Economic Idea Of Socialism example essay topic

Socialism aims at a social system based on public ownership of the means of production (Von Mises, 1969). Arising in the late Eighteenth and early Nineteenth Century, socialism developed as a reaction to the hardships caused by capitalism and industrial revolution. The government owns and operates all material resources in a social system. Socialism first originated in France and England at about the same time, but as it grew socialism took different courses throughout each country (Wells, 1912). Three major types of socialism existed; they were Christian, Democratic, and Utopian Socialism.

Karl Marx, who wrote The Communist Manifesto, was considered one of the most popular socialists. After him socialism was defined as either Marxist or non-Marxist (McConnell & Brue, 1990). Socialism made steady advances, mostly in its revolutionary forms, around the globe after World War II. For the first 30 years after World War II, it seemed as if socialism was on the rise. Even non-socialist nations adopted a number of social programs. By the mid-1970's people realized the socialism had not lived up to its promise; it had not worked well anywhere (Heilbroner & Thurow, 1982).

The primary reason why socialism failed was because of the prediction by Marx that the working class would sink continually deeper into poverty and misery was proved to be untrue. Present-day socialist parties play an important role in Western European electoral politics. Usually called Democratic Socialist parties, they have favored a variable economic mix of Capitalism and state control. In the third world, socialist programs have stressed land reform and centralized economic planning, often through a one-party, but since the 1980's there has been a movement toward state control of the economy (McConnell & Brue, 1990). From ancient times until well into the 19th century, people were often considered subjects, not citizens, of their states and countries The people wanted to see a change, which is why socialism was discovered (Heilbroner & Thurow, 1982). Socialism focused its aim on economic, political, and social justice for all people.

The possibility of achieving these aims was first envisioned in the last quarter of the 18th century, a time of extraordinary social and political upheaval. (Wells, 1912). Socialism grew out of the French Revolution and its intellectual growth and demand for equal rights, absolute democracy, and the redistribution of property. Socialism was first developed because of the revolutionary impact capitalism had on the European society. Capitalism first emerged late in the Middle Ages throughout the Industrial Revolution. Capitalism (or the market economy) broke all the social bonds that had been seen during the Middle Ages.

The class structure, in which everyone had a fixed position and individual responsibilities in society, was demolished. For the first time a large class of factory workers came forth whose livelihood depended on wages. They were considered to be deprived of property because they owned no means of production. The value of their labor was seized by the capitalists for profit, while at the same time their wages were kept as low as possible. Socialists saw the possibility of class conflict in this new capitalist economic structure. The conflict that arose was between the number of exploited workers and their capitalist exploiters.

Because of this conflict the socialists predicted the eventual transfer of the ownership of private property (the means of production) from the owners to the workers (McConnell & Brue, 1990). One of the most familiar types of socialism was referred to as Moderate Socialism. The founders of the Fabian Society, brought together by British social reformers Sidney and Beatrice Webb, viewed socialism in a moderate way. In return the Fabians helped to organize the British Independent Labour Party in 1893; which later would be appreciated with the newly organized Labour party in 1906. A Socialist Labour party was founded in 1877, and later being fragmented in the 1890's (Heilbroner & Thurow, 1982).

The clearest expression of moderate socialism was found in the Second International organized in Paris in 1809. The difference between the 1st and 2nd Internationals is that the 2nd International was coordinator of its affiliated political parties and trade unions' activities. Another characteristic of moderate socialism is that most of its members were revisionists (Goldhagen, 1996). Another form of socialism, this one beginning in the 19th century, was Christian socialism. Frederick Denison Maurice, John Malcolm Ludlow, and Charles Kingsley, all of who were Anglican clerics, offered Christian socialism as a cure for societys ills. Claiming that Christianity demands a concern for the poor, these men promoted partnership in production and profit sharing in industry.

Christian socialism was especially developed in Germany. In the United States, where European socialism never made much of an impact, the reform programs were put forward by liberal Protestant clergymen in the Social Gospel movement (Von Mises, 1969). The most notable leader was Walter Rauschenbusch, who insisted on "a new order that would rest on the Christian principles of equal" rights and democratic distribution of economic power (Heilbroner & Thurow, 1982). The third type of socialism that must be identified is that of Democratic socialism.

