Abstract

A pure capitalist system has private ownership of wealth and administration of the economy via markets. As pure socialist system has stare ownership and administration by a bureaucracy. One offers growth and insecurity, and the other offers security and stagnation. In reality, neither has existed nor can exist for long. The feasible alternatives are welfare capitalism and market socialism. Over the last fifty years, the transition from welfare to corporate capitalism has taken place in the West under U. S. leadership. It has resulted in increasing insecurity and inequality within rich countries and between rich and poor countries. The transition from bureaucratic to market socialism in China over the last twenty years has brought to its people amazing growth and prosperity- and many of the ills of a market economy. It remains to be seen whether market socialism in China is an attractive alternative to welfare capitalism, or is no more than a transition to corporate capitalism.

JEL Classification: P51.