Examine the benefits and drawbacks of the two economic ideologies covered in the lecture. Which system would you argue is a better approach for Canada in our current economic situation (bearing in mind the implications of COVID-19 on the economy) and why?
The economy and the lives of Canadians have been drastically impacted in the last year, resulting in our society being in an unprecedented position. COVID-19 has harmed every element of Canadian life, including education, housing conditions, expenditures, and employment opportunities (Evans, 2020). On the other hand, these lifestyle modifications come at a high price and significantly influence the Canadian economy. According to Yves Giroux, a legislative budget officer, the cost of compensating people who COVID-19 has harmed is likely to be roughly 146 billion Canadian dollars (Flanagan, 2020). It is predicted that the GDP of Canada will decrease by 12% in the year 2020 alone as a result of these expenditures (Flanagan, 2020). For the Canadian government to recover from its current predicament, the Federal government must reduce expenditure, boost revenues, or take on more debt, among other measures (Flanagan, 2020). As a result, while making a choice, one may consider Economic Liberalism as an economic ideology that might be used to put these prospective answers into action.
Economic liberalism, on the other hand, is a system that has been adopted by the modern-day United States and that allows companies, both private and public, to have complete authority over their money, commerce, and property. The system prioritizes individuals’ economic independence, limiting the government’s power (Racio, 2006). State control or involvement over firms and people is strongly opposed by the system, which instead authorizes complete control over demand and supply (Jahan & Mahmud, n.d.). In the end, Democratic Socialism would be the most effective strategy since it enables social and economic choices to be determined by the working class rather than businesses and elites. Rather than allowing the free market to regulate the consumer products industry, it advocates for democratic and cooperative forms of regulation (Arnold, n.d.). Recognizing the present economic scenario amid COVID-19, democratic Socialism would be the most beneficial solution for Canada’s economy. After all, the working class should be making social and economic choices since they are the ones who would be most impacted, rather than large corporate organizations.
Due to the continuing epidemic, there has been a surge in the price of basics such as food, toilet paper, hand sanitizers, masks, and Lysol. Many of the factors contributing to price markup have to do with supply limitations worldwide. For example, lower inputs, whether raw materials or constituent resources, impact the manufacturing industry (Miller et al., 2021). As a result, when manufacturers have a scarcity of supply, some items are in great demand, which is the markup source. COVID-19 has significantly impacted supply chain resilience and food supply chains, mainly due to panic buying, disruptions in supply networks, and imports and labor shortages (Hobbs, 2020). Demand-side shock is seen in Canada, where people have been stockpiling things to exhaustion. Consider the fact that when Canada was placed on lockdown, all local businesses were entirely sold out of vital supplies such as toilet paper, canned foods, bottled water, and a variety of feminine hygiene products. As a result of implementing social distancing rules, panic purchasing behavior is seen here (Hobbs, 2020). Nevertheless, manufacturers reacted promptly to this problem by imposing a limit of one item per individual. Still, they also took advantage of the situation by raising the cost of high-demand items to compensate for the restriction (Hobbs, 2020). In this trying time, if Democratic Socialism were to be adopted, the working class and the general public would have access to these necessities of everyday existence at cheaper costs than they already do since companies do not mark up prices to benefit from the middle and lower classes. As a result, raising prices on necessities of life only enriches the economy while making these difficult times more difficult for the working class. Instead of enormous corporate bureaucracy, decisions should be decided by the working class, who are the ones who would be most impacted.
