Final Exam #3

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Changes Necessary in Adoption of Socialism
Schumpeter outlines the necessities which must be incorporated into the society for the success of socialism to be realized. The main change to be advanced is the adoption of dictatorship instead of a democratic form of governance (Schumpeter, p.235). Schumpeter stipulates that the authoritarian form of leadership builds the group and moral aspects of socialism. Schumpeter puts forward the argument that taking socialism to be authoritarian rather than capitalism ensures that the labor force depends on the socialist power. The effect will provide room for other disciplines to be changed which could have been hard to change using capitalism. Schumpeter asserts that Authoritarian discipline is paramount in realizing increased productivity. Additionally, Schumpeter notes that the power contained in the capitalism are no longer in force hence socialism will bring restoration of power by imposing discipline on the private and public sector through monopoly and oligopoly market forces(Schumpeter, p.87).
Schumpeter outlines some elements which he believes they are necessary for the change to be realized. Firstly, the authority will assume that ministries which oversee the production are working for the benefit of all the people hence the supervision of their operations will be limited. Funding of the development projects will require that the private saving is substituted by abstinence as demonstrated by Soviet Russia (Schumpeter, p.

210).Secondly, Schumpeter lends support to training the youths in the society to conform to the requirements of the state. The idea will ensure that the public opinions are restrained. Therefore, the youths will be indoctrinated to no tolerance for public opinions. Thirdly, Schumpeter states that the socialism has to be achieved by employing ruthlessness in some instances. The use of command will bear fruits while organizing and coordinating large and small size business organization (Schumpeter, p.235). Schumpeter notes that the socialism will work for the leaders who are ready to take risks and to be burden with responsibilities.
Effects of Socialism on Individual Liberty
Public Ownership of properties has negative impacts on business individuals. The idea that the production and distribution chains are under government control limits the personal liberty to determine returns on investment (Schumpeter, p. 87).The public ownership of properties proves to be traditional, and it has some traits of capitalism which are not suitable for and individual liberty. The planning in socialism is done centrally hence an individual is not consulted in decision making. The objectives to be achieved are set by the governing authority hence an individual has to adjust to the plan by the directives imposed by the government.
The individual liberty on consumption preferences is limited. The goods and services are produced by state-owned firms which produce only the goods which are preferred by the most citizens. The goods and services are distributed to the public at fixed prices which are set by the state.AN individual will, therefore, be forced to use the products which are commonly used by the general public. An individual lacks liberty regarding the income given that the units of production are owned by the government. The income is distributed equally regardless of personal hard work (Schumpeter, p.145).
The pricing of the commodities is set and controlled by the central planning authority. The prices will be prone to various changes which include market prices and the accounting prices. The decisions on the prices of goods and personal investment procedures services are made with limited individual involvement (Schumpeter, p.111).
The Shift in Definition of Democracy
Joseph Schumpeter came up with his definition of democracy by first analyzing and criticizing the implication of former philosophy of democracy which stated that democratic method is one which political decisions are arrived at by realizing the common good of the citizens. The philosophy allowed the people to decide issues by electing those individuals who could assemble the orders systematically and carry the out. The weakness of this democracy was that there is no common good of the people since there must always be disagreement on the general matters of life (Schumpeter pg. 252). Schumpeter Joseph, therefore, had to define the democracy as a rule by the politicians whereby they compete for the common man vote. Therefore each citizen votes for his or her preferred representative whom he believes will carry out his or her opinion concerning every issue affecting their life. Schumpeter argues that the politicians have therefore used politic as their business deal in oil (Schumpeter, pg. 285). The politicians according to Schumpeter acquire the power to make these decisions that affect the lives of the people by competing for votes of the citizens.
Socialism Need not be Undemocratic
Schumpeter succeeds in showing that socialism need not be undemocratic by pointing out that even the politicians elected to represent issues affecting the people have dealt with votes like businesspeople dealing in oil which they can enrich themselves at the expense of the poor citizens who are only calling for democracy and can’t influence the decisions made. In this case, they force the citizens to focus on political goals over short-term periods rather than on long-term policy plans. Schumpeter argues that democracy or socialism puts politicians who are not necessarily talented administrators, diplomats, judges or leaders in power hence are always prone to misusing it (Schumpeter, pg.286). Also, all the citizen must respect and tolerate different opinions made by the politicians (Joseph, pg. 295). The politicians elected may not as well be well-trained, loyal nor professionally bureaucratic. In the democracy, all people must accept all the law adopted and developed self-control by not arguing about anything even if the laws are oppressive (Schumpeter, pg. 294).
Connection between Democracy and Freedom
Even though democracy of the voters has been defined basing on the people’s rights and interests, there is no full democracy since the opinions and individual’s issues are not represented by the elected politicians. Laws once made cannot be amended to suit everyone but are just forced to adapt and develop self-control given that it is not favorable (Joseph pg. 367). Therefore, there is little freedom, if any, since freedom is dependent on the democracy. When the politicians use the position and power, they are entrusted with oil business to enrich themselves while forgetting the woes of who they represent freedom and democracy are politically and economically compromised. Socialism is not a democracy because even if everybody has a vote, it costs the government a lot of money to run election now and then in all the election cycles and that money is only coming from the wealthy politicians whose business is on the votes. In this case, the freedom of the poor voters is undermined economically and politically (Schumpeter, pg. 379). The central government controls the military force to maintain peace in case there is a demonstration against the lack of democracy. The military is paid a large sum of cash which would have been used to improve consumers’ technology hence interfering with democracy and freedom economically (Block pg 55).
Friedrich Hayek views
Hayek puts forward the claim that the adoption of socialism signifies the return of feudalism in society. Hayek notes that some politicians erode the virtues of democracy with the view of fixing problems, but they end up creating more problems (Block, p.23).Hayek stipulates that democracy is important when the state is making decisions which affect its citizens. Hayek outlines, however, that there are limits in which democracy can be practiced. Erosion of democracy, for instance, with the need to protect individual liberty is highly defended by Hayek. Hayek also reiterates that interference by the government when it comes to the use of the property should be limited. The issue of limiting government interference is the main feature of socialism. Socialism limits the use of democracy in the society. Hayek strongly agrees with the removal of democracy when it comes to protection of personal property. Hayek notes that the socialism and democracy come in when solving problems that involve personal freedom and democracy (Block,p.54).
Hayek in most cases defend the old liberal ideas which were significantly different from the recent one. He supports individual liberty of letting every person arrange his destiny in his narrow location in to assure people of their security. He argued that wherever socialism exist individual liberty is destroyed. For him, he finds collectivism to justifying all issues and protects democracy and freedom of all people including their language. He said that virtues like freedom, law, and justice are issues tackled under collectivist goals. He also stated that Socialism in most cases eradicates the free choices of production, occupation as well as consumption which when interpreted means destroying democracy especially when the democratic government fails to check on the misuse of power (Schumpeter, pg. 404). Along with that, Socialism undermines the opportunities for the private wealth that the economy offers to its citizens.
Works cited
Joseph A. Schumpeter, capitalism, socialism, and democracy.
Block, Walter E. “Hayek’s road to serfdom.” (1996):