This essay has critically discussed two models, they are capitalism and socialism. I have compare the advantage and disadvantages of these model and analysis why capitalism is going to transit to socialism. Lastly, I have discussed how capitalism satisfies Rawls’ two principles of justice.
Capitalism and socialism
Capitalism has being developed over time to time. It can be defined ideally as an economic system in which the major portion of production and distribution is in private hands, operating under what is termed a profit or market system. (Shaw, Barry & Sansbury, 2009, p.127) The real capitalism is without government’s control over the market. Current capitalism is crony capitalism. Capitalism break the traditional relationship between feudal society and productivity, it has largely increase productivity and also promoted rapid development of science, technology and has greatly changed the quality of human’s culture and social values. The essential causes of capitalism are: people lose their production element; therefore they have to work for other. Another is a large number of money and production source are in private owns.
Features of capitalism are private property, profit motive, inequity distribution of wealth and competitions. Capitalism brings a lot of advantages to us. But it brings some disadvantages, such as inequity distribution of wealth, breed oligopolies and cause some environmental problems.
Inequity distribution is incarnate from layfolk earning money form labor, and capitalist earning money form their investment. It is a totally different way of earning money. In this way, it just makes poor people being poorer and rich people getting richer. Some countries adopt a highly tax pay system to solve this problem, but it just a short term solution.
Another issue of capitalism is it breeds oligopolies. Oligopolies are not good for the market, it creates instability within the market, supplies are more than demand and it will cause a huge waste and unemployment.
The third issue is capitalism, which cause environmental problem. In the early years of capitalism, in order to increase their profit and enhance competitiveness within the market, capitalist pursuit industrialization. Therefore it cause environmental problem, such as pollution. Capitalism was not subject to government’ intervention, they so can do anything to damage the environment, which makes the environment from further damage.
As I mention before, capitalism create some social, environmental problems. While the development of capitalism, these problems get worse. One day capitalism will not exist; capitalism will slowly be substitute by socialism. Socialism is socialist economic systems vest the ownership of production and its means in the hands of the community more usually in the hands of government. (Shaw, Barry & Sansbury, 2009, p.142) Friedrich Engels and Karl Marx, advocated for the creation of a society that allows for the widespread application of modern technology to rationalise economic activity by eliminating the anarchy of capitalist production.
In fact, we are in a stage of transition from capitalism to socialism. For example, in the current society, most shareholders of a company gain profit when the company is doing well, therefore everyone could share the company’s profit. Some countries have high tax of patrimony, it means the their children can not enjoy a lasting money。So there is no point to accumulated capital.
Rawls’ two principles of justice
According to the discussion about capitalism and socialism, I think capitalism is most closely approximates to Rawls’ two principles of justice. Rawls first principle is consider liberty and the second principle is considering the social and economic inequality. The first principle takes priority over the second. So we are discussing liberty first. The liberty Rawls has in mind is the traditional democratic ones of freedom of thought, conscience, and religious worship, as well as freedom of the person and political liberty. (Shaw, Barry & Sansbury, 2009, p.254) capitalism satisfies that. The Laissez-faire concept of capitalism put emphasis on the degree that government does not have control over markets, and on property rights.
Under capitalism, all properties are private owned. The owner can do anything they want to do about their property and all actions are without government’s intervention. Actually, this is kind of liberty. Socialism is totally different. Socialism promotes the communities as a whole, social own and control over products, capital, land and asset which allocated by public interest. Under socialism, we lose control over properties. Which mean our choices in liberty are lost.
The second principle is considering the social and economic inequalities. Social and economic inequalities are to satisfy two conditions: firstly, they are to be attached to positions and offices open to all under conditions of fair equality of opportunity and second they are able to the greatest expect benefit of the least advantaged members of society. (Shaw, Barry & Sansbury, 2009, p.254)At the first point which is fair and equality of opportunities. Socialism is more suitable than capitalism. Under socialism, social own all capital, it should be distributed evenly to each individual, so given us an equal chance of each individual. It has satisfied fair equality of opportunity. But under capitalism, the poor will be poorer and the rich will become richer. It does not satisfy fair equality of opportunity.
While capitalism does not meet the second principle, but it meet the first principle. Capitalism could give the greatest expected benefit of least advantaged member of society. Under capitalism, economic was rapidly develop, therefore it create wealth and employment opportunities of many. Wealth was distributed into the society and also every person. It is like a distribution of pizza. Capitalist get the big one, and those non capitalist get the small one. But it did create wealth for them. If we use socialism instead of capitalism, it is impossible to be creating such wealth to every person. Overall, capitalism is more suitable for Rawls’ two principles of justice. It has satisfied the first principle of liberty, also part of the second principles.
Capitalism has created great wealth for society, it also increase productivity to promoted rapid development of science and technology and has greatly changed the quality of human’s culture and social value. But it also brings some disadvantages to us. Such as, environment problem cause financial crisis. As the development of capitalism, these issues will become increasingly serious. The shift from capitalism to socialism is a good way to solve these problems. Capitalism is the most closely approximates Rawls’ two principles of justice. Because capitalism is more liberty than socialism。
Shaw, W., Barry, V., & Sansbury, G. (2009). Moral issues in business(1st ed.).