Student Paper SP002-09
Spring 2000, Section I
Reviewer Comments

Capitalist and socialist theories have dominated the rhetoric of western thought for the past 200 years. Many have argued about, and countries almost came to war over, which one was the best system and which one works for the greater good of the nation. In this essay, the ideas of socialism and capitalism are discussed in the realm of education, labor and wages. Is either system perfect, can either system stick to its theories and provide what is necessary for the nation, or must a compromise between the two systems be created in order to ensure the greatest amount of prosperity for a society?

Pluralist ideas were enumerated by men such as Adam Smith in his "The Wealth of Nations" in 1776 and by Thomas Malthus in his "First Essay on Population" in 1798. Malthus perpetuated the idea that each man had to provide for himself, and that no one should help him if he failed in this endeavor. He felt that food is limited but population grows exponentially. If man keeps growing exponentially and food is limited, eventually man will run out of food. He believed that society should not feed those that cannot get food on their own because they are part of the population that keeps producing kids without worrying if they can feed them. He says that giving these people food will just encourage them to have more children, and in the end the population will outgrow the amount of food that can be produced. If you let these people starve, only the hardworking people, those willing to work and be productive towards society, will survive.

This is the essence of pluralism, or democracy and capitalism. Man is responsible for himself He has his two hands, he can choose to produce what he is good at. Perhaps if he works hard he can acquire enough money so that he can hire other people to work under him, eventually he could own a factory and not have to do physical labor anymore. This is the trend in Smith's arguments. He believes that society is divided based on labor. A man does labor that is necessary for his community, he produces what his society needs. Once labor is divided, if he wants to enjoy more wealth, he must get it from "the labor of other people, and he must be rich or poor according to the quantity of that labor he can command" (Smith). This is the basics of pluralism. Man prospers because of his own initiative and his use of labor. Those men who are good at this are the ones that will have more wealth, those who are not so good at this will be destined to be laborers. According to Malthus, those men who are not good at this process should not be helped, they should be forced to survive on their own, without any assistance from society.

Socialism or hyper-rationalism, is defined by the labor, not the owners of the labor. It is men working as a community to provide for each other instead of each man providing for himself Early socialists who noticed something was wrong with the capitalist society were men such as Blanc and Owen. Blanc felt that private property was a form of theft, that many men have way too much and therefore, private property should be abolished. Owen founded communities where every man owned part of a factory. They were all in the business together. Other socialists include Marx and Engels, who were considered revolutionary socialists. They supported the beliefs of previous socialists, but they were willing to inspire revolution in order to achieve it.

In the rest of this paper, "The Wealth of the Nations" by Adam Smith and the "Communist Manifesto" by Karl Marx and Frederick Engels will be used to compare the strengths and weaknesses of the socialist and capitalist system. One of the differences between these two systems is their stances on education. Adam Smith felt that giving education, such as higher education, to those who cannot afford it was a bad idea. He says that in "professions such as law and medicine, if an equal proportion of people were educated at the public expense, the competition would soon be so great as to sink very much their pecuniary reward. It might not then be worth any man's while to educate his son to either of those professions at his own expense" (Smith). Marx and Engels disagree, they believe in giving education to anyone who desires it. They want "free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc" (Marx and Engels). Under capitalism, education was seen from a market point of view, not as a tool that could benefit the community. Pure capitalists saw education as a benefit to those who could afford it, and child labor as just another part of the system, if the market demanded that children fulfill certain jobs, then this is what must be done. In a socialist system, like the one that Marx and Engels desired, education was to be given to the masses. They knew that education was a huge benefit to those that possessed it, and as socialists were interested in providing equally for the whole community, and in particular the workers, they were interested in giving everyone a chance to have an education. As time has passed, it seems that the educational theories of the socialists has won Out. In most industrialized countries, education is required at the most basic levels, and then an open opportunity at the higher levels. Education makes people better citizens. For instance, if someone can read the laws of the land, they are better able to follow them. As for democratic systems, without being able to read and write, how can one shop at grocery stores for competitive prices or vote in local elections. The practice of providing education for all the people in the society seems better suited to the advancement of economics and government.

