“Jeff Bezos’ net worth just hit an all-time high. Here’s how the richest person in the world makes and spends his $171 billion fortune”
Headlines like this are all too common in today’s media. The 1%, excuse me, the 1% of the 1% are creating a wealth gap that has never been seen in the existence of modern society. Real estate and education inflation is skyrocketing, as well as our society is plagued with social issues such as global warming, poverty, inequality etc. All of this has led to many millenails to preach and push for socialism as the answer to our problems. A redistribution of wealth is believed to allow us as a society to prosper together. Politicians like Bernie Sanders are hard pushing for “Democratic Socialism”, and a ton of people are jumping on the bandwagon. So it begs the question; Is socialism the answer? Before we answer this question we should first review the differences between capitalism and socialism(if you’re knowledgeable feel free to skip ahead)
Capitalism focuses on a free market approach where the economy is profit driven and the government has little intervention. In a capitalist economy, individuals and firms own the capital and the production of goods and services is determined by the market.
Socialism focuses on having the means of production to be owned by the state. Essentially, the government owns the economy and decides how income is redistributed based on an individuals contribution to the economy. The government determines the production and pricing of the goods and services. Socialism revolves around the idea that a socialist society promotes equality and the workers are compensated for how many hours they work, not the value of what they produce.
Is Socialism the Answer?
Capitalism and socialism both have they’re obvious flaws. Capitalism produces inequality, financial instability, monopoly power, monopsony, environmental costs and negative externalities, along side greed and materialism. On the other hand, socialism has its deep flaws as well. Socialism requires an entire society to work in harmony and unison. If you’ve been around planet Earth long enough, you’ll quickly realize that humans are extremely poor at working in unison on a large scale. Individuals and groups consistently sacrifice what’s right for the greater good in order to benefit themselves. Additionally, Socialism doesn’t promote competition and entrepreneurship which creates abundance and help push the world forward in terms of innovation, and options for consumers. Sometimes greed is good, and without the competitive nature of capitalism we would most likely be decades behind in technological advancements, medicine, science, space exploration etc.
That being said, an economy built purely on capitalism would fail. Imagine there’s a townhouse complex and one of the houses catches on fire. The fire begins to spread to the adjacent houses by the time the fire trucks arrive. The firefighters charge the initial house a fee to save the house and then move on to the next one. Unfortunately the next house owner can’t afford the fire departments services, so the firemen move on to the next house and so on until someone can pay for the services. In a fully capitalist society everything costs money on a per use basis. This obviously isn’t ideal as services like policing, fire department, education and ideally health care should be universally accessible to everyone equally. Some form of socialism is present in all economies and some form of capitalism is present in all economies.
It’s evident that economies built solely on socialism or solely on capitalism are destined to fail. That is why it’s ridiculous to preach socialism as the answer to our problems in western society. People use the example of the Nordic countries as the way our lives should be led but they fail to realize that there is more to it then simply socialism.
The Nordic Countries
As discussed above, the Nordic countries(Sweden, Norway, Denmark, Finland and Iceland) are not purely socialist. The model of their economies is based on a free market with high taxation(50% marginal tax rate versus the US’ 27.4%). The government then uses these high levels of tax revenue to provide great welfare programs like free education and free healthcare. So for a country like the US, is the solution simply to raise taxes and use the additional revenue to create more welfare programs? The fact is, the issue isn’t so much a lack of money but rather a cultural issue. Yes , free healthcare and free education contributes to the happiness and success of the citizens of the Nordic countries, but the major contributor is the systems implemented in their economy, and the attitude of their citizens.
One prime example is the rehabilitation system in Norway. The prisons in Norway treat their prisoners as human beings meant to be rehabilitated, I know, what a concept. Prisoners are rewarded if they have good behavior, they tend to be sent to farms where they are given their own home, and the ability to go for runs. In the maximum security prisons the walls are decorated with modern art, inmates have their own private washrooms, computers, TVs and libraries are also at their disposal.
The underlying theme of the prison systems in places like Norway is that they focus on rehabilitation rather than punishment. For example, a prison in Norway has a modern music studio filled with electric guitars, mixing consoles and as well as art on the walls. Tools like hammers, axes, chain saws, cutlery and sharp knives are provided, tools that are regarded as weapons in North America. You see, individuals are treated with compassion in these prisons, they are treated like humans who made a mistake and need to learn from it and are given a second chance. In the US, prisoners are treated as worthless animals with no value to our society. When they are treated this way they have a much higher chance to commit further crimes when released. This contrast explains the US’ recidivism rate of 76.6% within five years and Norway’s rate of 20%.
Obviously, the prison system isn’t the only thing separating the Scandinavian countries from the rest of the world. I won’t go into too much detail here, but the Scandinavian countries have a better work life balance, spend more time outdoors, their basic needs are met, and they have a greater sense of community and trust in one another. All of this leads to not only a flourishing economy, but to a happier and healthier society as well.
So what’s the main point of all of this? Should we all just move to Sweden since everything is essentially better there? Well maybe, but the main point is; the rest of the world should learn from what they’re doing. Instead of spending hundreds of billions of dollars on the military, we should invest in better health care and better education. Instead of teaching people to be good workers and simply follow orders, we should train them to be good, efficient people with real life skills. Instead of treating prisoners like they’re worthless, we should treat them as people who need rehabilitation, and deserve a second chance(I believe in this when it comes to non violent crimes). Socialism is merely a bandied for a few issues, the core issue lies in how we operate and function as a society. The way we do things doesn’t promote as much equality, efficiency and happiness as it could and that is what we should be trying to change.
I don’t think socialism is the answer, although implementing more progressive socialistic policies will definitely help. The real solution lies in restructuring our societal and cultural values from the ground up.
Let me know what you think! I would love to have a conversation.