Research Paper on Social Democracy

Introduction

Social democracy is defined as a political system that promotes social justice and equality within a market economy framework. In this form of democracy, it promotes the idea that the government of a country should provide its citizens with security and equality while ensuring that the country has a conducive environment for economic development. In order to facilitate this, the government should be committed towards representative democracy, provide adequate measures to facilitate income redistribution and regulate the economy in such a way that its greatest interest is the society, and not corporations (Gershon 1). The promotion of social justice within a capitalist framework ensures that the whole society benefits and not just the rich people. It also provides a variety of benefits to the society such as free healthcare, education, and financial services such as welfare and pensions. In addition to that, it promotes and defends the workers' rights- they are provided with a fair compensation, and also work in appropriate conditions.

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In socialism, it dictates that the means of production are either governed by the public through the federal and state government, or by the employees. In this set-up it allows the state to be able to provide a variety of basic services such as healthcare, education, child care, housing and even energy to all, or at least a majority of the citizens in a country at a significant discount (Hughes, et al. 44). Social democracy allows for the redistribution of the country's income and wealth through the power of the state ensuring that it is not largely controlled by 1% of the national population. It reduces the income inequality disparity and economic challenges of a country. Why is this important?

The debate on economic inequality has been at the center of the country's debate since the Great Depression and was reiterated after the financial crisis of 2009. It highlighted the susceptibility of a majority of Americans to any financial crisis that may take place in the country. This is an indicator of the huge flaw of the country's economic system whereby according to the analysis conducted by the Economic Policy Institute it showed that the wealthiest 1 percent of Americans control 35.6 percent of the country's total wealth. In addition to that, the richest ten percent in America control 75 percent of the country's wealth, and this leaves only 25 percent to be controlled by the remaining 90 percent of the American citizens. In addition to that, it is the source of a majority of the country's societal problems, slow economic growth, increased influence of the country's politics by the wealthy people and increased debt percentage of middle-class people.

The solution of the problems that have been identified is to either expand or create social programs that will mitigate the effects that a majority of the Americans have felt over the previous years. These programs will include a more effective healthcare insurance program than Obamacare, universal education as is being witnessed in Scandinavian countries (free primary and secondary education, and reduced cost of tertiary education), and the eased eligibility for unemployment insurance, increase of minimum wages. It will also be important to ensure that the employees are given a more participatory role in the decision-making of the companies that they work for. The reason for this is that they are one of the main stakeholders, and any decision made by the company has a direct or indirect impact on them. There is the argument that these sectors should be controlled by the private sector. However, the primary role of a majority of the private companies is to make maximum profit by any means necessary. As was highlighted in the documentary Sicko in relation to the US health insurance companies prior to Obama-Care, these health insurance companies took advantage of 'loopholes' in the health sector to deny coverage of sick insured people ("Inequality for All - Full Movie"). They denied health coverage to people because of minor diseases such as a Cold Flu. Therefore, the private sector does not have a moral obligation to meet the needs of the majority of people in the society. How will the US ensure that it covers the costs of the social programs that it has introduced?

Taxation is one of the primary sources of government revenue. Therefore, the US government will have to improve its taxation measures. Currently, it is estimated that the US government revenues from taxes are approximately 37% of the GDP. To include the social programs that have been mentioned, it will have to increase its taxation percentages by only 10% to 47%. This will enable it to have enough revenue to ensure that the impact of the social programs introduced will be felt by the majority of the citizens of the country. This will mean that the federal government will increase its taxes on the wealthy people (it happens through the taxation of their estates when they are dead. Therefore, the taxing system should fairly tax them based on their wealth while they are alive, or is the country afraid of the wealthy?), implement a national consumption tax (VAT) and also increase the payroll tax. The federal government will need however to ensure that the tax rates, especially on the wealthy people are not too high as to negatively affect economic growth.

In relation to the VAT and payroll tax, they are highly likely to be successful in a social democracy environment because of two factors that achieve the same purpose. Firstly, as has been noted before in a social democracy framework, the government is largely responsible for the provision of a majority of the social services such as health-care, housing, and education (Meyer 78). This means that the majority of the population is not using a lot of their earned money to pay for these services. Therefore, even if the taxes are increased, they still have enough or adequate money to spend (it eliminates the hand to mouth culture in terms of earnings). There will be less resistance to the increase in taxes. Secondly, in a social democratic framework, the minimum wages will be increased to a level where a majority of people are able to afford a decent way of life. A majority of the American citizens will not be opposed to the new form of taxes if they lead to the betterment of their lives. If properly managed, the increased government revenue will lead to the provision of more business opportunities in the country. The government will be able to create optimal environments that will encourage investors, especially in the manufacturing industry to open up industries because of the reduction of the cost of production. Companies will reduce their outsourcing efforts and this also increases the employment opportunities of the American citizens, ultimately reducing the number of unemployed people in the country.

Social democracy provides an ideal environment to increase or improve the role of the employees in the decision-making process of their companies. This will be achieved by strengthening the trade unions in the country. These trade unions will not only fight for the wages of the employees but also the working environment of the employees. Employees will be involved in the negotiation of the numbers of hours that they work, incentives, physical, and social environments. The benefit of this is that it will generally improve the majority of employees, motivation, engagement, and satisfaction level at their workplace. This will have a positive effect on their performance level, and therefore improve the overall revenue of the company.

Conclusion

In conclusion social democracy I feel will have a positive impact in my life through the achievement of the following. Through this form of democracy as has been highlighted in this paper, it will address the issue of economic inequality in the country. It seems unfair that currently, 10% of the country's population controls 75% of the country's wealth (Meyer 17). It provides them with a lot of economic and social power to the point that if this wealth falls into the wrong hands through inheritance or any other method, the country can easily be driven into another major economic crisis. However, it is also important to note that in a social democracy it does not mean that the wealthy will be forced to 'give-up' their wealth, it only provides a favorable environment to allow the other 90% to improve their financial standings. Social democracy also ensures that the government is responsible for the provision of basic services such as healthcare, education, and housing (Nation Company 212). A majority of the country's citizens cannot afford these basic rights and it leads to an increase in various social ills such as crime and drug abuse. However, if a majority of the population is for instance educated, they will have the required skills to either be employed at organizations that require their skills or become self-employed and achieve a certain form of financial independence. It will reduce the number of gangs especially in low-class neighborhoods as the youth and teenagers, and reduce the insecurity levels in these areas. Overall, I am not saying that these changes will take place immediately but if given a chance, I believe that the US can be more successful using the social democracy framework than the Nordic countries especially because of its diverse nature.

Works Cited

Bontekoe, Ronald, and M T. Stepaniants. Justice and Democracy: Cross-cultural Perspectives. U of Hawai'i P, 1997.

Gershon, Livia. "IF INEQUALITY IS THE QUESTION, IS SOCIAL DEMOCRACY THE ANSWER?" JSTOR Daily, 8 Feb. 2016,

Hughes, Langston, et al. Let America Be America Again. George Braziller, 2004.

"Inequality for All - Full Movie." YouTube, 26 Nov. 2016, www.youtube.com/watch?v=fjYlr5G22IY&feature=youtu.be.

Kenworthy, Lane. Social Democratic America. OUP USA, 2014.

Meyer, Thomas. The Theory of Social Democracy. Wiley, 2013.

Nation Company. The Nation. Nation Company, 1999.