Another area that the socialists and the capitalists disagree on is wages and labor. For a capitalist system labor is capital. A man might start producing shoes on his own, but when he makes enough money he can hire other to do his work. Then he can have a factory, and begin to produce shoes in earnest. Pretty soon he is not actually making any shoes, but he is reaping the profits from the shoes his laborers are making. Unlike the man when he was making shoes on his own, the laborer does not own the shoe that he is making. He likely only knows one part of the shoe-making process, and his time and skills are paid for through his wages. The more laborers the employer has, the more money he can make, the more wealth he can acquire. This labor that he is using receives wages, and according to Smith these wages are based on the market.

In every society there is "an ordinary or average rate both of wages and profit in every different employment and stock," and this rate is "naturally regulated" (Smith). Laborers are paid according to how much their particular job and product is worth. Smith even contends that employers will try to pay their workers less than the naturally regulated price if they can, but the workers are free to protest if they are not receiving enough money upon which to live. If a man feels that he cannot subsist upon the amount he is getting paid, then he can move. Competition provides for a healthy society. The ability of the laborer to move to where better wages are gives him power over his own destiny and keeps industry at its best, because it also has to adjust with the labor market if it wants to continue producing goods effectively.

Socialism takes a different stance on the issue of wages and labor. Marx and Engels violently oppose those men with power in the capitalistic sense of the word. They oppose the men who own the factories and have the laborers at their whim. Capitalists have said that socialists take away man's right to gain more power through goods and appropriation of capital. Marx and Engel respond saying that "Communism deprives no man of the power to appropriate the products of society; all that it does is to deprive him of the power to subjugate the labor of others by means of such appropriations" (Marx and Engels). They wanted to see the workers take over the factories and become the ruling class of society. Marx and Engels wanted to "centralize all instruments of production in the hands of the state, i.e., of the proletariat organized as the ruling class; and to increase the total productive forces as rapidly as possible" (Marx and Engels). Each man will own part of the factory, he will actually own the fruit if his labor, his wages will come from this ownership, and there will be no competition among employers or employees.

With everyone united under one social class of people, where the man who produces the goods will actually own the goods, political oppression will cease to exist because capital, or power, is no longer in the hands of the few. They feel that this will lead to the abolishment of the exploitation of the individual, which leads to the end of "exploitation of one nation by another" and as the "antagonism between classes within the nation vanishes, the hostility of one nation to another will come to an end" (Marx and Engels).

Both of these systems, capitalism and socialism seem based upon sound logic. For capitalism, men are encouraged to produce quality products and to give competitive wages out of a desire for more and more wealth. He cannot prosper unless he provides what the market wants from him. In the same way, the laborer can shop around for the best wages and eventually save up enough money to maybe someday become an employer of other men himself In the socialist system, every man is his own employer, he works in a factory owned by the people, makes wages set by the people, and buys products made to the people's standards. In a perfect world, both of these systems would work wonderfully, but in the world we live in, the system that works best for the government and economics is a combination of the two. If a man has something to look forward to, some reward at the end, like the notion that he could someday own his own factory, then he will be motivated to make as much money as he can, do the best possible job. But employers are not always scrupulous, they are just as greedy as the worker, and are willing to cut wages and jobs if it is in their best interest. The government has to step in at one time or another to ensure that there are jobs available for the worker to have. For instance, during the Great Depression, there were millions of men and women ready to work, but no jobs for them to have, the capitalist system had no way to fix this problem, eventually the government decided to step in and do something, which is definitely not following along with Smith's theory of letting the market regulate itself. At times in every society, either capitalist or socialist, the government has to step in and fix the problems, no system is perfect.

This was also exemplified under the Communist system. In the early 1960's countries like Czechoslovakia could not provide all the consumer goods their system said they would. They wanted to institute more freedoms to discuss other ways things could be done, instead of accepting the party line. Competition of ideas and thoughts were introduced in order to fix the problem. Socialist structures had problems too, and they used capitalist means to try and solve them.

Both the capitalist and the socialist system sound like they would both work really well on paper, but in actual practice, neither of them can work as a pure system. Nations like the United States, who boast about their capitalist status, have elements of socialism, like Social Security, welfare, and worker's compensation. Communist countries like the USSR found out that they could not survive on a totally socialist system, that some elements of capitalism needed to be introduced in order to provide best for the people.