Democratic socialists expected the eventual turn of society from capitalism to the worker state (McConnell & Brue, 1990). This goal was expected to be obtained through education of the public and peaceful political change. This form of socialism made its presence felt greatest in England during the 19th century. In the 1880's a group of young radical including Sidney and Beatrice Webb, George Bernard Shaw, Sidney Oliver, and Graham Wallas founded the Fabian Society. The societys Fabian Essays, published over a number of years, contained detailed plans for social legislation and reform that influenced British society for decades. The liberal point of view in the United States also focused on social legislation.

Theodore Roosevelt's Progressive party platform of 1912 foreshadowed many of the New Deal programs of the 1930's (Von Mises, 1969). In France, Louis Blanc was the chief proponent of reform socialism. He believed that the state should establish "social workshops" controlled by workers. The workshops would gradually take over all production of goods until a socialist state was achieved (Wells, 1912). The next form of socialism has come to suggest the ideal human society, and its called Utopian socialism. Utopian socialists believe that it is possible to create a harmonious, cooperative human society in which everyone is an owner of private property that is, the means of production of wealth (Von Mises, 1969).

Utopian socialism originated in France with Henri de Saint-Simon and Charles Fourier. In England its founder was Robert Owen. Saint-Simon viewed industrialism and technology as the means to a better world. He predicted the existence of a society that would make the maximum use of the potential of every member.

Sources of class conflict would disappear, and government would become virtually unnecessary. Society would become a gigantic workshop in which management would replace political rule. Fourier devised a system of model communities, called phalanxes, on which the society of the future would be based. In these cooperative communities everyone would work according to their abilities and inclinations. No one would be coerced. Owen gained a reputation as a model employer in his textile mills.

On the basis of his experiment he proposed cooperative controls and the creation of villages of unity and cooperation. There were few attempts to make utopian socialism work in Europe, but there were many experiments undertaken in the United States during the 19th century. They were small communities that attempted self-sufficiency based on agriculture and traditional crafts. Nearly all of them failed (Heilbroner & Thurow, 1982).

An increase occurred in support of socialist parties after World War II, mainly in Western Europe. The greatest advance was scored in Great Britain in 1945. In ensuing years individual socialists won victories and in some instances formed governments in France, Italy, Belgium, the Netherlands, Norway, Sweden, and numerous other European countries. The Socialist International, similar to the Second International, was organized in 1951 in Frankfurt, West Germany (Goldhagen, 1996). In Asia, socialism made progress in India, Burma, and Japan; the Asian Socialist Conference was formed as the Eastern equivalent of the Socialist International. The Soviet satellites, the "Peoples Democracies" of Eastern Europe, came under the control of Communist-Socialist parties, but these were dominated in all cases by Communists.

China established a Communist government, as did Albania and, later, Cuba. The emerging nations of Africa, Asia, and Latin America frequently adopted social systems that were largely socialist. In many of these instances, the nations took over properties held by foreign owners. The influence of the Socialist party of the United States gradually declined, although much of its economic program became law under the New Deal of President Franklin D. Roosevelt (McConnell & Brue, 1990).

The period following World War II was also marked by the intense conflict between the Socialists and the Communists. The Socialists approved measures that would raise the living standards and strengthen the Western Europe military. Communists denounced these measures as noble preparations for war against the USSR. Socialist parties have suffered occasional setbacks in elections in those countries in which they form half of the two-party system, as in New Zealand and in Great Britain. Nonetheless, extensive and fundamental parts of the socialist program are permanent features of contemporary economic and social life (Goldhagen, 1996). By the mid 1970's people came to the realization that socialism had not lived up to its promise; it had not worked well anywhere.

The countries that adopted the socialist system were suffering dramatically. The Soviet Union, which was to have become a workers paradise, had an economy that was falling further and farther behind those of Western nations. China was in an economic tailspin. Its level of productivity kept it an underdeveloped nation. The standard of living in Easter Europe was far lower than in Western Europe. In African nations the economies were sinking.

The economy of Great Britain was severely depressed. Socialist experiments in France in the late 1980's were proving unworkable, and unemployment was increasing. In comparisons of the standards of living between market-oriented economies and socialist economies, the market economies consistently achieved far better results. This comparison led to an attack on certain socialist practices.

