Think about capitalism and socialism here in the US Under wh

Think about capitalism and socialism here in the U.S. Under what circumstances (what programs, institutions, markets, goods or services) might capitalism work best and be appropriate. Under what circumstances might capitalism not work very well? What about socialism? Does it have any place in the U.S.? When might it be or not be appropriate?

Solution

Capitalism was unsuccessful as an economic order in 1933. The ‘Employment Act’ had mirrored a national attitude which generated an institutional arrangement for successful capitalism post the World War II. Capitalism advances and changes & so must the constituted institutional arrangements. The institutional arrangement of the private sector is chiefly market-driven (its evolution is propelled by agents working in their own interest). This evolution can weaken the hurdles to instability & to dynamic ineffectiveness. Such weakening has to be counteracted from time to time via legislated alterations in the institutional arrangement. The objective of such institutional alterations is to maintain the dynamic efficacy of capitalism. The institutional arrangement of managerial capitalism lessened economic insecurity & augmented the performance of the economy so that an unsuccessful economic order was converted into a successful one. Similarly appropriate institutional alterations are required to convert the insecurity-causing funds manager capitalism into a new arrangement favourable to successful capitalism.

Though the U.S economy is a capitalistic one, there are particular features of socialism in which the state works to ensure the welfare of the citizens. For example, there is a social security order which gives a payment to employees post the age of retirement.

Theoretically, pure socialism appears to be an ideal order in which no person exploits another & each one would be equal. But, this order has been attempted in other nations & has been rejected because of its impracticability. It appears that though each one was equal ,in reality, there existed a hierarchy with the statesmen & their comrades at the pinnacle , leading to inequalities between individuals, & there were too many scarcities of even the essential commodities.

Whereas U.S capitalism hasn’t brought about an equivalent distribution of wealth, each one is free to seek something better & work in his own interests. Instead of looking to socialism, a recommended way to tackle market distortions is to have the state play a bigger role & creating hurdles so that corporates do not take on huge risks & only gain the rewards, whilst the government gives a last-resort help to them if things fail to work out.