Socialism is the way forward

Thank you for accepting the challenge. Let me start by talking a little about socialism. Socialism states that it aims to bridge the gap between the rich and the poor. In order to do this, all the assets are to be controlled by the State. This system of running an economy is, in theory, a perfect ideology. But it is merely an ideology. Socialism stresses on equality. This is morally right. But in the long run, it is a flawed concept that will not be able to sustain itself. Socialism hampers productivity of the country in various ways. Under the concept of socialism, a manufacturer can only produce what the state thunks is necessary for the economy. Production takes place on the basis of "necessity" rather than the "purchasing power". As a result, manufacturers tend to be restricted in their production by the State. They cannot expand production unless the state approves it. This leads to a loss of potential production capacity as well as loss of a potentially large consumer base. Expanding internationally is also quite a big problem. Foreign market players also find it difficult to enter such markets. Socialism also tends to tax the rich more heavily than the poor. This too, has its own adverse affects. Lets see how in today's economic environment, socialism will fail to achieve its goals. The market has become extremely competitive. Keeping this in mind, we can clearly understand that any country that restricts it's production is inevitably smashing a hammer on its own foot. Restriction of production has two significant impacts: 1. It results in a fall in GDP. A fall in GDP can further lead to inflation or even worse economic indices like 'Stagflation' (as seen in India currently). 2. It deprives the country of an exposure to foreign markets. This will lead to a loss of exports for the country. It was also result in the country losing out on valuable Foreign Direct Investment (FDI) and Foreign Institutional Investment (FII). These will take the economy into a dangerous zone and can lead to devaluation of currency and loss of investor confidence. When the market gets restricted due to socialist policies, foreign companies find it near impossible to enter the market. This causes severe problems within the country. The local manufacturers, seeing the absence of foreign competition tend to take it for granted that people will buy their products. This leads to the production of substandard products which is again harmful for the economy. Taxing the rich more heavily than the poor has its own drawbacks. When we tax the rich more than the poor, they lose incentive to earn more and make bigger profits. Even if they make profits, they will hide it illegally through window dressing in order to save on tax leading to a loss in Revenue Receipts for the government. This tax is a valuable source of income for the government. Failure to collect this tax can lead to problems like a Fiscal Deficit. Thus in a competitive environment, the ideals of socialism stand strong in principle but not in practice. Socialism cannot help any country today.The only way a country can grow economically is by adopting a more liberal and industry friendly economic ideology.