I've heard this term a lot lately and I've also heard Obama being compared to a marxist or a socialist. So, instead of using the usual Chris or Paperboy argument of either "No he's not" or "Yes he is" I've decided to actually show people what socialism AND capitalism is in comparison to what John McCain AND Barack Obama want to do with income. For my example, I'm going to use what I know how to use the best, the production, distribution and sales of a magazine. First: We live in a capitalist society. The production and sales of goods are based upon the costs of production and sales. I.E. I have a magazine that costs me $3 per copy to manufacture. But I have additional costs besides manufacturing costs. I have an editor, a copy editor, and writing staff, plus design and sales staff. Their salaries are based upon an average of what people in their positions in their local market are also making. So, let's average it out and say, per copy the average price for my overhead is another $3. So I'll sell the magazine for $6 to meet my costs, right? No. I'll sell the magazine for $8 so can make a profit so I can expand my business in the future. Plus, you never know if there are going to be unexpected production cost increases and I want to be able to meet those needs should they arrise. Now, if I have a whole wad of money sitting in the bank, I could sell the magazine for $3 and not worry about how much profit I make. Additionally, since we live in a supply and demand society, I can freely raise the price of my magazine to $20 because the supply is tight and there is such high demand. Since my company is a private company, whatever I choose to pay my employees, myself and sell my product for is completely up to me. People who choose to buy my product can determine if my price is too high and not buy my product. They are free to either buy or not buy my product. I can hire the most experienced editor in the country and decide to pay him minimum wage if I wanted to and he chose to accept. Once again, we are both free to agree to a set price for his skill. His salary is also based upon supply and demand. If there are thousands of amazingly talented editors available in the world today, I can set his salary quite low and he can either choose to or not to accept my salary range. Additionally, if there are very few editors available and I have the demand for an editor, he can choose to only accept the position if I pay him $1 million a year. Thus, our capitalistic society is the most free society in the world. People are free to choose to do whatever they wish to do. The only government intervention that is made in the private sector of capitalism is that the government says if you hire a full time employee, this is the absolute minimum per hour you have to pay this employee. Also if you make a certain amount of income, you must pay a certain amount of tax to the federal, state and city government. The drawbacks of capitalism is that the training to acquire skills that would make you a limited supply so you can demand whatever salary you like, is very expensive. So, if you do not have access to acquire additional money to be trained for that, the market value of your skills decreases and thus your income decreases. This ultimately is the haves vs. the have nots. Thus people are economically segregated into different economic classes: Working class, lower class, lower middle class, middle-middle class, upper-middle class and upper class. People who have very little money because they have not been trained in skills that are high in demand, tend to live in areas that have very little money and thus are economically depressed areas. Capitalists feel this is fair because under the American constitution, everyone, no matter what race or gender, has the ability to be trained in whatever area they want. If you want to go to college, you can borrow money from the federal government at very low interest rates and take decades to pay it back. Unfortunately, the skill that you learned may not be as in demand by the time you learn the skill and thus you would be unable to find work, thus you would fall into the lower class or lower middle class trying to work at a job where there is ample supply and ample demand, thus creating a very small salary whereas your brother or sister learned a skill that is high in demand and low in supply and thus your brother or sister is being paid a high-end 6-digit salary. The way capitalism has evovled, is that there are very few skills that are high in demand and low in supply, and that there are many skills that are high in demand and high in supply. A possible outcome of this is one class of people being so jealous of another class of people, that it leads to class warfare. Thus comes along the Socialist and the Communist to save the day, right? Well, what is socialism? According to the Britannica, social and economic doctrine that calls for public rather than private ownership or control of property and natural resources. According to the socialist view, individuals do not live or work in isolation but live in cooperation with one another. Furthermore, everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it. Society as a whole, therefore, should own or at least control property for the benefit of all its members. So, using the above example of a magazine. Under socialism, I do not own the magazine. Everyone who works to produce the magazine owns it and thus is entitled equally, no matter how important or unimportant their role is, to that magazine's revenue. Economically, socialism denotes an economic system worker ownership of the means of production and distribution. In the U.S.S.R., state ownership