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I was always taught that socialism means that everyone gets paid the same and that no one is motivated to work any harder. I was taught to fear socialism. I was taught that socialism was evil. However, as I have grown, I have come to know the distinct differences between capitalism and socialism. Under capitalism, workers are paid wages that is taken from revenues as expenses. Everyone gets paid different wages depending on their level of experience, education, and performance. Everything left over from the revenues after expenses are paid is profit. At the end of the fiscal year, profit is given to the owner(s) of a corporation. If the corporation is large, like Wal-Mart, the profits reach several billions and the primary owners, the widow Walton and her 2 daughters, get the profits. The workers get no profits, and the owners, in this case the Walton family, do not work at all. Under socialism, workers are paid wages that is taken from revenues as expenses. Everyone gets paid different wages depending on their level of experience, education, and performance. Everything left over from the revenues after expenses are paid is profit. This is just like capitalism, but here is the main difference. Under socialism, the profits are equally divided among all the workers. So in the case of Wal-Mart, the workers would get the profits they make and not the Walton family who do not work. So to sum it up, the only difference I see between capitalism and socialism is that under capitalism, the owner who does not have to work gets to keep the billions in profits and under socialism, the workers keep the profits they work for. Question: Which would motivate workers more? Capitalism = no matter how hard you work, you will never receive a share of the profits. or Socialism = if you work harder, your profits will increase. I know that some small business owners share their profits with their employees, and that is good and is more socialist than capitalist. Small business owners also must work to maintain their small business, thus they are more like workers than capitalists.
ShamWow: First, True socialism has never been tried. It was never allowed to get started. However, many small communities survived by cooperatives and socialism. Second, the USA is the giant it is today because after World War 2, all other industrialized nations were decimated by war. England, Japan, Germany, France, Italy, and all others were bombed into oblivion. The USA was the only one left with working factories and a relatively low debt from war. It isn't because of capitalism that the USA is a superpower, it is because of war.
Zzssleepur: I did not mention anything about greed or government in my original question. Socialism is an economic system, not a political one. Businesses can be greedy under both systems, and the size of government can change in both systems. My question, and the main difference between capitalism and socialism is regarding the dispersion of profits. Under socialism, profits go to the workers who work for the firm, under capitalism, profits go to the owners who do not work for the firm, or even at all. It has nothing to do with government and how much employees are paid.
Person: Great question. In socialism, Capital to start a business can be raised through lending institutions like banks or other lenders. Risk will determine interest on that loan. In short, one man does not need to take all the risk, the cooperative of all the people can share the risk equally. If the business fails, the bank or lender can repossess the cooperative's assets, just like they do now. Everything works the same in socialism except that profits are shared by workers who work instead of hoarded by the few. You really didn't answer the question though, but I hope this helps you to do so.
Duke of Dixie: What you are talking about is communism and a dictatorship. Those are political structures. Under socialism, profits are not seized by the government. profits are kept by the company and shared between the workers in a free market democracy. Under socialism, government does not own anything they do not own under capitalism.
Thomas D: I beg to differ, There was no democracy in Russia. It was a one party state, like China, Cuba, and North Korea. Communism is the merging of a dictatorship or authoritative government rule and socialism. U.S.S.R. stood for the United Soviet Socialist Republic. However, names don't mean anything. North Korea is the Democratic People's Republic of Korea (D.P.R.K), and we all know that there is nothing democratic or republic about North Korea. They are communist.
Person: Excellent logic. As it stands, most capital is raised in the form of bonds, not stocks. Bonds are the preferred method of raising capital by all corporations, and it also accounts for over 80% of all trading in the stock market. The stock market is a misnomer, it should be called the bond market or capital market. People can invest in a socialist cooperative through the purchase of bonds, like they do with a capitalist corporation now. Thus, a socialist cooperative does not need to give ownership to people who do not work for it, they can simple issue bonds that pay back an interest rate equivalent to the risk posed by the bond. This is how business runs now, and even how international monetary policy is conducted between nations. For example, China buys US bonds as a means for balancing our debt. This is why we owe China so much money.
Capitalism is negative reinforcement, socialism is positive reinforcement. What sounds more enjoyable?
