Democratic Capitalist or Democratic Socialist?

Question

As part of my study in Economics in the past, democratic socialist economy (like France, Canada, Spain, et.al. EU states) tends envolvement of the government in the economic activities of its society. In capitalist economy (like the great United States), most economic activities are left to entrepreneurs - in the same token however, because of "overriding interest" of majority of the populace, government has to be involved also in order to make sure that all economic activities of the entrepreneurs are within the regulations maintained by the government for which it was created to serve. At this point (I'm confused), what makes these two economic plans different then, I wonder? Which would you personally favor and why? Thanks for sharing your opinion, anyone.

Answer 1

You are confusing socialism and social democracy. Under socialism, government owns all (or essentially all) means of production (think Soviet Union, where almost all businesses and the majority of housing was government-owned, so almost everyone was working for the government and renting from the government). Under social democracy, government ownership of means of production is limited (although it does happen), but the government is engaged in massive income distribution programs (there is a progressive tax system in place, and education, health care, and old-age/disability pensions are financed from tax revenues).

The differences between U.S. and Europe are purely quantitative; both U.S. and European governments pursue redistributionist policies, but they differ in extent. Public education exists both in the U.S. and Europe (although private education is much more common in the U.S. than it is in Europe); government-funded retirement and disability pensions also exist both in the U.S. and Europe (and in both cases they are supplemented by private pension plans). One big (but again, purely quantitative) difference is health care; most European governments have implemented universal health insurance, while in the U.S. universal health coverage applies only to seniors through Medicare and to the poor and the disabled through Medicaid.

Answer 2

I agree that the problem with capitalism is that the poor can't afford to pay high prices, and as a result businesses get more money for serving the wealthy. However I don't agree that a centrally planned economy is the only answer, even if it is democratic. I believe decentralized democracy (as in independent but democratically run companies, as in anarcho-syndicalism) could be even more effective.

Personally, I think democratic capitalism is an oxymoron. Capitalism almost always results in inequality of wealth. With great wealth, comes great power. This flies in the face of the assumption of political equality that defines democracy. In most capitalist "democracies" of today, the democracy is being corrupted by campaign contributions, lobbyists, and the incredibly high cost of running political advertisements.

Answer 3

Socialism involves more intervention of the government. I wouldn't call many of those countries socialist, not even "democratic socialist", but some would surely qualify.

Personally, I believe that capitalism is more effective and preferable as a system of economic governance. I see the high unemployment rates in Spain and France (two of the more socialist countries in western Europe) as evidence of this belief.

Answer 4

Capitalism and free markets don't deliver the goods. You get hundreds of millions of bucks being wasted on developing Viagra when we really need money being spent on cures for infant diarrhoaea, which kills 4 million kids a year and malaria. Trouble is, poor people can't afford to pay for medication. Here in NZ capitalism forces farmers to switch from food production to growing flowers even though queues outside food banks grow longer, even in NZ. Only a centrally-planned economy can prevent these absurdities and injustices. Crazy thing is, rich countries like NZ and America already produce enough wealth to eliminate domestic poverty and, with a little wealth distribution we could easily eliminate poverty worldwide.