We're debating the two in my history class right now and the real question is -

"Which form of government would be better for our nation? Why?"


I support socialism. Marxism ftw. If you're wondering why, well, look at China. It's a nation on the rise. Why not? I've been hearing alot about "China being the next US" because everything's made in China. Every other nation depends on them and in several years everyone will. My point is, the first question people ask is "What communist country ever succeeded?" well, the answer is the third word right on the back of almost anything you buy. China.

Neither. Both systems do not work. Now I am no economist, but here is the way I see it:

The problem with Socialism: There is no progress.

The problem with Capitalism: There is no stability.

Socialism looks good on paper, but nothing gets done. If everyone gets paid the same, no matter what, then there is no drive to pursue newer, better products. After a decade our two under socialism, your country will surely lag behind greatly. Now I know what you will say, "look at China it is on the rise!" China isn't truly socialist any longer. The treaty ports that China regained in the 90's gave them a jump that helped them so they didn't drown in their communist economy, and now they are slowly morphing into a capitalist society as enterprises and CEOs start to pop up.

In Capitalist economies the problem is stability. What ultimately happens under pure capitalism is many recessions, usually popping up about every decade or so. The problem is is that much of capitalism revolves around the stock market, which is basically like legalized gambling. And as long as you are smart and make good bets in the market, you should be fine and you will be on your way to becoming a wealthy CEO (harder than it sounds). However, ultimately a lot of those wealthy companies will get greedy, and start to place risky bets (this is how we are in the recession we are in now). When these HUGE corporations that we have start getting burned by those bad bets, they are so big that they take the entire system with them (cough AIG cough).

So what's the solution? A mix. Both Capitalism and Socialism. That's what we have here in the US, although we became a little too ingrained in capitalism when this recession hit. Social Security, these bailouts, the talk of universal healthcare, are all socialist ideas. It's a good thing.

Heck, if you ask me I think that we should limit the size that insurance companies and banks can become, so that when they crash and burn we don't have to prop them up or risk the entire market (once again I am looking at AIG).

Again I am no economist, this is just how I see things.

I agree with Dragon. No economic system is perfect. Socialists and communists are too lazy, and capitalists are too greedy and unstable.

Finding a balance between socialism and capitalism is important, and we seem to have found a good balance, though we can probably do better, judging by the way we're working right now.

Personally I would support an absolute monarchy but that evidently isn't going to happen so I'll support capitalism in this. Obviously a completely free market doesn't work because not enough merit goods are provided and the negative externalities are uncontrolled. You need a government which can implement public goods and services such as healthcare and street lighting.

Communism never works because there is no incentive to work. If you are the best, most industrious peasent you can be you will get exactly the same as the guy who sleeps sixteen hours a day.

I disagree with dragon's idea to limit company sizes, however, because it also removes incentives. Once you've reached a certain stage there's nowhere left to go and there is less motivation for enterprise which is crucial to any capitalist economy.

Quote from Zed

I disagree with dragon's idea to limit company sizes, however, because it also removes incentives. Once you've reached a certain stage there's nowhere left to go and there is less motivation for enterprise which is crucial to any capitalist economy.

Not all companies, just banks and insurance companies.

Well first of all capitalism isn't a government; it's an economic system. But we've all made that logic jump so it's ok.


Our US system is a mix between capitalism and socialism. We have some market restrictions reminiscent of socialism with some government programs as well. However, we are a free market with standard trade policies. I think this mix blends the best of the two systems.

As stated before, all these systems have their pros and cons. If I had a new country to apply this to, I would probably start with a socialist system. This would help keep stability while you can also mobilize the economy. Once everything is in place, I'd slowly liberalize the system to make it more capitalist. Starting with a brand new capitalist system would basically be a free for all which would end up with larger companies dominating all the resources.

Quote from Zed

Personally I would support an absolute monarchy but that evidently isn't going to happen so I'll support capitalism in this. Obviously a completely free market doesn't work because not enough merit goods are provided and the negative externalities are uncontrolled. You need a government which can implement public goods and services such as healthcare and street lighting.

Communism never works because there is no incentive to work. If you are the best, most industrious peasent you can be you will get exactly the same as the guy who sleeps sixteen hours a day.

I disagree with dragon's idea to limit company sizes, however, because it also removes incentives. Once you've reached a certain stage there's nowhere left to go and there is less motivation for enterprise which is crucial to any capitalist economy.

Absolute Monarchy is not a type of economic system. Your could have an Absolute Monarchy Communist system, or a Democratic socialist system, or a dictatorial Capitalist system, or a Anarchy Utopia... just some examples. Its like adding Mr. or Dr. to someones name.

The origional post at the start of the thread asked for the best system of government, not an economic system. He then, however, went on to give the choice between two systems, one of which could only be economic, causing confusion.

And how the hell can you have a communist system with a monarchy?

Quote from Dudeman

As stated before, all these systems have their pros and cons. If I had a new country to apply this to, I would probably start with a socialist system. This would help keep stability while you can also mobilize the economy. Once everything is in place, I'd slowly liberalize the system to make it more capitalist. Starting with a brand new capitalist system would basically be a free for all which would end up with larger companies dominating all the resources.

That's sorta similar to what China has done, after their revolutions during WW2. They've been communist for a while (technically still are) but are slowly having more and more capitalist ideas infused into their economy. It seems to be working well.