Our Economic System

In: Business and Management

Submitted By moulin46
Words 1101
Pages 5
Our Economic System

Prior to describing which economic system is best suited for handling a crisis of epic proportions (hurricane, flood, blizzard, forest fire, etc.) one needs to specify for whom exactly it is supposed to be “best suited”. If the answer is “for the greatest number of people” regardless of socio-economic status, race, etc., than it is certainly a centrally planned authoritarian economic system (such as socialism, communism and other Leftist derivatives with a strong government role in economy). The reason why the “socialist” system is better in countering crisis is because it is created under the notion of socialist justice or the “to each according to the need, and from each according to ability” principles. The capitalist system on the other hand focuses on the notion of “to each according to one’s investment” principles. In practice, in an abstract capitalist system, a crisis of epic proportions (hurricane, flood, blizzard, forest fire, etc.) is a true windfall for some people and a nightmare for others. For instance, if you own the only gas station that got left after a hurricane why not increase the price by 10 times? Or maybe even by 100 times if you also know that all the food stores were also destroyed and people would either pay your gas price to drive to the nearest store or die from starvation (Welch, 2007). Such behavior is absolutely normal and encouraged under the capitalist system simply because the reduced supply (the only gas station) and stable demand obligates an increase in prices of a profit-seeking vendor. Likewise, hospitals can and should charge higher prices if they see the demand increase for their services, or the lifeguards, and other “savior” services may also try to make extra money on it. Under the socialist system, these various emergency services are…...

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