Introduction

The economic system of the United States as well as the form of government we have is something that has always been a topic for debate. There are many forms of economic systems that countries operate under. There have also been many different view points of what economic system is best for a particular country. I will be discussing the two most prominent when it comes to our country, Capitalism and Socialism. These are also the two economic systems that our country can best be defined as using.

When Donald Trump first got elected in 2016 and introduced his economic package many people felt the same way, his plan had many viewpoints aligned with capitalism. As with anything in politics there were people who disagreed with his economic plan. Unfortunately for Donald Trump, his plan never totally came to fruition. Halfway through his first term was when the Covid-19 pandemic hit and put a halt to any plans the president had for the country or the economy. Many people argue that his plan was beginning to work and that the economy was getting better. Jobs were being created, businesses were being started and existing businesses were expanding, and the country was beginning to export more products.

When Joe Biden was elected president he completely reversed Trump’s economic policies. He put the countries economic policies in a totally different direction than Trump’s. The problem with Joe Biden is his economic policies did not work the 4 years he was in office. He made the claim that Trump had put this country in such a bad economic position it would take more than one term to be able to turn it around. Now that Donald Trump was once again elected president he is making the same claims. His economic policies aren’t the same he had implemented during his first term and it has been hard for many people to determine whether or not they are going to have a positive impact on our economy.

The problem with Joe Biden’s claim that Trump is responsible for the economic condition of the country when he took office is that it isn’t true. Nobody knows what the economy in this country would have looked if he had a chance to see his policies all the way through his presidency. COVID-19 had a global impact on the economy, affecting not just the United States but the entire world. During the pandemic the entire world had shut down and a majority of businesses weren’t operating. The economic disaster that Joe Biden inherited was a disaster every nation in the world was experiencing. This disaster was a result of the pandemic and not because of Donald Trump’s economic policies. He changed many policies based of this claim, saying that his policies are what led to the economic crisis the world was experiencing.

The problem we are experiencing today is many people being attacked for their beliefs based on personal feeling and not facts. Joe Biden making these claims led many people to believe that the country’s economic position was caused by Donald Trump and his policies. Even after Joe Biden implemented his policies and the country saw inflation and the cost of living rise to record highs, Donald Trump was still being blamed. Because of these statements nobody was willing to look at the facts, that the pandemic was responsible and we will never now what kind of economic impact Donald Trump and his policies would have had.

Since Donald Trump and his policies were capitalism in nature, people started to once again think that capitalism was the problem. Capitalism and the economic standards it implements has been a topic for debate since this country was founded. It has led to many in the government trying to change the economic standards in this country more towards Socialism. Many prominent politicians, such as Bernie Sanders of Vermont and Alexandria Ocasio-Cortez of the US Congress, express viewpoints of Socialism and how they need to be implemented in our country. The new mayor of New York City, Zohran Mamdani, is another prominent socialist who has betaren in the news recently for winning and becoming mayor of New York City.

The United States economic system is currently neither capitalism nor socialism but is seen as a mixed economy. A mixed economy implements standards from both economic positions, without relying totally on one. For the majority of the country it has had a mixed economy. Many people this is the best type of economy to have and is what is needed while many still argue one or the other would be better. Many of these arguments are based on what they hear, or what their favorite politician is saying. They don’t know all the facts about what having one economic system or another or what that would actually mean for how the country would change. Before I made a decision on what I think is best for our country I think we should know about each one as well as the history of each policy and the impact they have had on our nation as well as other nations.

Capitalism

The United States considers itself founded with an economic system based on capitalism. Although many in government during its founding didn’t totally agree with capitalism they did agree with a lot of the standards the system implemented. The country considered itself a republic with an economic standard that had views of capitalism. Capitalism had been around for only a few hundred years when America gained its independence. In writing the constitution many founders noted how much of what was in the constitution aligned with ideas related to capitalism, therefore that was how this nation was seen. Understanding the details of what capitalism is will give a better understanding of why capitalism was considered our first economic system as well as why many people today consider it is the best system for our country. However, as the country has changed since its founding over 250 years ago, we will also be able to determine why many people feel this system won’t work in our country today.

