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Should indian shift being socialist economy to a capitalist economy? Why?

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Essay Contest for UPSC Exam for IAS

ECONOMY: A METHODOLOGY WHICH ENCOMPASSES ALL THE ACTIVITIES RELATED TO PRODUCTION, TRADES OF GOODS AND SERVICES.

ECONOMY OF A REGION IS GOVERNED BY ITS LAWS, GOVERNMENT, HISTORY AND OTHER FACTORS ENVOLVING THE CHOICE OF THE PEOPLE PARTICIPATING IN THE ECONOMY.

HENCE, MAJOR DEVELOPMENT OF A COUNTRY DEPENDS ON THE MODE OF ECONOMY MAINLY CATEGORISED AS SOCIALIST OR CAPITALIST.

SOCIALISM: socialism is the political idea based on belief of all people are equal and that money and property should be equally divided:

.Production for use rather than profit, equitable distribution for wealth, no competition

. Free access to goods and services

. Public ownership

. Legal decisions made by the Government

. Redistribution of income through tax

CAPITALISM: The economic system is which businesses are owned and run for profit by individuals :

. No fixed wage labour

. Capital accumulation

. Competitive markets

. Private system

. Property rights in the hands of people

"The essential notion of a capitalist society is voluntary cooperation, voluntary exchange the essential notion of a socialist society of force.”

 MILTON FRIEDMAN

 

Both type of economies have their own pro’s and con’s but getting them with examples will be much easier…starting with socialism stance on capitalism has altered throughout the history… early socialists were influenced by the work of Karl Marx and Engels , condemned capitalism and private property as a mechanism for oppressing the proletariat because of the industrial working class have little room for legitimate political participation or influence, Marx believed the logical method of revolution to solve the problem and alternatively, advocated an economy of common ownership. Hence, it does not give the best review of capitalism… yes, Marx's predictions did fail to surface and consequently the situations changed.

China is considered to be one of the best socialists’ countries. Being a socialist country does not mean government can handle all the aspects completely. Biggest problems faced by Chinese economy are education, unemployment, healthcare and environmental problems.

Yes, we do agree upon the fact the fact that a country under a socialist economy performs really well among all the sectors of socio economic problems faced by the citizens. Socialism is a big boon for people and sometimes a solution to vulnerability as it works on healthcare, education facilities, licensed business, equality for labor but here we can also not deny the fact that corruption is all there in it.

 Sidelining the corruption for some time we still have hundreds of questions arising in our fellow mind:

Where does the competition vanish away?

Does we human lack motivation?

Is it not reducing the disparity in wealth?

Is the best use of labor and land taking place?

These are the questions socialism is still not answerable to. Those people tend to seek ways to overthrew and disrupt society for their own benefit, Capitalism harnesses this “greed is good" drive.

Capitalism is the best form of economy providing financial incentives, competition to work ,efficient allocation of resources, efficient production, creativity and innovation .

Hong Kong is considered to be the best capitalist economy of the world as it is a free market economy characterized by low taxation, almost free port trade, well established international financial market. Its economy is governed under positive non -interventionism and highly dependent on international trade and finance. But the problems still faced by them is huge income inequality, markets controlled by housing etc.

The overall biggest problem faced in capitalism is misuse of the free market; government is not only the corrupt body. Let us accept that we citizens are too.

CONCLUSION: no economy is the perfect solution to every problem it is better to attain a mixed economy to reduce the burden on government, partial opportunities to the citizens that is licensing the essentialities and controlling the corruptions. A missed economy is a perfect economy to be accepted for a country like India to implement social welfare of people.

-Trisha Nagpal

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