible to borrow against that property so that individuals can invest for the future. The lack of private property rights in much of Africa makes such borrowing and investment impossible, and is one reason for the continent's lack of economic growth.


  • Capitalism is inefficient and causes inequality, exploitation and misery. The wealth of the earth belongs to all men or to none. Under capitalism, property is concentrated into the hands of relatively few well-off people, leaving the many with nothing and at the mercy of the rich for work, charity, etc. This leads to gross inequality, exploitation and misery. Nor is it economically efficient, as the rich have so much already they have no incentive to use their property productively.
  • Socialism seeks social justice. Socialism seeks to redistribute wealth and to ensure that the means of production are at the service of the whole of society, so that all can benefit and none will go without.
  • Capitalism fosters the exploitation of third world countries. Third world countries In the era of industrial revolution, European imperial powers extended control beyond the limits of Europe by colonizing nations, namely Africa. This colonialism is rooted in the framework of capitalism as a means to expand the economy, garner resources, and spread the market. Thus, said situation in Africa is not a product of a non-adherance to capitalism. Rather, the situation is caused by colonialism, a tool of capitalism.
  • The examples that "Yes" cites are not socialism Socialism, in it's purest form, means a classless society where everyone owns the means of production. To argue that this was the case in the Soviet Union would be ridiculous. The examples of socialism have been small and fleeting, just like the examples of capitalism were in medieval times, but where socialism has been practiced it has greatly improved the lives of the poorest people living there. Examples of true socialism include the Spanish revolution, the Zapatista revolution in Chiapas, southern Mexico, the Israeli Kibbutzim and examples of things that have got, or are getting, close to socialism include the recent Venezuelan and Bolivian revolutions involving large federations of communes etc., the recent Kerala experiment in Kerala, India and many others. If you look at all these examples you will see that they have,a t least partially if not greatly, improved the lives of the people in them.
  • Private property is not essential to the human race Focusing only on the very narrow are of Europe, the most prosperous time for ordinary people was a time without private property. This time was the 11th to 13th centuries. During this time there was no private property and everything was run by local currencies in local egalitarian economies (much of the aristocracy was losing control, hence why they invented corporations), not centralized currencies or large corporations. In Life Inc. Douglas Rushkoff writes that at this time "quality of life for most Europeans was better than at any other time in history, including today"; "The working class enjoyed 4 meals a day, usually of 3 or 4 courses. They worked 6 hours a day, and just 4 or 5 days a week"; "In addition to metrics such as demographic expansion and urban development, measures of health and well-being also surpassed our own". This was the most prosperous time for Europeans in their entire history: it was also the closet Europe has ever got to socialism. But this prosperity was undone when, in the late 13th century, local currencies were outlawed, to be replaced by centralized currencies, and control over society was ceded to chartered corporations, owned by monarchs and run by wealthy merchants. Rushkoff writes that "within 10 years, the population increase had reversed to a decline as standards of living fell". This was the first attempt to impose something like capitalism (it was almost capitalism but not quite the one we know) on people and it collapsed in 1347 when the drops in living standards fell so drastically that there was an outbreak of what we now call the black plague, which killed more than half of Europe's population. The black plague was directly related to the drop in living standards that the introduction of the quasi-capitalism.

Motivations: Does capitalism appropriately harness individuals desires?


  • Capitalism harnesses the dominant individual desire to succeed. The drive to succeed as an individual is the strongest motivating factor a human being can feel in their work. When work is uncoupled from reward, or when an artificial safety net provides a high standard of living for those who don’t work hard, society suffers. The fact that individuals are driven to succeed is in all our interests.
  • Capitalism does not prevent anybody from aiding a fellow man, just the exact opposite. There are lot of rich people in capitalist society who provide grants for charity funds, student fellowships etc. After all, anybody in a capitalistic society can take some of his own money or goods today, out of his/her free will, and go and give them to other (poorer) people, if he or she feels it's the right thing to do. Capitalism doesn't prevent that; nor does it prevent you from keeping your earned goods/money if you want to. On the other hand, socialism actively and rather aggressively restricts the amount of riches one can have. So, out of the two, capitalism clearly offers more choice.


