With this social change came the developement of new social philosophies. An important critical thinker of the late 18th century who is credited as being the father of modern capitalism is Adam Smith. He put forward the idea of credited self-interest and free competition as the driving forces of a capitalist society. This complemented the new industries that were growing, especially in the United Kingdom as it implied Machiavellian approach to economics- „the end justifies the means“.
This individualistic attitude resulted in an acceleration driven by personal profit in all aspects of society. As the market and industry grew so did the gap between employee and employer. Without a social conscience to regulate it, the industrial revolution allowed desperate poverty to coexist with wealth and prosperity.
Socialism can therefore be seen as a form of counter-revolution. It believed in the pursuit of an egalitarian society. Further, it works on the basis of human need as opposed to personal profit. In other words, cotton was to be produced in terms of its direct consumption rather than relying on the consumerism of a free market system. In direct contrast with the system advocated by Adam Smith, socialism calls for a regulation of a nation´s economy in corresprondence to the national government. In this way it can be seen as similar to communism.
Communism and socialism are often seen as interchangeable, as the play write George Bernard Shaw said: „Socialism is the same as Communism, only better English.“ Commmunism was developed later in the nineteenth century by Engels and Marx and may be seen as a branch of socialism. Communism calls for complete unification of state and economy, with a nationalisation of all secters. But socialism doesn´t imply the rejection of a capitalist or democratic system. Socialism may retain the capitalist market but regulates and operates it in accordance with the will of an egalitarian democracy which represents the voice of the majority rather than that of the priviledged. This doctrine is known as social democracy.
It is perhaps this confusion between communism and socialism which has given the latter such a bad name. With the collapse of the eastern block and a globalization of the orignal free market model proposed by Adam Smith, socialism risks being seen as a back water or even a potential threat. The totalitarian regimes of Lenin, Stalin and Mao have all invoked socialism despite operating communist governments. In trying to find material on socialism, I came across a quote by George Orwell, which might just prove my point: „As with the Christian religion, the worst advertisement for Socialism is its adherents.“
And so, society may have been too hasty in the condemnation of socialism as a failed attmept. While it is true that its application via communism has proved impractical, it exists in other forms such as social democracy. It has been responsible for the developement of the welfare state and equal redistribution of wealth in correspondence with the globalisation of the world market. At its roots in the nineteenth century it was also responsible for movements such as the Reform Act of 1834 in the United Kingdom or the developement of trade unions, particularly in France, both moving towards universal representation in politics and in industry.
Further, the recent global crash followed a consistent deregulation of markets as national governments held increasingly less power in their economies. This was reverting to a purist free market capitalism which relies completely on the market to regulate itself. Therefore, if socialism is to be thrown out with communism, capitalism must also be rejected due to its own failure.
