Sociology concepts and applications

Socialism vs. capitalism: Advocates and critics

In socialistic or quasi-socialistic societies such as Sweden, the social welfare of the nation is actively promoted by the government -- a government that represents the people as a collective. People are entitled to the benefit of healthcare, daycare, and higher education for free or at radically reduced rates. This creates a more equitable society, and creates a more level playing field in terms of the nation's state of health, the opportunity to gain knowledge, and the opportunity for men and women to work in an equitable fashion.

The problem is that socialism requires an extensive government bureaucracy to enforce. This can create red tape that makes it difficult for entrepreneurship to flourish. Also, taxes tend to be extremely high in a socialistic system, which can create a disincentive to work long hours and serve the public (for example, store hours may be less likely to be 24/7 in a socialistic nation, because it is not worth it, financially, for the owner to stay open for that long). Finally, people, if assured of a job in the elaborate civil service system of a socialist nation, tend to be less motivated to excel in their jobs because they are unlikely to be fired.

Capitalism provides more incentives for wealth accumulation, and more elaborate rewards for those who excel: employer-provided health plans can be quite generous, salaries can be extremely high in certain professions, and taxes are lower. There also tends to be less bureaucracy and regulatory constraints for business growth. Businesses are often motivated, because of increased market competition, to serve the customer with expanded services and lower prices. The downside, of course, is that many individuals fall through the cracks of capitalist systems: people may work hard but not receive healthcare, private universities can charge very high tuitions, and elite universities only give scholarships if it suits their budgets. This can limit access to education and opportunities. There is less job security under capitalism, fewer benefits such as daycare to make life at home manageable for wives and husbands, and also less generous unemployment insurance. Finally, capitalist societies tend to be more reluctant to regulate entrepreneurial excesses, as was seen in the recent meltdown in the subprime mortgage industry.