Capitalism and Socialism
For over a century, we have been debating the merits of capitalism versus socialism. Although the debate rages on, economies around the world have been converging on a hybrid system, which I will call the modern economic system. The modern economic system uses both the state and the market to organize production and distribution. The market solves problems that the state cannot solve, and vice versa. In the modern economic system, capitalism directly produces most of the wealth (the goods and services that we use). The state expropriates a significant percentage of that wealth and uses it to do a lot of things. Some is distributed to the poorer members of society through welfare programs. Some is used to provide services, such as roads and education. Some is used to maintain state power internally and externally. A considerable amount finds its way into the hands of elites, where it funds both extravagant lifestyles and the pursuit of political power. The system tolerates an unequ