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If Capitalism is Superior to Socialism, Then....

Updated on March 26, 2012

If capitalism is superior to socialism, then why do over 10% of Russians (those unable to pay under the table "costs") in modern capitalist Russia go without healthcare? Under socialism the Soviet health system was the envy of working people in the capitalist world, as it was free to all, well funded, modern and efficient.

Why is it that in GREAT Britain there are an estimated 1 million homeless people? Yet in the GDR/East Germany, homelessness was virtually unheard of. In the GDR rents could not exceed 10% of a worker's salary. Eurostat figures reveal a full time worker in Britain earning the minimum wage will earn just over £1000 per month. Yet in England and Wales the average cost of home rental is £599 per month, or 60% of a workers salary. That would be okay if we didn't have family's to feed and clothe.

The miserable conditions of workers in capitalist countries is often justified in terms of economic performance; low wages and poor living conditions are explained away by the need for the nation to remain "competitive". Since the 2008 financial meltdown, the collapse of banks, increasing unemployment, increasing homelessness, increasing living costs are not even able to be offset by claims of growth. There is no growth in the imperialist countries. but, there is growth in China, where however imperfect "Socialism with Chinese Characteristics" is, growth is assured by a massive state sector which is being put to the building of infrastructure. This not only maintains economic growth, but brings social benefits in the shape of homes, schools, hospitals and transport links (all of which are being built at a speed which both highlights and shames capitalist inefficiency). The truly capitalist countries lack this mechanism.

This modern recession/financial crisis is not a new phenomenon, but an inherent feature of capitalism. When the great depression hit, capitalist economies collapsed, from the US to Germany unemployment soared and living conditions deteriorated. Yet in the same time the economy of the Soviet Union flourished due to socialist planning. From 1928-1940 Soviet National income grew by around 500%. In the height of the great depression, between 1929-1933, Soviet national income increased from 29,000,000,000 Rubles to 50,000,000,000 Rubles.

Yet despite of the success of the Soviet economy capitalists have attempted to distort history and use it as an example of the inefficiency of socialism. This is akin to arguing that black is white. The demise of the Soviet Union is further proof of this. We are often told that the Soviet economy "stagnated", but no figures are given to support this. When the Soviets talked about stagnation it was as a relative term, 3-4% growth was deemed as stagnation relative to the success of the Stalin era, the fastest and largest economic growth in history.

Furthermore, it was between the years 1987-1991 that the Soviet Union experienced significant market reforms. This coincides with the first ever post-war contraction of the Soviet economy. In 1990, soviet figures estimate this contraction as -3.9% and western figures as - 2.4%. The following years estimates were -15% and -12.8% respectively. Clearly then, we see that the more liberalized the economy became, the worse it performed.

Of course this short work makes no claim to be an exhaustive study, but is a trail of thought which reflects an exercise in human consciousness. One may be lead to reflect on Mahatma Ghandi's words "A nation's greatness is measured by how it treats its weakest members".

In capitalist countries society's weakest members: the poor, the children, the elderly are shown to be treated at worst horribly and at best indifferently. The true great countries are the socialist countries, those existing today such as Cuba and those which now exist only on the pages of books and in the memories of the people, such as the mighty Soviet Union. Most have long known socialism to be morally superior but there is also a strong case to be made for it's productive superiority.

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      Sergey 3 years ago

      Well, I was born in the former USSR and lived there until it fell apart. In practically all but few respects I favor socialism system even such faulty as Soviet was over Capitalism in which I currently live.

      1. There was equality and people were paid living salaries.

      Factory manager could get paid only 150% more than senior worker and my grandfather who was like a CEO in modern firm just under General manager was paid as much as senior worker.

      2. We had high quality and free kinder gardens more like schools for toddlers and preschoolers of same size actually as a school), free schools, free colleges and universities. Students actually were paid stipendiaries which were higher for top students. Free and high quality healthcare. Every student working profession or university grad got a job after graduation. Upon retirement pension was guaranteed and so was apartment. Size of apartment was determined by family size. Apartment/ flat was virtually free. So were various services and utilities.

      Young unmarried people either lived with parents or could get place in dorms until they get married when they became eligible for apartment.

      3. There was assurance that we could become whoever we wanted to be and work at chosen profession. There was assurance in the future and no fear.

      4. The only downside was lack of goods in stores after mid 70's. I believe it has a lot to do with huge military expenses and it is true as most of the money went into heavy industry not industry that manufactured goods and I totally understand that cause we were threatened and invaded from the West 3 times over 130 years period starting with Napoleon. It was kind of paranoia to never allow this again.

