Re-examining socialism (The Hindu)
Mains Paper 3: Society
Prelims level: Not Much
Mains level: Socialism
- In the lead-up to the 2020 U.S. election, socialism appears to be
on trial, especially as Democratic Party candidates such as Bernie Sanders
and Elizabeth Warren have called for policies that some would describe as
being associated with a socialist paradigm. What is socialism?
- It requires the most productive assets are collectively owned;
- The major decisions regarding the use of those assets are
determined by some collective choice procedure.
Standard attack on socialism
The standard attack on socialism implies that only one
variant exists: state ownership of productive assets with centralised
control over resource allocation.
Yet modern socialist models are open to a mixture of
collective ownerships depending on the context, and, for example, propose
democratic voting to determine how much citizenries collectively wish to
save or invest.
These decisions may be implemented indirectly with
interest and tax rate adjustments.
Most of these models also retain markets as a cheap
way of getting information about consumer demand and business performance.
More modest proposals to extend public capital
ownership through independently managed sovereign wealth funds are likewise
ignored by the standard attack.
The standard line on historical experience draws
attention to the flagrant human rights abuses that occurred, and still
occur, under socialist regimes.
Many people have opposed state socialism for this
reason. But it must be acknowledged that others have come to different
- The common claim that socialism cannot match the sustained
economic growth generated by capitalism is false.
- The Soviet economies grew rapidly for some 25 years in the
post-war period. Yugoslavia performed remarkably well by many economic
indicators for 30 years after 1949.
- An opponent of socialism might interject that even if better
socialist alternatives to historical cases exist in theory, they have never
been tried anywhere in the real world.
- That may be true, but neither were any new ways of doing things
before they were adopted.
- The reply that the difference between technological innovation and
socialist experimentation is that the latter has cost millions of lives
wrongly implies that socialists have learned nothing over the last 100
- Fundamentally, this reaction seems to come from the contestable
belief that people should not take big political gambles to improve the
quality of their lives and those of future generations.
Q.1) Which of the following is/are correct with reference to Chit funds?
1. Chit funds are saving institutions in which members make periodical
subscriptions to the fund.
2. Chit funds are included in the definition of Non- Banking Financial Companies
(NBFC) by RBI.
Select the correct answer using the code given below.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Q.1) On taking a political gamble that could improve people’s lives.