But what about the risk and work that the owner of the busniess would have put in just to make those profits? And if the owner does not see a potential for big profits, then no one is going to want to go into busniess because its apprently not worth it, so then what happens when there is no busniess because there is a lack of busniessmen? EDIT: But many busniessmen do rely on loans in capitalist soceities anyways, and an instituion in which many people share the risk is also known as a Corporation... but if workers are going to get all the profits instead of investors then why would someone invest in the first place? I doubt many workers are going to have the kind of money to actually invest into a company. So essentialy if no one is going to want to invest or take the risk, and if workers dont have the kind of money to take that risk, where is the money to start a company going to come from?
I think you have confused Socialism with Communism. Socialism is the Government takeover of Industry, profit is still there it just goes to the Government. Think about the oil industry in Venezuela as a good example. The workers did not make more when it was taken over by the Government, the Government just took all the profits for themselves. You also might be confusing worker buyouts of companies with Socialism. EDIT: You might want to rethink your edit there, Communism is an economic system not a political one. That is why technically the USSR was Democratic (political) as well as Communist (economic) EDIT 2 : Repeat after me :"Under Socialism profit goes to the Government not the workers". I do not think you understand this. Socialism "a system or condition of society in which the means of production are owned and controlled by the state" EDIT 3: Your own link says Socialism is "a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole. " This means state ownership, which means profits go to the state not the individual workers in the company. EDIT 4: But what you suppose is that profit stays within the company to be distributed to those workers. In Socialism it is sent to the community (State) to be shared by all. So to give you an example let us say you have two steel mills, in one the workers work hard and produce more. In the other mill they do not work as hard and thereby produce less. Under Socialism this would not matter because under Socialism the profit from both companies in sent to the State and the money is distributed among all. So to answer your question workers under Socialism would have less or equal amounts of incentive to produce more.
They work harder under Capitalism. What is my motivation to work in a socialist country? The government would provide me with a house, food, electricity, water, etc... why would I work when I could get those things for free. And by the way, workers do receive a share of the profits in Capitalism, it's called their paycheck.
Read " the first thanksgiving' the real story. then On your question, what you so lamely described using wally world is, that that under capitalism. people have a choice. you don't like your employer, you quit and go elsewhere. If you want to reap the profits, you create your own business. If you chose to reward your employees with profit sharing you can do so( ask any computer programmer working in silicone valley), under socialism this is not possible to do freely.
In Socialism, the government decides where the profit goes and 99% of the time it is not to the workers, it goes to their pet projects , did Saddam Hussein give the people of Iraq the profits or did he use those profits to build up his military or buy yachts or build statues of himself, does Kim Jong il give the people the profits or does he use their profits to build nuclear weapons and his army, does the leader of Iran , give the people their profits or does he use their profits to build his nuclear weapons and army--I think I will stay with Capitalism and make those decisions myself and leave the Government out of the decision of what is best for me and my family--Socialism may be Grand Bay if JESUS was the leader of our country, but until that time comes , I will never trust a living man to have that much power***********************************...
I think your thinking about communism. In communism the workers own the means of production. This means they all have a stake in the company. In capitalism, the capitalist owns the capital and only he has the risks; the workers in this systems are just peons. In socialism, the government owns capital.
Many companies actually have profit shareing, so at the end of the year they give back in a percentage to all employees. Capitalism all the way.
Name one country where socialism is king and where they have the same standards of living as people in the United States. Name one country where socialism is king and that country is a super power. Enough said!
Social capitalism is the best. People are too rotten for capitalism to work.
YOU fail to mention one BIG FACT! The government is the biggest employer in our country not private businesses.. YET government pays their employees 75,000 dollars to the 35,000 dollar paychecks of private business do. NOT mentioning the ridiculous fees of politicans and all their freebies and benefits for LIFE and the plane and pilots for PELOSI etc....... Then you have to stop and actually think of WHO IS PAYING THOSE GOVERNMENT JOB SALARIES? Who is greedy and who is more capitalistic? GOVERNMENT JOB HOLDERS. DEMANDING MORE THAN THEY ARE WORTH and get more than private business job holders! I think the greed is in the government..not private business. LOOK at the welfare system...and all social programs. PRIVATE BUSINESS PAYS FOR IT..not government! WE PAY GOVERNMENT TO WORK THOSE PROGRAMS...the GOVERNMENT DOES NOT!