      Society mood was much better form what I see here or in modern Russia.

      For me it is a no brainer. I would put even such socialism ahead of any Capitalism especially that of Anglo Saxon variety.

    • profile image

      Ydra 3 years ago

      It's so nice to read the work of a fellow socialist. I'm in a history and philosophy class, and there are frequent seminars in which we discuss these topics. I lead a seminar on the Industrial Revolution, my thesis being that: The majority of the Industrial Revolution (c.1750-1850) resulted in worse lives overall for the majority of people. This was due to deplorable working conditions, living conditions and monotonous division of labour for the proletariat class. Basically no one supported my point, saying that"capitalism always works itself out in the end." Yeah, because all the ruined lives of the lower classes don't matter, just as long as I live in a society with all my precious technology today. I end up getting really angry with eveyone because they're all ignorant capitalists who think that "progress" is more important then helping those in need. In my opinion, progress is not improving our technology (of which we already have a ridiculous and unecessary amount). Progress is giving every human at least the bare necessities to live. Progress is socialism.

      It's just nice to read the work of someone who is on my side! And excellent quote by Ghandi, I might add.

    • Bob Zermop profile image

      Bob Zermop 4 years ago from California, USA

      Thank you for your thoughtful response and also for the link to your hub on the famines; I'm not familiar at all with that history.

      The reason I mentioned the Great Leap Forward was because I see it as identical to the Stalin reforms, besides the fact that it failed dramatically. In both cases, unless I'm mistaken, the reforms came hand in hand with heavy wealth redistribution and suppression of free speech, as well as some degree of famine. Though you said that the USSR famines were not the fault of Stalin policies (and I'll take your word for it), I included them in that list anyway because of its clear parallel to Mao Zedong's China.

      Because of the similarites between the USSR and MZD's PRC, I'll direct some of the criticisms that I think apply to both to the PRC, as I'm far more familiar with those policies. Though it can certainly be said that the USSR grew incredibly fast, that growth coincided with repression of culture and speech, as well (it seems to me) general unhappiness in the poplace, just like in China's Red Revolution. Is socialism inextricable from tyranny, either by one person/party (Stalin, Mao) or by the majority? I think so.

      On a purely economic standpoint, I argue in my hub that though capitalism can't grow as fast in the beginning as a socialist structured one, it can grow much more sustainably and innovatively. If that's the case, why would socialism be preferred? There are certainly many critisms to be made of capitalism, but ultimately I think those are resolvable (ladder of opportunity, safety net, etc.). As I said in my hub, I think the problems of socialism (inextricably tied to tyranny, unsustainable, lack of indvl rights) are unresolavle without the system becoming capitalism. Please feel free to point out any ambiguities in my response!

    • Comrade Joe profile image
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      Comrade Joe 4 years ago from Glasgow, United Kingdom

      Hello. First off it is nice to receive a polite and non-adversarial critique. I will try to deal with the points you raise as best as I can.

      Just to touch on the statistics issue. I have had mixed responses on this website on this issue. On occasion I have provided references and links and had people complain that this a journalistic rather than academic forum and that it detracts from presentation. Recently, I have tended to ignore that criticism and just use references. The precise stats used here the homelessness and wages in the UK stats I researched at the time, I don’t have the source saved, but I am sure I can find it easily enough if need be. The rents in East Germany stat actually came from a university lecture, but it is also quoted on page 18 of. ‘Stasi Hell or Workers Paradise’ by John Green Bruni de la Motte. Statistics on Soviet growth were taken from official statistics as quoted by Stalin in ‘Problems of Leninism’.

      The latter alludes to your other point being correct, that this was indeed the Stalin era. I’m first off not going to sit here and day there was no repression, there definitely was. However, wildly exaggerated and often totally wrong is the representation of the era, partly owing to cold war propaganda and partly to Khruschev’s infamous (now discredited and disproved - see the American academic Grover Furr‘s recent work Khruschev Lied)) ‘Secret Speech’ to the 20th Congress of the CPSU. If I may also take this opportunity to shamelessly promote another of my hubs as it is on the Ukrainian famine. https://hubpages.com/politics/Holodomor-The-Ukrain... It is only a brief overview of the topic, but covers the basics. My information was taken from the book ‘Fraud, Famine and Fascism: the Ukrainian Genocide Myth from Hitler to Harvard’ by Douglas Tottle and 'Stalin: A Political Biography' by Isaac Deustcher

      Where there definitely is a difference with the great Leap Forward is that Soviet industrialisation by-and-large worked. Where as the Chinese fell short of targets and relied on rudimentary machinery and technology, the Soviets really did industrialize, we know the nation became electrified, that they erected millions of homes, built new factories, schools and hospitals, sent men in to space, built state of the art weaponry. We know this because it was all witnessed, observed and recorded on a large scale. The Great Leap Forward was not so great and did not really move forward, Soviet industrialisation turned a farming state into a mighty superpower.