Capitalism started to evolve around the 16th century however, the modern capitalism we see today didn’t arise until the 18th century. The beginning of the industrial revolution had a huge impact on how modern capitalism evolved. It also created some of the biggest critics against capitalism, such as Karl Marx, who wrote about the negative impacts of capitalism during the middle of the 19th century. The central system surrounding capitalism is free enterprise and private ownership.

During the industrial revolution many new factories began to be formed. This created many new businesses, which also called for a need if they were going to be operated and overseen. Capitalism called for the people to own and control how these businesses operated. As a republic nation that was founded on the people having the power and not the government, capitalism was an economic system that felt that these views would be closely matched. That it gave the power and control of the businesses to the people by granting them private ownership. Granting this private ownership meant that these owners had the ability to operate their business in a way that was in favor of their own self interests. The sole purpose of these businesses was to gain a profit and how the business operated was based on the best ability to obtain this, no matter how their decisions were perceived.

Even though the businesses were privately owned and the owners made all of the decisions of how the business was run certain aspects were out of their control. Pricing of products were dictated by the market and by supply and demand. Depending on the product that a company was producing will determine the demand for that product. In order to produce a certain product businesses need to obtain certain resources, which are purchased from other private companies. In a capitalist system all these companies are privately owned and acting in there own self interest, which also means acquiring more business to remeain profitable. Since businesses were acting in their own self interest their goal was to sell these products in the best possible way to be profitable. These meant shopping around for resources they needed to operate and acquiring the best deal possible.

This competition capitalism created had an effect on the prices of products, the location a business would open, where a business would acquire resources needed to operate, and the wages of employees. Competition made it possible for people to have different options in the products and services they purchased. If they are not happy with a product from one company they have the ability to go to another company and purchase the same product. This also has an impact on how a company prices a product. A company wants to keep a customer loyal to their company and in order to do this they need to create a product or service that is high in quality and reasonable in price.

There are different pricing strategies a company can use, such as creating a cheaper product at a cheaper price or creating a more durable product at a higher cost. Each strategy will appeal to a certain market or group of people. Since companies are profit based in a capitalist system they are going to use strategy that gives them the highest profit. Competition is what makes these different strategies an option for the company and what gives the people the choice on what type of product or service they want and where they will purchase. All of these are factors used when a company determines what the retail price of their product will be.

In a capitalist system the owner of a business makes the decision on how much to pay its employees. However, these decisions are not completely up to the owner themselves. As with the price of a product, competition also affects the wages a company will pay its employees. If an employee is not happy with the conditions it is working under, or the pay it is receiving, they have the option to quit and go work for another, competing company. If a person has a particular skill that is sought after by companies than they are able to have options to work where they choose and basically set the pay they want. Companies are always looking for employees who know how to do their job and who are dependable and hard working. When a company finds an employee that meets these standards they will do what they can to keep this person employed with them. They also know that another company will hire them and pay more if they aren’t willing to, therefore competition sets the wages of employees.

Capitalism is also a system that runs with very little, if any, government oversight. Because of this and the fact that a company is operating in its own self interest, it may make decisions that have a negative impact on society, the environment, or the government. Because there is no government oversight these companies are allowed to act in there own self interest without regarding the impact there decisions will have. This also allowed there employees to work in conditions that may not have been suitable or completely safe. Without government programs overseeing working conditions, such as OSHA today, many conditions may not have been the best for the employees there. These conditions went unchecked because the companies needed to be profitable and the people needed a job.

Socialism

Ideas related to socialism can be found as far back as ancient times, even as far as the time before Christ. However, socialism we see in modern times became popular in the 19th century as a result of the popularity capitalism was receiving. Many critics of capitalism, such as Karl Marx, emerged during this time which helped the ideas of socialism to become popular. During the early 20th century many forms of socialism began to gain popularity all over the world, especially social democracy and communism. In the United States, especially during the last 20 years, a form of socialism known as democratic socialism has gained popularity.

Democratic Socialism approval has been growing in the United States and is the form of socialism that I will talk about as it directly affects us. The basic idea of all forms of socialism is equality for all people living together in a society. This is achieved through public ownership of all major businesses and natural resources, which is in direct opposition to capitalism. The idea of socialism is to put the control of all major businesses and resources in the hands of the people, therefore abolishing the different economic classes of people.