of the means of production was combined with central planning what goods and services to make and provide, how they were to be produced, the quantities, and the sale prices (cf. Economy of the Soviet Union). Soviet economic planning was an alternative to allowing the market (supply and demand) to determine prices and production. During the Great Depression, socialists considered Soviet-style planned economies the remedy to Capitalism's inherent flaws monopoly, business cycles, unemployment, unequally distributed wealth, and the economic exploitation of workers. So if I wanted to start a magazine under a socialist government, I would have to get permission from the government to start this publication. Polish economist Oskar Lange, an early proponent of "market socialism", proposed a Central Planning Board establishing prices and controls of investment. The prices of producer goods would be determined through trial and error. The prices of consumer goods would be determined by supply and demand, with the supply coming from state-owned firms that would set their prices equal to the marginal cost, as in perfectly competitive markets. The Central Planning Board would distribute a "social dividend" to ensure reasonable income equality. This conviction puts socialism in opposition to capitalism, which is based on private ownership of the means of production and allows individual choices in a free market to determine how goods and services are distributed. Socialists complain that capitalism necessarily leads to unfair and exploitative concentrations of wealth and power in the hands of the relative few who emerge victorious from free-market competitionpeople who then use their wealth and power to reinforce their dominance in society. Because such people are rich, they may choose where and how to live, and their choices in turn limit the options of the poor. As a result, terms such as individual freedom and equality of opportunity may be meaningful for capitalists but can only ring hollow for working people, who must do the capitalists bidding if they are to survive. As socialists see it, true freedom and true equality require social control of the resources that provide the basis for prosperity in any society. Now Obama is being accused of wanting socialism because he plans to increase the amount of money being given to the government in the form of taxes by the people who have the most money, and decrease the amount of money being given to the government by the less rich, or middle class. Thus, some economic conservatives are saying "You're taking from the rich and giving to the poor. This is socialism." Using the above analysis of socialism, nothing could be farther from the truth. Obama isn't determining the social labor cost of products and the United States government isn't determining your salary and dividing your salary up equally with the number of workers you have. All Obama is doing is resetting the tax brackets to what they were under Bill Clinton 8 years ago. Obama is decreasing the amount of money that 95% of working families and individuals pay the government. Obviously, if you're not working, you're not earning income and thus you're not providing the government with income. So, is this taking from the rich and giving to the poor? Not really. This is taking for the rich and giving to the government. The poor barely pay any taxes right now anyway. The middle class, the group of people who spend the most money on this economy, are the ones that are benefiting the most from Obama's "trickle up" theory. If the middle class don't have any money to spend on the economy, for any "luxury goods (any good that are not essential)" then almost every single corporation in America will fail because the demand will fail. If people have no money, there will be no demand. What Obama is trying to do is actually quite interesting. Obama is increasing the demand, because increased money does equal increased demand. Examples of this are shown when President Bush gave tax refunds of a few hundred dollars to every American who's paid taxes right after 9/11 and earlier this year. Now John McCain is using classic supply side economics. When the people who create jobs and create products have more money, they will spend that money by creating more jobs and more money. Two examples of this are the roaring 20s and the late 1990s economy. President Hoover lowered taxes by 50% on the upper class as did Ronald Reagan. President Bush lowered taxes as well, but his tax decreases were very minor and didn't do anything for the economy whatsoever. John McCain's tax decreases are also unsubstntial and if we use past performance to indicate future results, John McCain's tax cuts will have no impact on the economy. It will, however; lower the amount of money the government expects to receive. If you lower taxes, you don't freeze spending, you cut spending. John McCain is lowering taxes quite a bit for the richest of the rich and with the $3 trillion the government has spent on this financial crisis so far, the fact that he is even discussing a tax decrease is troubling. The government needs more money to operate, AND the government also needs to cut spending. The only candidate who has proposed any sort of spending cut has been John McCain and his spending cut for eliminating pork barrel spending accounts for 1% of government spending. Obama has said he will cut spending to some programs, but increase spending in other programs. He hasn't really been specific. In conclusion, the right-wing assertion that Senator Obama will practice socialist economic theory in the United States governmen, using the analysis I provided above is clearly, 100% FALSE.