Socialism in Capitalism: Sweden Democracy - Article Example

Socialism in Capitalism - Sweden Democracy - About the News Article The news article that I have chosen discuss about the benefit of having a free market in the country as well as having socialism to control the abusive capitalists and prevents the unequal distribution of wealth. Sweden had a direct agreement between the Pakistan and other countries with a competitive advantage in producing quality denims like jeans, etc. This agreement could benefit both countries in the long run. The agreement that was signed between the two countries will serve as a stepping-stone in having a direct open trading for the Pakistani made garments. (Yarns and Fibers, 2006) The joint statement that comes from the Prgmea and the Textile Importers Association of Sweden aims to develop a good trading relationship between Sweden and Pakistan as well as the European Union (EU) since Sweden is a member of EU. Aside from the quota free agreement, the contract also helps increase the competence of the imported Pakistani jeans by removing the export tariffs when exporting these items to the rest of the European Union members. (Yarns and Fibers, 2006) On the other hand, the United States as a pure capitalist country. It means that wealthy business people that aim to maximize profits are the ones that have more power in the political system of the country. (U.S. Department of State, 2007) Argument on the Article According to Adam Smith, a great defender of the profit motive of businesses, that asserting efforts to earn profit on one’s own self-interest is not bad at all. (Donaldson, Werhane, and Cording, 2001, p. 132) He strongly believes that economic gain is simply a justice awarded to people who choose to strive hard at work. Therefore, in a free-marketplace, public welfare can be promoted as long as each citizen would engage in a fair economic activities as well as respecting the rights of other people. In a free market, people are eventually forced to be in a situation wherein heavy competition in terms of making a business successful, acquiring a land, earning some money, having a good career, and having a good business opportunity is very tight. For this reason, people become responsible in enhancing his knowledge and talents in order to compete with the demands of the market. We should never conclude that this is a bad situation that would result to unequal distribution of wealth. In fact, Smith agrees that competitive market is good because of its ability to generate affordable products and services in the market. (Donaldson, Werhane, and Cording, 2001, p. 132 - 133) As a critic of Adam Smith, Karl Marx stated that capitalism and the use of technology is a way of exploiting the workers as well as it widens the gap between the rich and the poor. (Donaldson, Werhane, and Cording, 2001, p. 133) He added that the use of technology creates a huge unemployment rate that results to offering the workers lower wages. I agree with Adam Smith in the sense that capitalism enhances economic growth and development. Without the use of technology, it would be impossible for us to live in the society that we have today. The Swedish law and its government have been effective in maintaining the competitiveness in the markets as well as keeping the unemployment rate in the country as low as 2%. Through the use of a strict government regulation, such as imposing a high taxation rate, Sweden is able to keep its poverty rate as low as possible. As of 2006, the poverty rate in Sweden has remained as low as 5.3%. (Berg, 2006) This figure is very much lower than compared with other developed countries like the United States or the United Kingdom. Sweden is one of the few countries that imposes a high personal and business tax rate. The country is using a progressive tax system. (Expat Focus, 2007) As of 2005, the municipal tax rate ranges between 25% to 35% while the national tax rate is between 20% to 25% depending on the individual’s income earning. The only good thing about Sweden tax system is that individual earning below SEK 16,700 a year are exempted from paying the personal taxes. (Expat Focus, 2007) This narrows down the gap between the rich and the poor. The collected taxes are generally used in the promotion of education, health projects, housing projects, and other social programs. (NAMyth, 2007) In fact, education is universally free in Sweden. In fact, the country is totally free from homeless, reckless, and notorious people. All these good effects of combining capitalism with socialism enable the country to sustain a high standard of living in Sweden. On the other hand, the U.S. being a pure capitalist is prone to abusive and corrupt government officials. According to Karl Marx, in a pure capitalist country, the business people are the ones that have more power than the majority of the average earning individuals. (U.S. Department of State, 2007) They have more control over the politicians when it comes to policy making. In the long run, the distribution of wealth within the country has become uneven. The gap between the rich and the poor becomes wider. Since U.S. is a pure capitalist country, the welfare of the majority of the citizens is not as protected as compared to Sweden. This resulted to a higher unemployment rate in U.S. than in Sweden while the literacy rate in U.S. is lower than Sweden’s literacy rate. For this reason, it is clear that some dilemmas in the business society are mostly rooted within the country’s political systems, laws, economic development, and culture. (Hill, 2006) The problem on Conclusion Sweden is considered as one of the most politically perfect country. For more than 80 years, the moralist and self-righteous country is being governed by the Social Democrats. (Democracy Frontline, 2006) The Swedish government makes sure that promotion and strengthening their culture, non-violence environment, democratic control of state activities by the civil society, and respect for human rights are being preserved for a very long time. (Embassy of Sweden, 2007) Promoting economic trading is also one of the main goals of the country. The signing of contract occurred between the Pakistan Readymade Garments Manufacturers and the Exporters Association (Prgmea) and the Textile Importers Association (TIA) in Sweden shows that the government supports a free trade within the country but remains under the control of the government. (Yarns and Fibers, 2006) Unlike in the United States, Sweden’s combined capitalism and socialism works for the benefit of the majority of its local citizens. In capitalism, the country practices free market wherein businessmen are forced to maintain a good quality products and services at the lowest possible price. The socialism acts as preventive measures in controlling the opportunistic business people through the use of a tight government control. Based on the news article, the Swedish government intervenes in the domestic market by entering into contracts with the developing countries that produces high quality goods at a lower price. This kind of government intervention would forcefully remind the players within the textile industry to keep its operational costs as low as possible in order for them to compete with the global prices of goods. On the other hand, socialism protects the overall welfare of the Swedish people. Through paying high taxes of as much as 55%, the Swedish government is able to control the unequal distribution of wealth among its people. The collected taxes are spent on promoting the general welfare of the Swedish citizens. Since almost everyone in the country is given the chance to acquire education, the literacy rate of its citizens is almost a hundred percent. This is one factor why the country has a very small unemployment rate. *** End *** References: 1 Berg, B. (2006) ‘Poverty and Welfare’ October 2, 2006 Retrieved: April 29, 2007 < http://catallarchy.net/ > 2 Democracy Frontline (2006) ‘Things One Should Know About Sweden’ April 4, 2006 Retrieved: April 21, 2007 < http://democracyfrontline.org/ > 3 Donaldson, Werhane, and Cording (2001) ‘Ethical Issues in Business – A Philosophical Approach’ 7th Edition. Prentice Hall. ISBN: 0130923877   4 Embassy of Sweden (2007) ‘Fund for the Support of Democracy and Human Rights in Mozambique’ Retrieved: April 21, 2007 < http://www.swedenabroad.com/ > 5 Expat Focus (2007) ‘Sweden Taxation’ Retrieved: April 29, 2007 < http://www.expatfocus.com/ > 6 Hill, C. (2006) ‘Global Business Today’ Charles W.L. Hill, 4th Edition. Chapter 4. 7 NAMyth (2007) ‘Leaders of Today Remind Us that Socialism WORKS!’ Retrieved: April 29, 2007 < http://www.namyth.com/ > 8 U.S. Department of State (2007) ‘America’s Capitalist Economy’ Retrieved: May 2, 2007 < http://economics.about.com/ > 9 Yarns and Fibers (2006) ‘Prgmea Sign MoU with TIA Sweden to Capitalize Opportunities of Quota Free Market’ April 2, 2006 Retrieved: April 29, 2007 < http://yarnsandfibers.com/ > Read More