Capitalism and Socialism Systems

Almost two months ago, I spent a week in Cuba with my newly wedded wife (our honeymoon). Since I love reading, I brought a few books along to spend some time reading on the beach and by the pool.

One of the books I brought along is, Pricing on Purpose: Creating and Capturing Value by Ron Baker. It never crossed my mind, before leaving for Cuba, that the book is about capitalism and that I was going to a socialist country.

It was an interesting experience to read about capitalism and then to see first hand how a socialist system in Cuba is organized by different principles. One most notable experience is that all the employees at resorts are employed by the government in the name that everybody is on equal terms. It seemed to me that it was rigorously restricting individuals on many levels.

I could literally sense a yearning for freedom in some of the individuals we (my wife and I) came in contact with. Ron Baker says, “Nobody, it seems, dreams about capitalism, until they are faced with life under the misery and poverty of communism or socialism.”

The socialist system stifles the creativity of many where as capitalism is a system of freedom, that encourages creativity yet so few take part in the creativity and in return, creates complacency.

Pope John Paul II addressed the faithful in 1991 in his introduction “Centesimus Annus” which addresses several key areas including:

-Human Dignity
-Human Rights
-Justice
-Development
-Peace
-Economic Systems
-Foreign Debt

He says: “The social order will be all the more stable, the more it takes this fact [Freedom and Sin] into account and does not place in opposition personal interest and the interests of society as a whole, but rather seeks ways to bring them into fruitful harmony.”

Bringing the two in harmony is the tension we must face everyday if we actively participate in any social order. It is not an easy way to live. I have found this practically true in the corporate environment.

Pope John Paul II goes on to say: “In fact, where self-interest is violently suppressed [often the case in a socialist system], it is replaced by a burdensome system of bureaucratic control which dries up the wellsprings of initiative and creativity.”

But this is also true in a capitalist system. Bureaucratic control seems to be just as real in a capitalist system then in a socialist system. The only difference is that the socialist , in power, creates bureaucracy for the interest of a society as a whole, which often is highly selfish and the capitalist, in power, creates bureaucracy for selfish reasons. In both cases, it “dries up the wellsprings of initiative and creativity.”

In summary, my conclusion is that the capitalist system has many benefits over the suppressive socialist system.