  • Many could be motivated by a wish to aid their fellow man. Over time, as the benefits of this better way of life become obvious, all will. The impulse to share wealth and material amongst the community, to support all, leaving none behind, is one of the purest mankind can experience. It is not merely possible – it is a demonstration of the progress of our species to a finer, more humane state of being.
  • Capitalism prevents many individuals from a chance of success Since there are such vast inequalities within capitalism some individuals are prevented from a chance of success. For example, there is no way a Sudanese man who earns less than a dollar a day and has to feed a family of 5 can achieve success through anything other than violence. And the chips are stacked mightily against his kids as well. This goes on all across the spectrum of poverty that is so prevalent in capitalism. But in socialism, since people are equal, and since some people are not forced into poverty so others can get rich, this is no longer a problem.
  • Capitalism often prevents happiness. The ultimate desire of any individual, except possibly psychopaths, is to be happy. Everything else is a process in trying to achieve that. And since humans are pack animals we need meaningful contact with others in order to be truly happy. But capitalism disconnects us from others and from everything that is valuable in our lives in a process discussed by Douglas Rushkoff in "Life Inc."
  • Capitalism subverts solidarity In a capitalist environment the ultimate end is the acquisition of profit. But since the easiest way to achieve a profit is to make somebody else pay the bills, capitalism subverts solidarity. If I pay you cheap, abysmal wages I make more money and am judged as more successful under capitalism than if I pay you a fair price. The best way to get to the top in capitalism is to exploit and steal from everyone else. "Yes" makes the argument that in capitalism people can give money to anyone they want but that is a weak argument. Even in fascism, the dictator could give all of his earnings to the poor but that doesn't mean s(he) is going to. Even though people can give money to others in a capitalist system, the environment encourages people to make as much money as they can at the expense of others. And the amount that rich people give to poor people as charity pales in comparison to the amount that the rich have made exploiting the labour of the poor. The fact is that most of the excess money the rich has was created by the work of the poor but then siphoned off into the pockets of the owners, managers etc.

Market prices: Do market prices under capitalism make sense?


  • Market prices are always fair prices. In capitalism, the market determines price, including pay - the price of labour. If some people are paid huge sums, that is because other people believe they have unique talents which are worth paying for. If they fail to perform, then they will stop being rewarded so highly. This is all part of a dynamic capitalist system which values individuality and rewards ability and risk-taking.
  • Capitalism reserves an important role for compassionate government. In any case capitalism isn't a monolithic system - capitalism can have elements of control in it. After all, taxation is a capitalist creation and almost all capitalists accept a role for state regulation to prevent market rigging and to help those in absolute poverty.


  • Capitalism rewards people in perverse ways. Some footballers or company chief executives earn a thousand times more than nurses. Wealth is concentrated in the hands of the few. The rich get richer, the poor get poorer. The poor are fooled into thinking that they can gain in capitalism, when really all their wages do is hold them in place – their savings are swept away in the first moments of unemployment, a concept central to capitalism but one that socialism destroys.
  • Poverty is often a byproduct of inequalities under capitalism. The structural inequality in society is produced by the wealth gap initiated through capitalism. Taxation to help the poor in a capitalist economy is redundant because poverty is produced by the idea of taxation of capitalism.
  • Markets do not set a fair price. Market prices leave out what economists call externalities. For example, if I have a choice between buying something that runs on oil and something that runs on wind energy, the fact that one choice is leading to the destruction of the environment does not factor into the price. And it is cheaper to use the oil that we already have all the technology for and have built the access to even though it will destroy the environment. In other words, as the market stands today, pollution is good. Also, in a market economy it is cheaper to exploit someone than to pay them a fair wage, since it costs me less to exploit someone than it does to be fair to them, because externalities are not counted into price. So markets promote anti-social behavior and encourage people to exploit and repress each other.

Government hand: Does government slow the markets or provide a guiding hand?


  • Socialist government slow the progress of the markets. The guiding hand of government is too strong in a socialist system; it means that change is slow – which means that innovation is missed. This isn’t just pro-business, it has real effects on the lives of citizens - people are poorer because of it. In a capitalist system, economies are diverse enough that when problems happen in one sector, others are often insulated by their differences. In a socialist system, where everything is centrally controlled and diversity is non-existent, when government gets things wrong, everyone suffers. Ultimately, socialist systems are so inefficient and corrupt that labour has to be forced for the state to continue functioning (though this may also be a logical outcome of thinking less of the importance of individual freedoms compared to some abstract communal good). The failure of the USSR and other command economies shows the poverty of socialism and the failure of central planning, as on a smaller scale does the failure of nationalised industries in many western countries.


