Two Sides of the economic coin: conflict between socialism and capitalism

Posted: April 4, 2012 in Profit, Society
Tags: , , , , , ,

We all know economical development is the foundation for development of Humankind. The never ending mismatch of Demand and supply is the cause for all economic activities around the world.

Earlier when humans were living in forest, their primary requirement was food and shelter. After some time,came a period referred in history as  Stone age. So many great inventions came during that time  like knife made of sharp stones and other invaluable inventions. With those inventions man went for Hunting for food. Over a period of man’s necessities made him to invent more things like Wheel, vehicle,etc. which helped us to move around different places. Then with his inventions he learned to involve agricultural activities and produce commodities. Over a period of time man got specialized in producing certain commodities.Image

Then they started to exchange goods for goods with different groups of people .This system is called “Barter system”. They exchanged rice for wheat, and sugar for salt. Since seasonal factors are involved in production of goods they were in need of some other thing, which holds value until they produce and exchange goods. So there came the role of MONEY. They considered the Money or currency that they holds some value which will be acceptable for exchange of goods later period. Money doesn’t hold any value of its own, the main purpose of money is medium for exchange of goods.

So the economic structure then was Commodity – Money – Commodity1. People produced a commodity exchanged for money and then they exchanged money for another commodity. once the need of the commodity got over , the role of money ends there. But the role of money changed after that. The very nature of Mankind was when we repeatedly do some thing our efficiency will get increased.

So people after some time, they have produced more than what they needed. Then came something called surplus goods. This gave a possibility for some people not  to work because of the surplus goods available in hand will take care of their demand. Then these people acted like Heads who manages the surplus goods. They became expert in managing surplus. So two different societies came into existence one who works and other who get things done from others. Here came two different class, one is working class the others are heads to get work done.

As i told you, the role of Money started changing. Initially it was Commodity to Money to Commodity, then it became Money – Commodity – Money1. People started chasing money. They paid money purchased the surplus goods and stored it. When prices got rised, they sold it for Profit, Money started to grow and grow further, some people started to have surplus money.

The interesting thing is when we chase the commodities once you chase the commodities (C-M-C1) , you exchange commodity with the help of money, and get a new commodity. But when you chase money , it is not a need to be satisfied, but it is a want which cannot be satisfied. In simple terms Greed started to play a crucial role in everything. Those heads who got work done through workers claimed ownership of the commodities and lands. They became owners and they wanted others to be workers eternally. The deal is owners bring money called “Capital” and the workers have to contribute with their work. Financial capital equaled Human capital. Workers started working , Owners started earning. That was the only economic structure available called ” CAPITALISM“. Profit is the only Motive behind every decisions taken.Image

Then a different view of the economics came with a revolutionary work called ” DAS CAPITAL”. Karl Marx authored the book, and it described about unsustainable nature of “CAPITALISM”. He coined his work as “SOCIALISM

Socialism is the economic state in which all have equal rights in properties and goods. All are same in an economy. Nothing like private property and ownership. All will be managed b government. Marx said that Socialism is the sustainable economic structure , after some years Capitalist will be thrown out and Socialism will remain eventually .


So in an Economic coin, there are two sides Capitalism and Socialism. Socialism is the only solution for all the problems within a country. Because it wipes out the disparity between the rich  and poor and make the country class less and all are common and we behave HUMANE.
  1. balachandarksr says:

    Good article Riyaz,

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