Everything from pre-school to post-secondary education in Canada has been affected by COVID-19. Academic teaching and learning professions of professors and teachers have been reworked to curb the development of this disease. In other words, students and teachers have been teaching and learning digitally without their consent. There is no change in tuition or fees for schools and universities, and professors and faculty members are still being paid at the same rate, even if they must relocate course content online, teach more extensive courses, and work overtime. Consequently, the transition to virtual education has placed educators and students in financial insecurity and will significantly influence Canada’s economy (Ansari, 2020). OSAP funding was slashed by six-hundred and seventy million dollars in the fiscal year ending September 30, 2013. (Chidley-Hill, 2020). In addition to the disadvantage students face, colleges are bracing themselves for a decrease in tuition and a resulting deficit (Ansari, 2020). Over half of the university’s funding comes from government grants, while the balance comes from tuition fees (Ansari, 2020). As a result of the epidemic, students and their families cannot afford higher education, increasing deferrals of admissions. It is 2020. As universities and colleges account for 2.4% of Canada’s GDP and university students are the country’s economic future, a Democratic Socialist perspective is ideal for addressing this persistent problem (Ansari, 2020). Worker interests should be considered when making social and economic policies since they are directly impacted and play a significant part in Canadian society.
People with money, status, and political clout would gain control of the country’s political and economic decisions if Canada adopted an Economic Liberalist strategy. As a result, the working group would have to undergo certification, aggravating our existing economic condition. Because the upper-class favors free trade and cheap taxes, they will benefit from the free market. Considering the United States, a liberal democracy undergoing the worst COVID-19 wave globally. The epidemic has pushed the U.s into a recession, with the highest fatality rates in the world (Polyakova et al., 2020). Specifically, the American government’s reaction to COVID-19 safeguards was late, and the president was unprepared (Balogun, 2020). During the epidemic, President Trump disregarded the virus’s authenticity and ignored social distancing programs, stay-at-home laws, and the imposition of face masks (Balogun, 2020). According to Trump, economic liberalism is an ideology that lets affluent people grow wealthier, and his sluggish reaction to the epidemic proves this idea to be true. They demonstrated this when their income increased by 308 billion dollars, while many working-class people were forced out of the workforce and into poverty (Kelly, 2020). The proportion of taxes paid by the wealthy has dropped by 79% since 1980, although their wealth has increased dramatically (Kelly, 2020). Bloomberg, Elon Musk, the Bezos brothers, Steve Ballmer, and Eric Yuan all made over a billion dollars from the outbreak (Kelly, 2020). Nearly 80% of Americans depend on their paychecks, and another 20% rely on emergency assistance that is either nonexistent or of little value (Kelly, 2020). In light of these facts and Canada’s present economic predicament, Economic Liberalism may not be the best strategy, as the US is performing poorly, allowing the wealthy to become more prosperous. At the same time, the working class suffers in silence. Canada’s current economic situation necessitates that its most vulnerable citizens be forced to make the most important choices about their own lives.
Because of the profound impact COVID-19 has had on Canadian society and the economy. Democratic Socialism is the best course of action. The majority of Canada’s population, 60.09% of the working class and the general public, was affected by the epidemic (Statistics Canada, 2015). Workers are a significant portion of Canada’s overall population and should be allowed to make choices about the economy and society since it, directly and indirectly, impacts them. Overpriced living necessities like food and hygiene products make it harder for those who live paycheck to paycheck and families with significant numbers of members to make ends meet. By opposing price gouging and capitalizing on necessities like food and shelter, Democratic Socialism ensures that everyone has access to an equitable share of the nation’s resources and basic needs. The epidemic has had a devastating effect on Canada’s education system, affecting students, instructors, and professors of all ages and educational levels. The jobless working class is disadvantaged since financial assistance remains a significant component in obtaining higher education. Even teachers suffer since they are expected to teach large classes, relocate course content online, and work long hours for the same salary. A Democratic Socialist strategy may use the epidemic to reward both students and instructors for ensuring that kids can attend college and teachers are compensated for the time they spend adjusting to remote instruction and teaching. If Canada’s economic and social condition were handled by an economist liberal, like in the United States, the wealthy would continue to benefit from the epidemic while working people would suffer the consequences of many economic issues. During the epidemic, Canada is adjusting and doing well, and a democratic socialist strategy will further benefit the economy and society, both now and in the future, for all citizens.
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