Balancing Socialism and Capitalism
Amrit Hallan
May 09, 2007
A letter to the editor in our newspaper today lamented the victory of Nicolas Sarkozy, the French President as the victory of the rich over the poor. I'm not very much acquainted with the French politics but I could make out that the current elections were some kind of a conflict between the Left and the Right; between socialism and capitalism.
According to what I've been reading all over the Internet, the French are used to working less. The labor unions are wreaking havoc with the French economy and the typical work culture is non-existent there. The various ethnic minorities originating from the Muslim parts of Africa are copiously contributing to the mess. Sarkozy has promised to change all that. He has promised to usher in a culture of work and performance. He wants the French to work hard and prosper.
To the great chagrin of the French Left, Sarkozy proudly claims that he is pro-American. Everything pro-American is pro-capitalism. But this article is not about French politics. It's about out and out socialism and out and out capitalism -- a thought that was triggered by the expression "the victory of the rich over the poor".
I often wonder why various governments and societies can never strike a balance between capitalism and socialism, for they both have something positive to give. Capitalism teaches us how to work hard and remain competitive and consequently, attain prosperity. Socialism fights and mitigates the disparities between the rich and the poor and tries to create and sustain a just society. Pure forms of both the ideologies, as we have seen in different countries, are detrimental. Pure capitalism, due to its very nature, widens the gap between the rich and the poor. Pure socialism breeds inefficiency, laziness and poverty.
Theoretically, so far, in India we have had a mixed form of economy. Both private and public sectors have prospered side by side. But, as I said, this is theoretical. In reality, we almost ruined the country by adopting the pure socialist model. Almost everything was nationalized. The multinationals were told to leave the country and the private sector, barring a few highly powerful business families that were close to the ruling class, was severely discouraged. You were evil if you wanted to earn profit. Bureaucratic corruption was rampant, the poverty level reached its heights, the work culture practically disappeared and the rogue labor unions brought the machinery of the country to a long-lasting halt.
As a result, we had one of the most sluggish economies of the world and we are still languishing due to the impact. States like West Bengal are still among the poorest because of their lopsided pro-labor and anti-industry policies. The socialism of West Bengal, just as in Russia and China, has also proved that such a system breeds autocratic, despotic and anti-poor governments that intentionally keep their citizens backward so that they can rule them forever. Fortunately, things changed in the early 90s (but not in West Bengal and a couple of other states). Actually, there was no other choice.
Similarly, the pure form of capitalism has its own evils, for instance ruthless pursuit of profit, exploitation of the workers, monopolistic corporations, periodic economic depressions and a galling lack of social securities.
So we need a middle path. Profit and social welfare should go hand in hand not because of regulations, but because of choice. A healthy, prosperous and hard working society benefits everybody. The industry is necessary for the labor and the labor is necessary for the industry and they cannot survive without each other. There should be no exploitation, but then there should be no unfair advantages too. Everybody should earn according to what he or she does, physically or mentally.
Total control and total freedom create chaos because sadly, we don't live in an ideal world: there will always be some individuals trying to take an undue advantage of any system they live amidst. The world today needs a balanced concoction of socialism and capitalism in such a manner that people don't die because they cannot buy the medicines but still the pharmaceutical companies make a profit. We need a system that lets you become as rich as you want, but without increasing the number of poor. We need an economic theory that encourages individualism for the greater good of the society.
According to what I've been reading all over the Internet, the French are used to working less. The labor unions are wreaking havoc with the French economy and the typical work culture is non-existent there. The various ethnic minorities originating from the Muslim parts of Africa are copiously contributing to the mess. Sarkozy has promised to change all that. He has promised to usher in a culture of work and performance. He wants the French to work hard and prosper.
To the great chagrin of the French Left, Sarkozy proudly claims that he is pro-American. Everything pro-American is pro-capitalism. But this article is not about French politics. It's about out and out socialism and out and out capitalism -- a thought that was triggered by the expression "the victory of the rich over the poor".
I often wonder why various governments and societies can never strike a balance between capitalism and socialism, for they both have something positive to give. Capitalism teaches us how to work hard and remain competitive and consequently, attain prosperity. Socialism fights and mitigates the disparities between the rich and the poor and tries to create and sustain a just society. Pure forms of both the ideologies, as we have seen in different countries, are detrimental. Pure capitalism, due to its very nature, widens the gap between the rich and the poor. Pure socialism breeds inefficiency, laziness and poverty.
Theoretically, so far, in India we have had a mixed form of economy. Both private and public sectors have prospered side by side. But, as I said, this is theoretical. In reality, we almost ruined the country by adopting the pure socialist model. Almost everything was nationalized. The multinationals were told to leave the country and the private sector, barring a few highly powerful business families that were close to the ruling class, was severely discouraged. You were evil if you wanted to earn profit. Bureaucratic corruption was rampant, the poverty level reached its heights, the work culture practically disappeared and the rogue labor unions brought the machinery of the country to a long-lasting halt.
As a result, we had one of the most sluggish economies of the world and we are still languishing due to the impact. States like West Bengal are still among the poorest because of their lopsided pro-labor and anti-industry policies. The socialism of West Bengal, just as in Russia and China, has also proved that such a system breeds autocratic, despotic and anti-poor governments that intentionally keep their citizens backward so that they can rule them forever. Fortunately, things changed in the early 90s (but not in West Bengal and a couple of other states). Actually, there was no other choice.
Similarly, the pure form of capitalism has its own evils, for instance ruthless pursuit of profit, exploitation of the workers, monopolistic corporations, periodic economic depressions and a galling lack of social securities.
So we need a middle path. Profit and social welfare should go hand in hand not because of regulations, but because of choice. A healthy, prosperous and hard working society benefits everybody. The industry is necessary for the labor and the labor is necessary for the industry and they cannot survive without each other. There should be no exploitation, but then there should be no unfair advantages too. Everybody should earn according to what he or she does, physically or mentally.
Total control and total freedom create chaos because sadly, we don't live in an ideal world: there will always be some individuals trying to take an undue advantage of any system they live amidst. The world today needs a balanced concoction of socialism and capitalism in such a manner that people don't die because they cannot buy the medicines but still the pharmaceutical companies make a profit. We need a system that lets you become as rich as you want, but without increasing the number of poor. We need an economic theory that encourages individualism for the greater good of the society.
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