The economic ideology of socialism is one which has existed for centuries past, changing and warping with each figure who interprets this intricate system of economy. Socialism’s basic formula is one in which a country’s wealth is distributed more evenly than in a capitalist society; large taxes are paid to the government in exchange for many free services and privileges, and taxes are also paid by the rich to be distributed amongst the poor. What makes it so complex, however, is the fact that how money is distributed is not black and white. In contrast to communist economies in which all wealth is equally distributed and there is no free market at all, socialism still has a free market in which working harder still means making more money, but to account for socioeconomic disadvantages and a lack of funds to kick off one’s career, a certain percentage of wealth is given to the lower and middle classes. This preserves the motivation that comes with working towards your own income and prevents the rich from getting too powerful; the perfect equilibrium. The term ‘socialism’ was first used by Karl Marx and Friedrich Engels in the famous “Communist Manifesto” (the document credited with inspiring the Bolshevik Revolution) interchangeably with their use of the term ‘communism’.
With the constant evolution of the word, there have been many definitions, however for the purpose of this paper, the more modern use of ‘socialism’ will be used. Socialism is a highly effective form of economy because of its solutions to problems present in large capitalist societies regarding wealth distribution, how well it is currently functioning in many Scandinavian countries, and the use of numerous socialist philosophies and programs in many countries defined as capitalist. The largest point of evidence as to why socialism works so well is the effective elimination of wealth inequality.
There is a very well known problem in the US about the ‘top 1% of our economy and how they own most of the money in our country. This is, in fact, grounded in reality as the wealthiest 1% of our country does own “34.3% of all privately held wealth, and the next 19% have 50.3%, which means that just 20% of the people control 85% of the nation’s wealth, leaving only 15% for the bottom 80%” (Leslie).
Uneven wealth distribution has been a huge point of concern for years, and a socialist government is capable of correcting that. More money would be taxed from the upper and upper middle classes and given to the rest of the middle and lower class, evening out the money. In Germany, a country known for it’s socialist way of running the country, being the birthplace of both communism and socialism, and “one of the world’s leading economies, CEOs make only 147 times more than workers” whereas “In the U.S.
, the average CEO makes 354 times more money than the average worker.” (Kohn). A common misconception is that socialism equals all wealth throughout the country; however the CEO still makes a lot more than their workers, just not overwhelmingly as much as in the United States. This has been shown to work in many countries such as Germany and Scandinavian countries, which have significantly lower wealth gaps than the US. Furthermore, many socialist programs are already in place in America. It is another misconception that the US is a purely capitalist society, as many would like to believe.
The numerous government owned industries and privileges like free public education,