Giving the people control of these businesses and resources and is achieved through elections. The government essentially takes control of all major utilities, businesses, property, and everything else essential to the people as a whole and determines how they will be operated and distributed based on what is best and fair to all the people living in the community. Unlike capitalism, which operates on self interest and obtaining a profit, socialism operates based on what is best for the community as a whole, regardless of profit. Wealth is distributed evenly among the people in the community therefore everyone lives in the same economic class. Through the election process the people are able to decide who they want in government making these decisions based on who is more aligned with their own interests.

In a democratic socialist system, such as the one gaining popularity in the United States, abolishing capitalism is a main goal. Some of the main ideas of this system are free college education and universal healthcare. Although socialism believes that all major businesses should be owned and operated by the government, private ownership is allowed. However, businesses that are operated by private ownership are heavily controlled by the government as well as being extremely taxed. The government control of these businesses ensures they are acting in the best interest of the people as a whole instead of their own self interest. Taxing them at a high rate ensures they will not obtain too much wealth as well as providing funds for programs that act in the interests of the people, such as universal health care.

The idea behind socialism is that everyone will be living happier as nobody will struggle and everyone will be equal. Although many forms of socialism are too extreme for the views people have today many feel that democratic socialism is the answer to the problems we are facing today. Because the focus of a democratic socialism is on society as a whole everyone’s needs will be met. Wealth is distributed equally among everyone which will prevent people living in poverty that is created with a capitalist economic system.

Issues With The Two Economic Systems

Capitalism

The problem that many people have with capitalism is that it creates a society where a small percentage of the population controls the majority of the wealth. Because people are able to own and operate businesses based on their own self interest they essentially do so at the risk of going against what is best for society or the government. Business owners don’t have any regulations they must follow so employees may be working in unfair conditions or potentially be underpaid.

Other criticism’s of capitalism are the fact that it creates poverty. A lot of people are unable to find work in this system and many people who do are not paid a wage they can live off of. Critics say that these employees are not paid a livable wage so that the owners are able to obtain a larger profit. When an owner operates a business based on their own self interests and doesn’t look at the impact their decisions have they are creating a society with income inequality. Not everyone is given the same opportunity and once a person is in poverty it is almost impossible for them to get out of it.

Another issue with a capitalist society is the possible harm against the environment and the society. A major problem with a lot of factories and other industrial factories is the emissions they release as well as finding a place to dump their waste. Many of these factories were using chemicals that were harmful to the environment. Because of the costs associated with dumping this waste legally was so expensive many companies would illegally dump them. Without government oversight these companies wouldn’t be held responsible for this illegal dumping that would cause damage to the environment. Without having guidelines to follow many companies may not know how much damage they are causing to the environment or they may not even know how to properly dispose of their waste. All the private business owners look at when dumping waste is what is the cheapest way to do it that will not cut into their profits.

Critics of capitalism also raise an issue with the power private business owners have through their wealth. This has been an issue we have seen in the history of our country where many wealthy business owners have the capability to control people in government through their wealth. This allows them to basically make the rules and laws of the country they are operating in, making it easier and more profitable for them to do business. Because private business owners are responsible for a majority of the income and wealth that a country receives as well as employing a majority of the nation many politicians will appease them for fear of losing their business. Many people in society will follow what these business owners say for fear of losing the jobs they offer.

There are many more issues critics raise when it comes to capitalism but these are the major ones that are prevalent today. These issues that critics say are caused by capitalism is the reason many people are supporting democratic socialism today. Although many of these problems were much bigger at the start of the industrial revolution many feel they are just as problematic today. Critics claim that there is no way to fix this economic system and it will never work in a developed country and the only solution is to abolish it. Once it’s abolished the answer is socialism. Socialism however has it’s own set of problems and creates issues that are just as damaging as the ones caused by capitalism.

Socialism

One of the biggest and most obvious problems with socialism is that it gives the government too much power and control. When governments gain that much power and control it almost always leads to corruption and poor decision making. History has told us that when a government gains that much power it almost always leads to corruption. The ones in power start to make their decisions based on what is best for them and the government. Laws are created that will allow the ones in power to stay in power and ensure that society works for the benefit of the government.

