The income divide between the super wealthy 1% and everyone else has become a topic of great debate during 2015. Take a moment and go back in time to 1979 to the Phil Donahue Show (kind of the Oprah of his day) and his interview of Milton Friedman a Nobel Prize winning economist and one of the strongest proponents of the Free-Market System.
It appears that not much has changed since 1979 with the exception that the income gap has gotten even more pronounced. Watch this summary of Robert Reich’s points from his movie: Inequality for All.
The two basic types of economic systems are free-market systems, in which individuals and companies are largely free to make economic decisions, and planned systems, in which government administrators make all major decisions. The terms capitalism and private enterprise are often used to describe free-market systems. Communism is the most extreme type of planned system; socialism lies somewhere between capitalism and communism and generally refers to government ownership of fundamental services. The U.S. economy, like virtually all other economies, blends elements of free-market capitalism and some government control.
1. What is your emotional reaction to the terms capitalism and socialism? Explain why you feel the way you do.
2. Would you rather pay lower taxes and accept the fact that you need to pay for many services such as health care and education or pay higher taxes such as the Europeans (i.e. Germans, French, Italians, etc.) do with the assurance that the government will provide many basic services (Europeans get free health care and education including university) for you? Why?