      On the issue of Chinese growth. Of course the Chinese system can be argued to be capitalist and in many respects is. But on the other hand, there is a massive state sector which in the current climate is able to maintain and fuel growth by central planning and massive infrastructure projects. I would suggest this is what keeps China on steady ground as the markets falters today. Under Mao growth was slower, but it did grow at a decent rate. Where Mao exceeded was with regards to social indicators: life expectancy of 40 in the early 50’s reaching 64 in only 1974, infant mortality falling in the same period from 195 per 1000 to 52 (Economic |Growth and Human Development in China by A Zhang). So while growth under Mao was slower, we can see it was more equitably distributed.

      I hope I have covered all the points raised, but if not feel free to ask away. I will also read your hub now.

      Cheers.

    • Bob Zermop profile image

      Bob Zermop 4 years ago from California, USA

      Hi, Comrade Joe. Interesting points you make on here; as an American, I rarely meet socialists and am looking forward to picking your brain a little. :D

      I have no argument with all of the statistical criticisms you have of a few current capitalist societies (healthcare, the homeless rate in Great Britain), and will take your word that the statistics you cited for the Soviet Union are correct. There's no disagreement from on anything you've cited.

      However, I'd like to add a few points to the discussion, starting with the Soviet Union. (Just a note: I'm no professor, so feel free to refute any statistics I cite.) Though for the sake of discussion I've said I believe that the Soviet Union's economy flourished from 1928-1940 (No offense intended, I just don't know.), that's also the time period where Stalin was in power. Repressive policies of free speech, of culture by Stalin's policies, right? From what I know, though industry and infrastructure "took off", there were also times of heavy famine due to government policies. I'm not very familiar with the USSR's late history, but here's what I'm speaking of: http://en.wikipedia.org/wiki/Droughts_and_famines_... The first thing it reminded me of was in Red Revolution in Mao Zedong's PRC and the failures of the Great Leap Forward, which I am familiar with.

      China is another example you mentioned, specifically modern-day China. Though in the past couple of decades China has grown remarkably fast, this was after Deng Xiao Ping opened the doors to the world and incorporated free market ideas into the PRC. Though still controlled by the PRC today, China is in many ways a capitalism today. In many ways I actually see it as too capitalist, blatantly favoring the wealthy (just look at the wealth gap), though I think the reason that's happening is due to the C Party's control.

      I have more to elaborate, but I don't want to take up an enormous block in your comment section at one time, so I'll leave it at that for now. I believe that the problems that I detailed above are inextricable from socialism as a system, and that would be the reason I identify as a capitalist. If I didn't make my reasoning clear, please see my hub:

      https://soapboxie.com/economy/Why-capitalism-works... .

      You've written an interesting and thought-provoking hub, and I look forward to your response!

    • Comrade Joe profile image
      Author

      Comrade Joe 5 years ago from Glasgow, United Kingdom

      The main problem i see with a hybrid system is the instability. As the economy is underpinned by the free market it remains vulnerable to fluctuations. So in the first instance, private sector jobs are liable to be insecure if industry's only goal is profit, when there is a period of non-profit jobs will go. But more than that, the bigger issue is that the welfare state will always come under attack, as is evident in Britain just now. The ruling class continue to fight back and claw away at all the provisions the workers have gained over the years. That is the fundamental problem with social democracy; there is a contradiction and conflict of interests between the continuation of a profit driven economy owned by the capitalist class on the one hand and a commitment to welfarism and egalitarian principles on the other. The latter will always come under attack from international finance capital and the national bourgeoisie; even Sweden has been drifting to the right in recent years after being almost a poster boy for welfarist social democracy. For this reason and others I believe our ambition should be no less than a worker's state.

    • Hayley Richardson profile image

      Hayley Richardson 5 years ago from London, UK

      I think we need a hybrid system between the two as both have their faults and their benefits. I believe in social welfare, free healthcare and education, plus I think that core industries and the banking system should be privatised, but I support a free market for everything else.