Seminar Question: : Is capitalism so deeply flawed that all attempts to ensure the public good are doomed to failure?
Capitalism: An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.
Public Good: A good that is non-rivalrous and non-excludable. A good or service that is provided without profit for society collectively.
Examples of Public Good:
- Health Care System
- High Road
Health Care System in North Korea
N Korea healthcare ‘near collapse’: Click Here
Main Point: North Korea’s healthcare system has failed. It does not have medicines in hospitals to cure its patients. Also, it lacks sufficient medical instruments.
North Korea’s health care system charges their people no fees. It is totally free. It is surely a great contrast from United States, which only started to debate whether they should have laws related to health care passed or not. However, there’s a big flaw in North Korea’s medical system. It simply does not have enough medicine and medical instruments to take care of the patients. Virtually, there is no point in going to the hospital because there simply are anything to cure with.
Health Care System in Cuba
Wikipedia: Click Here
Unlike North Korea, Cuba’s health care system is well-developed. It has advanced medical support for its people free of charge. Cuban hospitals are advanced as any other hospitals in United States or Europe. But, they provide medical surgeries with low fee compared to the hospitals in United States or Europe. So it attracted many health tourists for 20 years.
Sum: The example of North Korea’s medical system seems to imply that communist countries cannot provide medical service. However, looking at Cuba’s example, it contradicts to this idea that communism cannot support medical system.
<Pure Capitalism-Mixed System-Pure Communism>
There aren’t countries with pure capitalism or communism in the world. Even North Korea isn’t a pure communist country because it allows South Korean factories to do business in their ‘special economic district.’ Most countries are in the middle part where they mix a little bit of capitalism and little bits of communism.
US, which is the closest to pure capitalism, has failed to support medical services. Its citizens have to pay medical fee on their own. Pure capitalisms always fail to ensure public goods. Socialist (a capitalism but has some aspects of communism) countries such as France has successful medical system. It takes 40% tax on its citizens and use that tax on the public goods. Capitalist countries often have low taxation on its citizens to ensure their economic freedom. However, it makes it difficult for the country to establish a good medical system. As it has low taxation, it’ll be hard to provide government-owned hospitals. Instead, privatized hospitals dominate the medical market of the country and charge extremely high price for its medical service. Even though North Korea would have 100% tax on its people, as its economy is extremely feeble, it does not have any money to do anything. It’ll virtually have no money to establish hospitals and buy medicine even though it taxes its citizens 100%. So public goods can only be supplied when the economy has a firm foundation. However, even though the economy is strong, like US, the tax rate is so low that it cannot support medical services. So it is very important for countries to be communistic when it comes to public goods. However, not so communistic that you end up being like North Korea.
Capitalism is the best thing out there for growing markets ands economy. However, it does not ensure public good to be provided to the people. It is wise for countries to change their economic system to socialist system as soon as they achieved the goal of well found economy by capitalism.