Session 15 - Economic systems and politics

The economic structure of a nation is the chief determinant of the other elements of its superstructure. The pervasive influence of the economic subsystem extends to state apparatuses such as the religion, media and most importantly the political system. In fact, economic ideology is an essential feature of a party’s political manifesto. It is only natural then that many economic systems have evolved over the years to meet the needs of the political system and vice versa.

Two of the most important economic ideologies that have influenced political organization over the ages are capitalism and socialism. Even though the capitalist system is the economic system that is currently in practice in most of the countries of the world, it has some obvious flaws. The primary criticism of capitalism is that it leads to the concentration of wealth in the hands of a few select elite who then use their power to exploit the economically subservient majority. The capitalist system with its inherent drive for profit stops at nothing to maximize that outcome.

The flaws of capitalism may lead some to believe that a system of equitable wealth sharing is a viable way in which exploitation can be countered, but experience has proved otherwise. The failure of socialism validates this claim.  Socialism is based on the idea of the collective ownership of resources such that all resources are used for the mutual benefit of a country’s citizens. The socialist system was criticized on the grounds that it took away individual ownership and with that individual liberty as well as the drive for efficiency.

 So what then is a viable economic system? A solution might be a mix of capitalist and socialist ideas with essential industries in the control of the government while other institutions under private ownership, maximizing both equity and efficiency.