How the economies are managed
Simpliefied view of how the economies are managed.
Scenario – I have two cows and my neighbor has none
Communism –The government buys milk from me at standard fixed rate and sells it to my neighbor at low rate.
Socialism – The government takes one of my cows and gives it to my neighbor
Capitalism – I have to sell off the milk since I don’t need all that milk. My neighbor need milk, so he buys milk from me. How much I get paid for the milk will depend on how much money my neighbor has. So my neighbor needs to be rich for me to get rich. Government only creates an environment for buying and selling milk.
Now going back, if communism or socialism has to work, the government machinery has to intervene with an iron hand to make me give off the cow or sell the milk at a low rate. Unless done so, I wont do it myself because I am selfish. (like all other human being).
Capitalism works without the iron hand of government.
Now, one recession is not going to end capitalism all together. In fact when all economies grow and exponential rates, the rich ones gets more rich and living becomes difficult for poor people. The situation is like my neighbor has no money and I am ready to sell the milk only at a high rates. At one stage the correction comes in, in the form of recession. It is inevitable, so that the price of milk comes down to the level your neighbor can still afford to buy it
May be the above concept is a little too simplified. May be what we need is not pure capitalism as is exercised in US. It is better to have more controls for the government machinery so that they can start controlling the growth to a feasible limit, and thus avoid deep recessions. Now, that is what is happening in US. The federal govt is taking control of banks and many other organizations.
The above written are purely my own views..no offence meant to anybody..posted purely out of my interested in seeing a discussion over the topic
You all are welcome to make ur views..
