Socialism - The Economy

  • Argued that equality of opportunity was precluded by the inequalities existing between social classes.
    • Marx & Engels argued that class was determined by economic system underpinning society.
  • Capitalism and private property is hugely problematic.
    • Co-operation and fraternity of which human nature is determined in socialism have been threatened by private property and capitalism which is said to encourage competitiveness, egotism and self-interest – what liberals believe not socialists.
  • Capitalism generates huge inequalities of outcome, which is incompatible, with equality of opportunity, self-determination and social justice.
  • Socialism asks for the redistribution of wealth – Benn “The Robin Hood of politics” – taking from the rich and then giving to the poor
Two Broad Principles:
  1. Rejection of laissez-faire capitalism (advocated by neo-liberals and classical liberals). Market forces should not been given free rein by a State.
    1. Socialism: An economy with low taxation and little state interference will be one where unfairness and social injustice become exacerbated.
  2. Socialism demands greater collectivism. Focus needs to be on the needs of society as a whole rather than on the abilities of a few individuals as with economic liberalism.
Economic Collectivism Forms:
  • Progressive taxation whereby the state extracts wealth from its citizens by on a ‘sliding scale’ so that the richer classes contribute much more than the poorer classes.
  • Progressive public spending using taxes in a way that enhances the less fortunate elements of society e.g benefits.
  • Public services through tax to fund key public services e.g healthcare
  • State regulation of capitalism designed to prevent exploitation by economy’s richer and more powerful elements e.g legal wage for employees, health and safety, maternity leave.
  • State/Common ownership recommended when private enterprise is seen to fail parts of the economy with consequences for society.
Two Benefits:
  1. Progressive taxation increased public spending, extensive public services and sometimes public ownership are seen as expressions of a fraternal and cooperative society with greater social justice.
  2. Collectivist policies are thought to make the economy more efficient.
    1. Marx & Engels spoke of how capitalism and markets were unpredictable causing mass unemployment.
    2. A collectivist economy will be more stable and manageable and more likely to provide the material resources society needs.