Capitalism, Communism, and Socialism

As an introduction to our unit on capitalism, communism, and socialism, an experiment was performed among the class. Each person was given some candy at the beginning of class, with most people having 3 pieces and a select few having 10. We were instructed to play rock-paper-scissors with a minimum bet of 1 piece of candy with each other. For me, the game was fun, as I won my way from 3 candies to 7 at the end of our simulation. We were informed that this was the basis of capitalism, where there is a free market. This means that while some are born into large amounts of wealth, people are allowed to trade (in this case, play rock-paper-scissors) as much as they want, without any outside governmental interference. After, Ms. Bailey took all of our candies, and redistributed 3 once again to everyone. While playing the game was fun, it was frustrating that all of my hard work was for nothing.

Karl Marx and Adam Smith, the founders of communism and capitalism, both created their societal systems with the goal of helping the poor. Under communism, there is a shared ownership of all goods, and in theory, the individual morals of the people would eliminate the need for any kind of governing body. This would help the poor because under communism, everyone has the same amount of wealth and the society is classless. Socialism is similar to communism, where wealth is distributed among the population. The poor are aided here by the distribution of wealth by the government.

Adam Smith had a different, more passive idea for helping the poor through capitalism. Dubbed 'the invisible hand', Smith's theory was that without interfering at all with the economy, the poor would be offered higher quality goods for lower prices. To accomplish this, assuming the quality is the same, poor would naturally buy the cheapest kind of product available to them. This causes competition between businesses, which leads to either improved quality of goods, a lower price, or a completely new product to be sold. All three options are valid candidates for purchase, and as they are purchased, the economy is stimulated, without any governmental interference. It was given the name of invisible hand because when done correctly, it appears that there is some guiding force to the economy, where there really is none at all.

Each of these socioeconomic systems, when present in its 'true', or 'pure' form, has significant drawbacks. In socialism and communism, it is very difficult or impossible to become 'wealthy' compared to one's peers, and these systems discourage hard work because everyone will always receive the same or a similar amount of wealth. In capitalism, it is unfair that some are born into much more wealthy families than others. Along with this, the invisible hand can often take a long time to function properly, leading to economic hardship before it can fully be effective. Given these drawbacks, I believe that the only 'good' solution for a socioeconomic system is a combination of the three. A system that encourages and rewards hard work while also distributing some wealth to the poor, ideally would be perfect. Unfortunately, it's never truly possible to make a perfect society, and there will always be a downside to every system that is created.

In class, a Socratic seminar was conducted about these systems. There was discussion about other people's reactions to the game, and discussion of which system each person preferred. There was a pretty clear consensus that out of the three, capitalism was the best, but most agreed that there is no perfect system. As Ryan said, "CEOs make like 200 times more than the average worker. Clearly they work harder, but not 200 times harder". This point was one of the few that was agreed upon by everyone at the seminar. It was decided that people need a government for equality and to regulate some things, but there must be a limit on the regulation, and that a blend of capitalism, communism, and socialism is ideal for a society.