SOCIALISM

An Alternative to Capitalism
Thorsson Questra
University of Northern Iowa

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An Alternative to Capitalism
There exists a society with no poverty class. A society where everyone has healthcare,
homes, food, water, and education. Everyone can have a job, and will make money based on how
much and how well they work. The environment gives every person opportunities for innovation.
This is a capitalist/socialist hybrid society. The American Capitalism system has grown far too
problematic for todays citizens. The richest 5% of the nation makes as much as the bottom 40%.
Jennifer Liberto, a writer for CNN wrote an article about the employee and CEO wage gap.
In 1980, CEOs at the largest companies received 42 times the pay of the average worker,
according to the union. In 2000 the gap hit a high, with CEOs making 525 times the
average worker. In 2010, the gap narrowed, with CEOs making 343 times the average
worker. (Liberto)
CEOs are not working 343 times harder than their average employee. It is doubtful they
are even able to work 42 times harder than their average employee.
Using statistics from the US census bureau, and examining the good and bad aspects of
socialist and capitalist countries, I will propose an economic system which can stand against
greedy exploitation, and still provide incentives to work hard and fuel creativity. I will also be
using the works of philosophers and sociologists who debate the good and bad ideas of
capitalism and socialism. I will do extensive research for all sides of the arguments, and will be
providing the support with text citations and logical relations in arguments.
It is the purpose of this paper to, first, define the parameters of inequality, and portray
how this is applied in Americas capitalist system. Second, to promote the idea of a market based
socialism, and to explain why it is a better alternative to capitalism. Lastly, to show examples of

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working Socialism in other countries, and even in our own, to help show how Socialism is a
viable alternative.
[LIT REVIEW WILL GO HERE AFTER I FIX IT]
In order to properly articulate my arguments, I will need to define a very controversial
idea. There is an ongoing debate on how to define equality and inequality. An often assumed
notion about equality is, it is an all or nothing idea, especially when viewed in terms of
Socialism. This would mean either everyone has the same amount of resources; wealth, food,
power, etc.; or no one has the same amount. This is, in my opinion, a very radical way to view
the idea of equality. For my own persuasive purposes, I will think of equality as finding ways to
reduce preventable inequality. This is not an adequately explanatory definition, therefore, I will
do my best to make clear my definition of inequality.
I stated equality is finding ways to reduce preventable inequalities. After researching a
few ideas on how people define inequality, I have found two major types, which I will refer to as
natural inequalities, and preventable inequalities. Natural inequalities are inequalities that will be
present no matter what anyone does to trying to prevent them. These inequalities can vary from
genetics to deviant behaviors. Preventable inequalities, on the other hand, are just as it says,
preventable. Income, education, and healthcare are all prime examples of this.
Capitalism itself is, similar to what is said about communism, a good idea on paper.
Capitalism has many good aspects. It provides innovation and opportunity, which helps a country
develop. As development increases, so does the need for jobs to help the industry flourish.
Industrializing countries are greatly benefitted by Capitalism. Jobs are in no short supply, and the
massive creation of products helps to feed the consumerism. This is still active today, in our post

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industrialized country. It may then appear as though Capitalism is still the greatest of systems,
however, innovation has drastically decreased from the levels they were at during
industrialization, and the wealth and resources collected by those who were successful in the
past, limits the opportunities of those who live in the present. This leads to much wasted
potential, and the economy begins to suffer.
Capitalisms greatest flaws are equality of opportunity, and wealth distribution. Wealth
distribution is rarely considered a debate anymore. This issue is greatly accepted as a problem.
The argument, now, is what to do about it. Equality of opportunity is still debated by many. It is
also an accepted problem, but whether or not Capitalism is to blame, is the real question. I have
already argued my reason for Capitalism causing unequal opportunity. This leaves one more
issue for me to address, which is solving the problem of wealth distribution.
Socialism, in any form, is set up to distribute wealth in a more egalitarian way. The form
of Socialism which I am proposing is not as extreme as other forms. There will still be classes,
however, the idea is to reduce the gap between the richest and poorest, and to keep working
people above the poverty line. This form of Socialism will still include the free market. Due to
the success of market based economies (not all of which are Capitalist), I believe it to be an
essential part of any working economic system. With that in mind, I will now explain the
proposed system.
The important distinction to make between this form, against other forms, is this one does
not have a central planning system. Central planning has been deemed a very important aspect of
Socialism, however, as stated before, the market works just fine, and central planning, especially
with a country as massive as ours, would be impractical, and likely impossible. Central planning

