Shely 1 S. Wyall Shely Ms. Caruso UWRT 1103-037 6 October 2015 Using Socialism and Capitatism to Reduce Poverty — Poverty is an issue that affects humanity on every continent of the globe, \t can be determined though absolute and relative terms, “Absolute poverly measures poverty in relation ‘e the amount of money necessary terméet basic needs such as food, clothing, and shelter. [ Relative poverty defirics poverty in relation to the economic status of other members of the ee Society: people are poor if they fall below prevailing standards of living in a given societal | in 7 context” (UNESCO par. isan intemational problem that strips people of their dignity, deprives them of basic necessities, and ipples their ability to flourish in society. Even in the twenty-first century "poverty remains a global problem of huge roost ‘world’s 6 billion people, 2.8 billion live on less than $2 a day, and 1.2 billion om less than $1 a day" (World Bank VI 1 atone it would be ideal to totally eradicate poverty’s existence, the first step is to identify the most eflective and efficicnt ways itcan be reduced. “Hre-multi- The ‘Seandinavian countries such as Finland, Denmark, and Sweden employ a combination of ‘capitalist and socialist principles within their economic and political system. ‘These countries are # also noted for having some of the lowest poverty rates in the world (Miller pat.1).7In order to nd measpeoples’ lives, while also h envreproneursip, | their own ‘The majority of countries in today’s society contain a combination of political and ist oF soc cconomie systems, In the modem era, a solely capi list nation docs not exist. The ‘United States, thought to be a capitalist nation, has si aspects such as welfare, a publicly governed military, and the Federal Drug Administration. Alternatively, predominately socialist nations such as Denmark and Finland, have transitioned their tax policies with more capitalist tendencies. The primary distinction between these two political and economic systems is the ‘ownership of the prod mn and distribution of goods und services. Capitalism is “based on the private ownership of capital and production inputs, xe on the production of goods and services al che SpE pT for profit” (Investopedia). % Wear Sor" develops ent LOE cet innovation. It does this by having policies that are “open to new ideas, new firms and new owners” (“The phen Hes ene, eet Thegry on Capitalism and Society"). Socialism is antonymic to capitalism. Rather than promoting competition, socialism promotes communal equality through a “system of collective or government ownership and management of the means of production and distribution of goods” (Collins English Dictionary). Socialist society stresses the need for free education, free universal healthcare, and other programs that help meet the needs of the peopl society (Maass par, 2). Capitalism runs through private ownership and action, while socialism runs through governmental ownership and action. These two contrasting political and economic systems ae their societies. 9 experts ‘When assessing strategies to decrease poverty, capitalists are critical of “lp-down = dene 7 det Airs fet colvocals prea fending government funding as a strategy” (Shirima 2° They de not believe that it is effective to develop opposing ideals of how to approach the issue of reducing poverty wi distribute money as hand-outs to those in need. When President Johnson was in office, there wasShely 3 an incredible amount of money being spent on government \s aiding the poor, “and the ing spenton veranda poor stayed poor” (Stossel par.3). Perhaps a more successful method would be to utilize privately owned charities that are locally based. The privately owned charities are more sequainted with the problems connected to poverty in their specific regions, therefore, will be oot ¥ hae (eonomic growth is etitical to eseape poverty (United Nations Development Program) ey 4 able to address the problems more productively. \ow In @ capitalist society, economic growth is created from the private sector through the formation ‘of new businesses that provide jobs and stimulate the economy. ‘The best way to do this is to direct policy efforts “towards promoting innovation and entrepreneurship” (Shirima 10). When people fecl as though they can create businesses, the urge to work and climb themselves. cam “Eye IS a ee VE te weds? AR! He Come ih St wan poverty is benefited. Two missionaries, Mare and Craig Kielburger, have witnessed this growing entrepreneurial spirit in many of the developing countries they have visited. One experienc Particular was when they met an impoverished 13-year-old boy on a visit to India. ‘The boy was asking for money to purchase a carom board (similar to an air hockey table), in order to create a business where he would rent the table out to people. This was his plan to escape the shackles of poverty. This boy knew he had to take initiative to rescuc himself from poverty instead of begging on the streets for the rest of his life. Contrary to the non-profit sector's belief, “entrepreneurship is a key player in ending global poverty by reversing the cycle of dependency with a cycle of self-sufficiency and employment” (Kielburgers par.1-9), This entrepreneurial notion aligns with what an old Chinese Proverb says, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.’ Entrepreneurs that create businesses “enhance economic growth by generating incomes, creating employment opportunitics, paying State taxes and making available varieties of goods and services at competitive prices” (ShirimaShely 4 3). Capitalists believe that entrepreneurial economies are vital for the reduction of poverty, The constant filtration of non-benef businesses along with the birth of new innovative businesses adds a sense of competition to pro entrepreneurial economies (Oghojafor, Akpoyomare, ‘Olayemi, Oladobe, Okonji, Sunday, and Olayiwola 8). The capitalist strategy of minimizing poverty is to promote entrepreneurial efforts that create positive economic activity such as creating jobs, and to keep the government out of the private sector ~ including privately owned charities ~ in order to support the more effective private sector. Socialisamie quite diflenent leemreapitatise According to the Socialist Labor Party of ist society promotes “freedom and opportunity” to everyone, through the America, sociz collective ownership of factories and production (SLP see, 6 par. 1). This allows for everyone in society to share the benefits of production, rather than the private owners of industry in a capitalist society reaping the profits (SLP see. 5 par. 4) poosk in today’s societydo no) cmplo¥ the collective ownership of factories and production to the & i Pp ‘Nations that are predominately socialist extent at which socialism is defined) Socialist leaning nations apply the principle of communal sharing of the benetits of production through const ing higher taxation rates. ‘These larger taxes provide free healthcare, free education, and substantial welfare systems for these nations” citizens (Peerform see. ‘Denmark’- “Sweden’; Apollo par. 1). ‘There is evidence of many countries utilizing these socialist principles to prove the standard of living of their people, while also having a profitable economy, For example, Norway provides fee healthcare to all of its” citizens, but they also maintain a prosperous economy (Gilbert 2-3). In fact, many countries that are noted as being the most prosperous in the world are Seandinavian countries (Norway, Denmark, Finland, and Sweden) with socialist style governments that focus on “generous welfare benefits and lots of redistribution of wealth.” yet they maintain civil liberties (Helmanbest for reducing poverty. Socialist supporters give a large ammount of faith and control over to the government, while capitalist supporters have little faith in the government’ seffectiveness. Capitalists side with the power of the private sector's ability to create new enterprises which create economic development and wealth. Is there a way to combine the beneficial qualities of both socialism and capitalism to work together in the fight to reduce poverty? The Scandinavian countries (Finland, Denmark, Sweden, and Norway), with the lowest poverty rates in the world, have combined the “best of capitalism and socialism” in order to reduce poverty to a record low (Miller par. 5). The usc of socialist principles is exemplified through the governments” provision of all the components needed to flourish in society such as “equal rights and access to healthcare, social services, education and culture” (Miller par. 3). Capitalism is symbolized by the Scandinavian countries’ motive to promote entrepreneurial efforts. The common denominator of all cot tries with low poverty rates is their proficiency of “fostering entreprencurship and opportunity” (Helman see. 3 par. 9). The best method to reduce poverty is to use the capitalist principle of promoting entrepreneurship and innovation. into society to strengthen economic development, while simultaneously providing: socialist principles such as free healtheare, free education, and a strong welfare system, in order to pro} le for citizens’ basic needs. ‘This creates a sense of security and inspiration within a society that promotes growth and decreases poverty