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Cuba: Capitalism vs. Socialism

****NOTE: THESE QUESTIONS PERTAIN TO COLLEGE GRADUATE LEVEL ECONOMICS.

Please click the following link. http://www.mhhe.com/economics/solman_video_mov/capital_cuban.mov.

Once you have reviewed the content, please answer these questions:

Why is a struggle underway in Cuba between social equality and the free market? Why did Cuba permit free markets? Who in the video wants Cuba to remain socialist? Why? Who in the video prefers free markets and capitalism? Why? What is the role of incentives in this struggle? In your view, which force will win? Why? In completing this post, consider how a market economy versus a socialist economy allocates resources.

*Other references, along with the video can be used to support the answers to the questions.

** The attachment is the transcript (word form) of what the video is saying.

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Solution Preview

The fight between capitalism and socialism has been ongoing for over a century. The question, about which system is better, in the mind of the public, depends on who is being asked. Some people swear by socialism as the way an economy should function, and some swear by capitalism. The question is, "why are there so many different views?" This question is best answered by knowing the difference between the two systems. Capitalism is a free market societal ideology that allows individuals to control means of production, and the price that a product is sold for (Capitalism vs. socialism: The cuban quandry, 2011). In a capitalistic society, there can be an extreme amount of competition across the board. Socialism, on the other hand, is a state controlled market system where prices are set by the state and wages are paid by the state in equal amounts to maintain equality across the board (Capitalism vs. socialism: The cuban quandry, 2011).

Why is a Struggle Underway in Cuba Between the Two Systems

Understanding the premise of both systems, it would seem that many people would find Socialism to be the fairest way to run a society. The fact is that for all of Socialisms good points, it does not work as well as it sounds. For example, when everyone is getting the same wage there is little to no incentive for workers to produce product at a higher rate or quality (Capitalism vs. socialism: The cuban quandry, 2011). The idea of Capitalism gives entrepreneurs a chance to achieve higher wages with extra effort. This gives incentive for better quality and higher production amounts, because pay follows performance (Capitalism vs. socialism: The cuban quandry, 2011). The reason for the struggle in Cuba stems from the benefits perceived by each side.

The Socialistic Side

In the video, there are those who side with Socialism as ...

Solution Summary

This 1223 word solution is tied together with 3 references. It outlines the differences between communism and capitalism by taking a look at the battle between communism and capitalism in the nation of Cuba. It outlines both sides of the issue in a fair, balanced and systematic fashion.

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