The first major attack was launched in China after Maps death. Under the leader ship of Deng Xiaoping, private enterprise was encouraged, and the results greatly improved Chinas productivity. In Europe, the new breed of socialists rejected the old doctrines of nationalization of industry and central planning. Instead, they tried to jump start their economies through more traditional market-oriented approaches. What proved to be the most surprising of all proved to be the destruction of socialism in the Soviet Union by Gorbachev. Gorbachev's extreme programs of economical reform and social sincerity (McConnell & Brue, 1990).

In 1988 a law making companies responsible for their own profits or losses went into effect, and freed companies from the daily supervision of central planners. Out of all the changes in the socialist world, the most serious attack on socialism came from Margaret Thatcher in Great Britain. During her terms of office the government denationalized major industries, including British Airways, Rolls-Royce, and British Petroleum. She also weakened the power of the labor unions.

Thatchers programs had mixed results. Unemployment continued to be a problem, and the distribution in incomes became more and more unequal. However, industries that were hurting were turned around, and British productivity increased dramatically. In the Far East the weakness of socialist economics was quite apparent in contrast to the very successful market economies of Taiwan, Hong Kong, Singapore, and South Korea. On the other hand, the socialist economies of Vietnam, Cambodia, Burma, and North Korea were struggling (McConnell & Brue, 1990).

There are several reasons for the failure of socialism. Primarily, the prediction by Marx that the working class would sink continually deeper into poverty and misery proved untrue. Social legislation, much of it passed out of fear of socialism, gradually improved the lot of workers in the industrialized nations. Market economies consistently raised the standard of living for the workers, and prosperity lessened their desire to undermine their governments. Another reason for failure lies in the fact that the interdependent world economy is a market economy. Socialist nations engage in trade on a market basis, buying and selling for whatever prices commodities will bring.

There is no international central planning. While socialism was looked at as a means for economic justice, it had no economic means for achieving its goal. Austrian economist Ludwig von Mises demonstrated that State ownership and central planning made economic calculation impossible. With no price mechanism to indicate the relative costs of land, labor, and capital, everything was planned on the basis of guesswork. Individual choice played no part. The prices to be determined were simply set by the government.

No proper allocation of resources was ever possible. Yet socialism was responsible for the emergence of the welfare state in Europe and North America. Even where the welfare state has been most actively introduced, it has proved a severe financial strain on societies. As much as socialism as been introduced, it can be said that the main reason socialism failed is the fact that it failed to realize its goal of economic equality through redistribution of wealth (Heilbroner & Thurow, 1982).

To fully understand socialism you must first understand the ideas of Karl Marx. Best known for The Communist Manifesto, Karl Marx was perhaps the most well known socialist. Marx gave the world an important gift of scientific knowledge; he was one of the giants of science. He studied human society so that he could revolutionize it and make it intelligent and decent.

He developed his own plan on how that could be accomplished. He started this plan by contemplating what the universe is made of and how it operates, from all this studying he concluded that the universe is inevitably going to revolutionize itself. The very genius of Marx lay in the fact that he gave the answer to those questions which the most advanced thought of humanity had already existed (Marx, 1932). Despite Marx withdrawal from active politics, he still retained what Engels called his "peculiar influence" on the leaders of working-class and socialist movements (Von Mises, 1969). The economic idea of socialism has seen many changes through its years of existance, so many in fact, that its impossible to explain in a 50 page report let alone an eight page one. Therefore, it would be hard to hit every single aspect and revolution of socialism.

But the above ideas were very important to socialism development and existence.

Bibliography

Goldhagen, D.J. (1996).
Hitlers willing executioners: Ordinary Germans and the holocaust. New York: Alfred A. Knopf. Heilbroner, R., & Thurow, L. (1982).
Economics explained. New Jersey: Prentice-Hall. McConnell, C.R., & Brue, S.L. (1990).
Economics: Principles, problems, and policies. New York: McGraw-Hill Publishing Company. Marx, K. (1932).
Capital: The communist manifesto and other writings. New York: Random House. Wells, H.G. (1912).
Socialism and the great state. New York: Harper and Brothers Publishers. Von Mises, L. (1969).