Critical Review of “Capitalism vs.

Socialism – an Attempt to Analyse

the Competitiveness of Economic Systems”

“This article is written by Marian Zalesko which depicts a comparative analysis between
capitalism and socialism. The article starts by explaining how different economic systems were
adopted and their function in the twentieth century. Then the five main economic forms were
mentioned which includes primal, community, slavery, feudalism, capitalism and socialism. The
author also mentioned that he will be taking GDP per capita as a measure to compare the countries
that are practicing socialist or capitalist economic systems. However, the comparison is only
limited to the years 1950-1989 which seems a little unfair and unjust to such a vast and complex
subject. The author defined “economy” in his article from different perspectives including David
W Conklins who explains that the “phrase economic system refers to the organizational
arrangements and processes through which a society makes its production and consumption
decisions” while according to Wilkin, “economic system is a set of directly and indirectly related
institutions, through which the process of production, exchange and distribution of products and
services is achieved. The nature of institutions and relations between them is decisive as far as the
basis of the system is concerned: the set of objectives pursued by a system, structure and
mechanism of decision-making process, resource allocation mechanisms and the distribution
patterns of values generated”. The articles states that capitalism is always viewed as a better
economic system as compared to socialism. All reviews by Kowalik, Samuelson and Schumpeter
suggest that Capitalism only to guide people behavior, adds rationality, free enterprise and
maximizing profits. Moreover, socialism talked about social justice and welfare. But the article
should have shed some light on how capitalism destroyed the economic system of America and
how a socialist leader gave them a better direction. The author then went on to take competitiveness
as a form of economic analysis between countries to compare the capitalist system with the
socialist system. The article gives a detail overview of the four levels identified by the German
Development Institute which were meta, macro, meso and micro. A detail explanation of all the
levels and a graph helps the reader understand the levels of competitiveness easily. Meta level
helps in social cultural factors, macro level covers the state policy, mesolevel covers the economic
policies of the state while micro level deals with activities of an enterprise. All these levels
interacting creates competitiveness. The article suggest that this was due to different institutional
systems of the economy such as standards, markets and organization which were highly developed
in capitalist countries. After this the author went to define why GDP per capita can be taken as a
measure to compare economic system competitiveness giving evidence that many researchers of
competitiveness believe that its best measure in an international context can be the volume of GDP
per capita. The author gives clear reasons with the help of evidence from Bruce R. Scott, mentioned
before Jan Fagerberg, Martin Srholec and Mark Knell or Anna Zielinska-Głębocka, among others
stating that GDP per capita can be used to analyse the economy at different levels including the
economic system. The article was ended with the words to two prominent economists, Peter F.
Drucker, “Capitalism as a social order and as a creed is the expression of the belief in economic
progress as leading toward the freedom and equality of the individual in the free and equal society”
and J.H. de Soto defines socialism “as system of institutional aggression on the free exercise of
human action or entrepreneurship”.”