Economy

Question 1

Rejection of capitalism

Answer 1

• according to Marx, capitalism creates class conflict between capitalists who exploit and the proletariat who are exploited. The destruction of capitalism is inevitable as it is flawed and unsustainable.
• instead their should be common ownership of the means of production (state/ public ownership).
• wealth should be redistributed equally.
• economic decisions should be made to benefit all.

Question 2

Some capitalism?

Answer 2

• not all socialists completely reject capitalism. Whilst revolutionary socialists and democratic socialists want to get rid of capitalism altogether, social democrats and particular followers of the Third way believe that capitalism can be compatible with socialism.
• social democrats argue for a mixture of capitalism and state control, with a strong welfare state, some redistribution of wealth.
• Anthony Crosland argues for ‘social justice’ instead of common ownership - the state manages the economy to make sure the benefits of economic growth spread across all the people.
• The third way embraces the free market including in delivery of public services, leading some to question whether it really is socialism.

Question 3

Collectivism

Answer 3

• taxation should be progressive taking a higher percentage of the most well off - those most able to contribute.
• public spending should be progressive - more money going to those most in need.
• large scale public services - available to all - free at the point of use e.g. health care and education.
• state/ common ownership - where private sector fails to promote good for all (amount depends on type of socialism)
• state regulation of capitalism. For example, minimum wage, workers right, equal pay legislation.

Question 4

Impact of collectivism

Answer 4

• economy is more efficient and less volatile removing the boom and bust of capitalism. This would mean an end to mass unemployment.
• it allows long term economic planning to make sure that there is enough material resources not only today but going forward.
• promotes a more cooperative society with social justice.

Question 5

What would a socialist economy look like?

Answer 5

• Marxist/ revolutionary socialist: complete removal of capitalism by force. All companies would come under control of the state/ workers. There would be redistribution of wealth to ensure complete equality.
• Democratic socialist: similar to above but rejecting revolution meaning change to the economy would be more gradual.
• Social democrats: mixed economy with some elements run by the state and other by the free market. There will be a welfare state and redistribution of wealth with progressive taxes.
• third way: largely free market generating money for public services.