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does not give many opportunities for innovation. Instead, it keeps production of the same,
current products at a steady pace.
Another key idea in this system would be how to deal with income. The way things are
currently, income greatly influences wealth distribution. Two options seem possible to me,
however, one seems far superior to the other. The first, and more radical option would be a full
seizure of all the countries assets, and complete redistribution based on need, followed by status.
This method, though it would be the most straightforward, is incredibly controversial and
somewhat impractical. The other method would be a much more reasonable one. This is a
method used in successful Socialist countries across the globe, an increased taxation rate. This is
also a controversial topic, but one should keep an important fact in mind. Starting from the
1920s, it was not until Ronald Reagan that taxes were cut so dramatically. It was around the
same time when taxes were cut by this man, the national debt began to rise at a significant rate.
The two may be unrelated, however, I find it to be a reasonable conclusion to think the former
caused the latter.
One of the biggest problems I foresee with a change in economic systems, is not with the
system itself, but rather with individuals. The Capitalist economy is, indeed, a haven for the rich
innovators of our time, but changing their ability to be as successful is likely to cause them to
rebel against the system. This could be very problematic with keeping up production of old and
new products, and services. I see only one solution to this problem, though it may seem more
drastic. The government would need to take ownership of privatized corporations. The owners
who are unwilling to see their company through with production, will be replaced with those
who are willing to provide ideas and innovation to the company. Employers would still be
receiving the highest incomes, however, it will not be as much as they are making now. In

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addition, private ownership would still be legal for business not making as much, and for
aspiring entrepreneurs.
The most important thing to know about Socialism is it can work in a democracy, so our
political system would not have to change. (expand)
This brings me to my final point. Here, I will discuss countries which have already
implemented Socialist aspects, and shed light on the history of Socialism in our own country.
This will help to validate the possibility of a successful Market Socialist country. I will start by
discussing Finland. Finlands economic inequality levels are quite low, according to the Gini
Index, and are just over half of Americas level of inequality. Finland, like us, relies on the
market for their economy. The apparent reason, though, for this difference in the index is partly
due to their welfare system. They have one of the top welfare systems in the world, which they
manage to support through high tax rates. Their tax rate averages to about fifty-three percent.
Americas tax rate is about half of Finlands. As I stated earlier, Americas taxes used to be much
higher, and in those days, our welfare system was better than it is now.
Norway is another great example of a country with socialist aspects. Norways Gini Index
matches Finlands. Their tax rates are much more spread out than Finlands, however they
remain higher than Americas. Their welfare system is not as profound as Finlands however it
still follows the Nordic Model of welfare. Norway displays one of the ideas proposed in my
earlier argument. Norways government has taken ownership of the larger corporations, which
also provides a boost in their spending, as well as giving them many bonuses from their exported
goods from these companies.
[something else may go here]

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As this essay comes to a close, I would like to restate my argument. Americas current
Capitalist system is undoubtedly having problems, and something should be done about it. One
of the possible solutions is the one I have proposed, implementing a Market Socialist economy.
Socialism which relies on a market is not impossible, and has been shown to work in other
countries, therefore I believe it would be a viable option for our country as well. Of course, there
may be many questions raised about this economy, and what I am truly arguing for. As I wrap up,
I would like to clarify just a few of these questions. To implement this system as I have stated
would not be a good idea. This is a very basic overview, and in order to be truly considered for
implementation, would require more research, especially on a micro level. I did not look at
education, healthcare, inheritance, etc. and think these, and many other aspects would need to be
addressed and validated before changing our economy to this model. I would also like to clarify
that I do not think this model is the only alternative to Capitalism. There are other alternatives,
including modifying our current system, while still keeping it a Capitalist system. The reason I
chose this one is because, in my own opinion, it seemed like a reasonable alternative. Lastly, I
would like to put forth a challenge. Agree, or disagree, but in either case, do the research, and
decide for yourself what you think is best.