When going to buy a kg sugar one might find the prices already marked on the packet. Ever wondered who decides the prices? First, Let’s dwell on the question of whether price determination matters. It doesn’t because in one way or the other, individual buyers and sellers need to trade their goods and for that, a joint consensus through competitive bargaining can be reached. This is the market mechanism that expedites the price determination measure more efficiently. But what is so bewildering is the fact that certain economies condemn this approach. The Question is why?
There is a trade-off between efficiency and equality. Economic efficiency stands for a greater outcome of limited resources. The cost that efficiency captures must be minimized. This cost is related to opportunity cost or the alternative use of those resources. It primarily emphasizes on augmenting production levels through suitable marginal levels. This economic model is preached in economies like the USA, South Korea, United Kingdom and many other economies labeled as capitalist. These economies focus on improving the efficiency levels of the economy.
On the other side is equality that pertains to equal allocation of resources in the economy. Note that the principal doesn’t matter if it is adequately sufficient to meet the basic requirements of an individual – what matters is all stand equal. Moreover, the power of certain resources in one hand tends to induce inequality that violates the basic principle of this model. Therefore, all such economic rights that infuse repressive feelings are in the hands of a group of individuals that generally follow paternalistic governance. This is somewhat the scenario in China, Cuba and North Korea. Such economies where the control over all major resources is vested upon state are called Socialist economies or in its intensive form called Communism. It devours political as well as economic rights of an individual.
The efficiency equality trade-off ignites the most crucial age-long question of a utopian economy. A utopian economy breaks the constraints of this trade-off as it marks all individuals equal and efficient. But this is and will always remain a legend. The world is a zero-sum game of resources: one gain at others’ loss. This is where the two political approaches diverge – the ideological difference between capitalism and communism or socialism delves into the so-called Individual Freedom. Emphasis on an individual’s freedom hampers the growth of others, while the restraint on freedom would galvanize inhumanity through warfare and rebellion.
The drive for a utopian society which is, in reality, a myth, cannot be achieved until humans acquire complete control over the production of natural resources. Most importantly, in today’s world, the paucity of resources demands society to not only focus on tolerable equity but also sustainability. The goal of sustainability severe both ideological conventions and envisages a process of resource accumulation that would increase the opportunity cost by infinity. Neo-capitalism is probably the only way out as it demands a tinge of a paternalistic approach to the capitalistic economy. This is true in a democratic nation like the UK and Japan. What is utopian is not achievable and what seems achievable is Neo-capitalism. Perhaps Neo-capitalism is the most alike Utopia.
Destiny with Truth 