Why can't Capitalism hold up without Socialism?

Question

Capitalism is the Mona Lisa, Socialism is the nail that holds it up. Without Capitalism all you have is an ugly nail in the wall.Without Socialism you are left with only a broken work of art on the floor. What does this quote mean? How valid is it? Explain your response.

Answer 1

Marx answered this question many years ago. The internal contradictions of capitalism will lead to its demise every time!

One of these is the unequal distribution of wealth. As the wealth of an economy swings into the hands of a privileged few, they are no longer able to achieve levels of consumption that will keep the economic engine running. In other words, The Gates, Buffetts and Waltons can't step-up and buy millions of cases of beer, lawn chairs and game tickets to keep the economy going when they are the ones left holding the national wealth.

Conservatives in America subscribe to the silly notion that jobs and opportunity grow on trees. They think jobs are unlimited and all you have to do is go out and get one. If you can't get one then you make one....become a hotdog vendor or something.

Let's take the hotdog vendor example. Yankee Stadium has 3 hotdog vendors, let's say. Welfare, unemployment and all the other social saftey nets are suddenly eliminated. People have to work or die.

Suddenly, Yankee Stadium has dozens of hotdog vendors. This increases the demand for hotdogs, buns, ketchup, mustard, etc to supply the vendors. The price of hotdogs goes up and profit margins are squeezed razor thin, too small to make a living on. Which vendors survive? The ones with lots of cash who can wait out the bankruptcy cycle that will hit the other vendors. So, the bankruptcy cycle is complete and many of the other vendors are unemployed, perhaps indebted from their failed business venture. But there is no safety net! They can't work, they don't have any income, so they slowly die of starvation or untreated diseases.

This then lowers the pool of available workers for the rest of the economy, which causes cost-push inflation as the remaining businesses compete for a smaller number of workers. McDonald's is trying to recruit Burger King's workers from right under their payrolls. "Hey, come work for us and we'll give you two more bucks per hour."

This squeezes their margins until their shareholders can't take the lower profit margins anymore. McDonalds and BK lobby the government to reinstitute unemployment insurance because they are losing workers and customers to starvation and disease and their costs are rising.

The welfare state, you see, doesn't just benefit the unemployed, it benefits the wealthy! But you won't read about that on Fox News.

I like to use an example to demonstrate how wealth is created on my conservative friends. I ask them how wealthy would the creator of a Windows operating system be if he was the only man living on a tropical island?

Societies create wealth, not capitalists. Well designed societies are more sustainable.

Answer 2

There are several of really nice answers that try to explain this issue and I would (as a socialist) like to see it put to a vote (in 7-14 days)

Capitalism is like a picture that we all try to strive for.
The independence of the capitalist . The whole: 'I worked hard to get were I am and I deserve what I have' the riches the fame etcetera.

Socialism is what is holding it up. That capitalist thinks it was his hard work that made him rich but in reality he was dependent on others for a lot of his wealth.A pure capitalist might say if you are old (or something anything else) and can not provide for yourself then you should starve . They called it something like Social Darwinism , A socialist would say the person is born and therefore should in some form be taken care of.

This is about the tenth answer (about the third hour) and I am more of a socialist than a pure capitalist.
We are all interdependent all the way to the planet Earth as a whole and as individual living entities together. What affects you may eventually have an affect on me and visa versa.

Answer 3

I think it's opposite. I think that Socialism is the Mona Lisa and Capitalism supports it.

Socialism is a nice "warm and fuzzy"-"why can't we all just get along" type of system. Looks good on paper, but it doesn't work.

However capitalism with a few, well-planned social programs to those with needs (not want) ends up being pretty good. However, politicians like to make promises to get elected. These cost money and more often than not don't bring in revenue. With each new politician, more programs, more cost, more money, and more socialism.

Socialism is the one that can't stand on it's own. It needs the capitalistic economy to thrive so it can take some of it to pass around via social programs.

Answer 4

the rule of thumb of regulation, and that's enforcement by potential of oversight and inspection. that's the element that holds any monetary device from excesses and abuse. No - authorities established jobs at the instantaneous are not immediately "socialism", no more suitable than taxation is. Socialism has a particular meaning fairly break away social or societal. –noun a million. a theory or device of social company that advocates the vesting of the possession and administration of the technique of production and distribution, of capital, land, etc., contained in the community as an complete.

Answer 5

Most socialists/communists are very good with propoganda that sounds great - like your Mona Lisa garbage. The truth of the matter is that socialism is not egalitarian as it always results in some politician or bureaucrat deciding what gets produced and who is to profit, and who is to receive produced goods. Therefore, Sociailstic economics is sanctified, systemic cronyism. In capitalist societies, anyone who tries hard enough and has the slightest bit of ingenuity can make it. What is more egalitarian that that?

Answer 6

The last two responses are good.

My understanding of the quote is that they are interrelated in that modern economies are actually quite mixed. Capitalism has a great incentive system and is the most efficient, however, it can be a little cold and unfair. That's where a seasoning of socialism helps mitigate the negative and rapacious effects of pure capitalism.

Answer 7

I think this quote means that neither of these systems is workable in their purest forms. Most capitalist countries have included some socialism in them to help moderate the worst parts of capitalism. They have child labor laws, social security, health care etc etc. These laws and programs keep people from being abused by the upper classes and also try to make peoples lives better. In socialist countries we are now seeing more and more capitalism. This allows people who have ambition and motivation to excel, allows markets to efficiently allocate resources and promotes advances by giving people motivation to do better. A combination of these two systems is probably for the greatest good of the most people. Capitalism rewards people, and socialism protects them. You cannot have one without the other

Answer 8

Pure capitalism is what the US tried in the 1870s. It worked for the few, but failed the masses. The first reforms were in the 1890s under President Teddy Roosevelt.

Pure socialism is what cavemen used to have when they were in isolated tribes. It worked as long as the tribe was small enough that everyone could see the big picture ('we' all have to hunt, because we all have to eat.) Once cities became large enough that 'we have to' became 'someone else can', that's when socialism was replaced.

Answer 9

I don't think there is any country today that practices the purest form of either system; even China is adopting many aspects of capitalism that we thought they would never see. In a capitalist state, there is a need to modify its effects as capitalism does not help everybody ... and for those that cannot compete equally or effectively, support is needed. If proponents of capitalism in its purest form believe it produces opportunities for everybody, then why do many people who are well-educated, motivated and willing to work unable to find work that pays?

Answer 10

Since Capitalism is composed by the free forces of the market competing with each other to allocate the limited resources of society in the most efficient manner it would be ovbious that Capitalism as a system needs something to compete to in order to apply its resources efficiently. The question is why is competition so essential for our society to work...