  • Unplanned capitalist economies undergo dramatic volatility. Economies in capitalist systems are essentially unplanned, so they often crash, producing depressions that damage the lives of millions. Socialist economies are planned, which means that problems can be foreseen and prevented. Ultimately, socialism guides with the aim of human happiness in mind, rather than the glorification or gratification of a particular individual or class. To gain this for all rather than just for some requires an element of social control – the excesses of capitalism will forever mean that too many fall by the wayside as the strong profit, and the weak are left behind. Critics who point to the failure of the soviet bloc don't understand that this was not true socialism, which has never been properly tried, but a corrupt version of central planning which served selfish elites rather than the good of the people as a whole. Examples such as Britain's National Health Service, or the European social model of welfare provision show the strengths of a socialist approach.

Ruled by the individual, ruled by the state: Which is better?


  • In capitalist systems, society is rightly ruled by the individual. Who would want to live any other way? In socialist systems, society is ruled by the state. Why would one want to live like that?


  • In socialist systems, society is ruled by the collective people. Who would want to live any other way? In capitalist systems, society is ruled by the individual and their independent pursuit of money. Under socialism, society is ruled by individuals collectively working together toward a common purpose to enhance the collective good.
  • Capitalism is not ruled by the individual, it is ruled by the corporation. This argument is fairly self-explanatory. Corporations are totalitarian structures and are completely unaccountable to the public. Capitalism was designed around the interests of corporations, after they were designed by monarchs so they could keep their power over the rising middle-class and make money just by virtue of having money. Far from being ruled by individuals, capitalism is ruled by corporations who must, by design, continue to expand and make a profit, no matter how harmful this is to the individuals in society. The only society that is truly ruled by the individual is anarchism, a la the ideas of Kropotkin etc., which is a form of socialism. Anarchism is ruled not by a state or a group of corporations, but by all the individuals in society making decisions together on an equal basis through federated council structures.

Competition: Which system is more efficient?


Competition yields better products and more efficient processes in all fields of man's activity. Whilst it is true that monopolies sometimes form, these are combated by regulatory methods like monopolies commissions (witness attempts to break up Microsoft, or regulators forbidding the merger of some airlines on competition grounds). So capitalism actively tries to stop monopolies. On the other hand, monopolies are inevitably a part of every aspect of activity in socialist systems - the monopoly of the state.


It is false to say that capitalism secures competition automatically. As everyone knows, monopolies are often formed under capitalist systems. Capitalist monopolies are pernicious - they mean that individuals profit obscenely as they can charge exorbitant costs, since citizens cannot obtain services anywhere else. On the other hand, socialist monopolies are benign since the state has the interests of citizens at heart, rather than the enrichment of a particular person.

Which system protects the human rights more widely?


In 'Wealth of Nations, Adam Smith argued that capitalism had a "guiding hand" which drove people working for their self-interest to help society as a whole. On the other hand, socialism creates a certain guiding hand that drives people for the greater good to acutally help the special interest who hold the power.

Socialism cannot protect human rights because it seeks the good of the people. This type of utilitarian framework neglects appeals for human rights and any other framework of deontology, morality, ethics, etc. Capitalism is able to embrace the utilitarian framework while not precluding any form of decision calculus in policymaking to protect human rights.


  • Capitalism may use the language of human rights, but it only really respects the right of the weak to starve in the gutter, and the right of the strong to keep them there. Socialism understands rights more widely and fully, and provides for the right to work, the right to an education, and to health care free at the point of use. It cannot be right for a few individuals to block the progress of all towards these great goals.
  • Capitalism consistently blocks the most basic right of all, the right to life. According to the UN "The Right To Food: Commission on Human Rights Resolution 2002/25” 36 million people starve to death every year despite the fact that the world currently produces enough food to feed everyone and according to the Food And Agricultural Organization Of The United Nations' 2008 report the world could produce twice as much food. That means that because capitalism has such an unfair system of distribution and of rich countries stealing resources from poor countries, the figures for deaths from starvation that could easily be prevented is the equivalent of 6 Nazi Holocausts every year! That is not protection of human rights in the slightest.

See also

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