(Considering several questions around some of my thought process around liberalization, wealth creation and growth for all, I am going to present a condensed form of my lecture on this subject in "2 minute digest" series. This is the first part. Comments are welcome here or in any other forum as appropriate).
Capitalism and Socialism are 2 essential pillars of human eco-system. There is no one one model fits all in the Universe and both models back each other up. The obvious definition explains it all - Socialism ensures that everyone gets a fair share and Capitalism ensures that wealth is created so that it can be distributed. If it all that simple, then why do systems fail?
Systems fail because:
1. They do not complement each other sufficiently
2. Greed and impatience that is inbuilt in human instinct
3. Manipulated and immaturely introduced macro-economic policies
In the longer term, all three reasons play a equal role in failures; just that at some touchpoints one of them is highlighted more. In subsequent passages I will explain each one of them in detail.
Before we examine the structures of socialism and capitalism, it is imperative to understand that these social structures did not necessarily come out in the seventeenth century. While they have existed in preliminary forms (Robinhood was an early socialist!), both these structures came out as a fallout of the industrial revolution. As the industrial revolution laid the foundation to capitalism, it also led the way to a severe rich and poor divide, thus leading to a strong belief in socialism.
The second important fact is to realize that there has to be constant balance of one over the other. If either of the system progress on its own is unchecked, it will ultimately lead to a collapse because of a bunch of factors - most of which can be directly correlated to the three reasons stated above.
And the third important fact is to understand that International politics and diplomacy are not considered clearly in the underlying theories of these systems.
In the next part let us discuss the reason-1 in detail.
Capitalism and Socialism are 2 essential pillars of human eco-system. There is no one one model fits all in the Universe and both models back each other up. The obvious definition explains it all - Socialism ensures that everyone gets a fair share and Capitalism ensures that wealth is created so that it can be distributed. If it all that simple, then why do systems fail?
Systems fail because:
1. They do not complement each other sufficiently
2. Greed and impatience that is inbuilt in human instinct
3. Manipulated and immaturely introduced macro-economic policies
In the longer term, all three reasons play a equal role in failures; just that at some touchpoints one of them is highlighted more. In subsequent passages I will explain each one of them in detail.
Before we examine the structures of socialism and capitalism, it is imperative to understand that these social structures did not necessarily come out in the seventeenth century. While they have existed in preliminary forms (Robinhood was an early socialist!), both these structures came out as a fallout of the industrial revolution. As the industrial revolution laid the foundation to capitalism, it also led the way to a severe rich and poor divide, thus leading to a strong belief in socialism.
The second important fact is to realize that there has to be constant balance of one over the other. If either of the system progress on its own is unchecked, it will ultimately lead to a collapse because of a bunch of factors - most of which can be directly correlated to the three reasons stated above.
And the third important fact is to understand that International politics and diplomacy are not considered clearly in the underlying theories of these systems.
In the next part let us discuss the reason-1 in detail.
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