The basic idea of socialism is that the people in government are there to work for the people and ensure that everyone is considered equal. This is achieved by the government controlling the wealth of the country and distributing it to the people equally. In a Democratic Socialist economic system the government owns most of the major industries that are essential to the people, such as medical care, utilities, and education. Many of these services are offered to everyone as a free service. Since private ownership is still allowed this idea creates issues with many of the people.

The idea of equal wealth distribution and offering essential free services to everyone is achieved through taxation. The more money you make the more you will pay in taxes, making the idea of private ownership no longer appealing. Majority of people go to college so they can learn a skill that will allow them to work in a field that will pay them well. Many even strive to own their own business and expand that business so they can enjoy a life of wealth. This economic system takes that determination away. Everyone is paid the same no matter what they do for a living because anyone who does make more money then someone else has to pay that extra amount in taxes.

The issue with these policies is that it causes many businesses to leave the country to go somewhere with more lenient tax laws. We have already begin to see this happen in our country without these policies being implemented. Because many lawmakers agree with socialist policies they feel that the answer to government spending is to raise taxes based on the amount they make. This creates the problem of having the opposite effect than what it intended and hurts the economy.

One reason raising taxes hurts the economy was mentioned earlier, businesses end up leaving to go where there are better tax laws. It doesn’t help to increase taxes if there is nobody to increase the taxes on. The jobs that business created are no longer there. The tax dollars that would have been generated by the jobs that business created are no longer there either. This also creates the problem of needing the product or service that business offers. Since many of these businesses end up going to a different country we are forced to import many of our products. We now have the problem of relying on imports and at the same time decreasing the amount we are exporting, causing much of our money to end up leaving the country.

Conclusion

These two economic systems are what make up the system we use in this country. Both have their benefits and issues and both are based on opposite ideas. Capitalism creates a society with different classes of people where socialism abolishes classes and considers everyone equal. Our society is split on these two concepts and has caused many problems in our society. The problem we have now is that no matter who wins the election and the policies they put in there is going to be half the country that doesn’t agree. People have become so determined that what they believe is the right solution that it has caused people to live in fear of expressing their beliefs. I can’t say if my conclusion is the right answer or that it is what will be best for our country, all I can do is express my opinion on what I feel is best based on what I have seen and what I believe.

The problem with both these economic systems is that you are never going to get everyone to agree on one that is best for our society. They both create the same problem, many people are going to look at each system as being not fair to the people and causing more harm than good. Because everyone has a different opinion and we live in a country where we are free to express our different ideas we will never agree on two totally different concepts.

Capitalism creates a society where private owners and the wealthy run the country and essentially make the decisions. There decisions are going to be made based on what is best for themselves without considering the harm it will cause. Socialism, however, creates the same problem. The government runs the country and makes all the decisions. The ones who are wealthy and private owners end up losing more in this society. Each system benefits half the people in this country and will never agree with the other.

I have always felt that the ideas of capitalism create a more economically stable society. This doesn’t mean that I agree with all there concepts and is why most countries, including our own , use the concept of a mixed system, ideas from both. I agree with the overall concept of capitalism and feel that is what is best for our economy but we need to implement one crucial concept from socialism, a government who works for the people and implements policies to ensure no power is being abused.

One of the biggest problems with socialism is the concept of continuing to raise taxes. It not only creates the problem I discussed earlier but it also creates the problem of not having any money for investments in our country. If many of these businesses staying this country it would create a number of jobs, increase exports, and decrease our dependence on imports. This generates more money available in the economy that can be used for investment in new businesses and expansion of existing ones. This also gives people the incentive and determination to want to learn a skilled job.

We still need a government to make sure these businesses follow the law and aren’t cutting corners or taking advantage. The problem we have today is that our government is trying to take control and power and blaming the wealthy for our country’s problems. The problem I have is that nobody should have all the power in this country, the government or the wealthy. The power of this country is supposed to be given to everyone. Instead of trying to blame people for the problems or come up with policies that harm people you think are the problem, we need to come up with a solution where the economy does well by allowing it to do well. Our country has started implementing policies based on socialism and it has already done a lot of harm to our economy. Instead of worrying about what system we need to implement we just need to focus on what is going to work and what isn’t, no matter where the ideas come from.