Financial woes force Americans to weigh the impacts of capitalism, socialism


Olivia Trone photographed by Isabella Kneeshaw.

Olivia Trone, Copy Editor/Bilingual Editor

Capitalism and socialism are both common economic systems used in developed countries across the world. The main difference is the extent to which the government controls businesses and the economy. 

There are certainly arguments for and against both. For starters, capitalism has allowed the United States to become one of the strongest economic forces in the world. Capitalism supports business and encourages people to work for what they earn. However, there is something to say about the systematic unfairness of capitalism. Why is it that the wealthiest people are often White? Why are those who are more impoverished usually people of color? Capitalism is a great idea in theory, but it is a system that makes life more difficult for marginalized groups. While I do not think the United States should fully adopt socialism, there are still significant strides we need to make as a country to make the distribution of wealth more equitable. 

Adam Smith was the ‘father’ of capitalist thinking. He thought that, since humans were self-serving by nature, then society would be balanced if everybody worked as hard as they pleased. The idea is that the most hard-working people are the wealthiest, and those below are there because they do not work as hard. The problem with this idea is that it is often very inaccurate. This brings us back to the question raised earlier: why are wealthier people White? White people are not always the hardest workers in society, but generally they are the most wealthy. To put the racial wealth gap in perspective, the 400 richest American billionaires have a higher collective wealth than all 10 million Black American households combined. Black households have about 3 percent of all the household wealth in the United States, while the wealthiest billionaires have 3.5 percent of household wealth. If the wealth gap were completely eliminated for everyone but the richest 10 percent of households, the total racial wealth gap would still be more than $8 trillion. While it may not seem obvious, capitalism and the racial wealth gap are directly related as capitalism reinforces White wealth. For years, American politicians have blamed wealth inequality on Black workers, saying that they have less income due to personal decisions and a lack of work ethic. This argument is simply false, as numbers prove that capitalistic practices put White people on the top and people of color on the bottom. As Martin Luther King, Jr. said to his staff in 1966, “Something is wrong with capitalism. There must be a better distribution of wealth, and maybe America must move toward a democratic socialism.” 

Socialism is a structure where the government owns public land and tools that manufacture goods for selling. Socialism supports programs that provide various services for free or reduced price, such as health care and education. The system ensures that everyone is provided with a basic standard of living by establishing a more equitable distribution of wealth. One of the most common arguments against socialism is that it is an inefficient system that damages the economy and relies too heavily on high taxation. But socialism is a more ethical system created to help everyone and make things fair, especially for those in minority groups. In my experience, capitalism is a selfish form of government that makes it impossible for people to succeed. Oftentimes, those who criticize socialism argue that it is unfair for wealthier people to pay taxes for those ‘beneath’ them. Common socialist programs, such as Medicare and Social Security, give basic support to those in need. Wealthier people should pay more in taxes to support socialist programs because they have the means to do so. 

Socialism is a flawed system just as much as capitalism is. However, socialism promotes morality and support of fellow citizens, rather than creating a dog-eat-dog society where profit is the most important thing and the only way to rise up is to push someone else down. The United States of America will never be united as we allow capitalism to create polarizing racial wealth disparities in society.