The War on Words: Socialism and Capitalism

This is the third post in a series of however many I feel like blog posts on the misuse and abuse of language with regard to hot-button issues.  For some context, it might be helpful to read the posts in order starting with the first one.  The second one may also be of interest.  I may wrangle up a fourth one if the whim strikes me.

The War on Words continues across the graphic displays of economic principles and through the rhetoric-littered halls of deceased revolutionaries like Lenin, covered in the blood of those to whom they wished to grant equality.  This hall is bathed in the sweat of those who labor for hours on end and take the risks to life and limb while those in authority over them take the lion’s share of the fruits of that labor while enjoying all the comforts of life denied to those who labor.

There have been many claims about President Obama related to socialism.  He’s been charged with being a socialist and with enacting socialist policies, and “ObamaCare” has been described as socialistic, which is somewhat ironic given that it was modeled on the “RomneyCare” legislation put into effect in Massachusetts.  For some folks, being called a socialist is a great compliment, because they see socialism as a grand step towards true equality and a more just society.  For others, being called a socialist is to be equated with mass-murdering tyrants like Hitler or Stalin.  So what is socialism?  The dictionary provides a straightforward answer, which is that you have socialism when the means of production are collectively owned.

So what does that mean?  Well, it’s complicated.  For some socialists, it means an authoritarian state and a command economy in which the state directs the path of industry.  For others, it means local or regional workers’ cooperatives and federated autonomous communities with free markets.  And even those simple distinctions don’t do credit to the wide range of socialist perspectives.  So if we’re going to evaluate whether or not Obama is a socialist, we have to look at his actions.  If we take “ObamaCare” as an example of his favored policy, it is very difficult to see how we could legitimately call him a socialist.  The legislation doesn’t create state ownership of the health care industry, nor does it establish workers’ cooperatives as the structure for that industry.  It leaves the healthcare industry in private hands, which is not very socialistic.  What it does suggest is that Obama is in favor of regulating markets in such a way that individuals have greater options for purchasing healthcare and penalizing those who choose not to have it.  Those are certainly authoritarian policies, but they don’t comprise a socialistic approach to policy.  It could be fairly said that our President is in favor of strong social welfare programs, and that supporting strong social welfare programs is the kind of wealth redistribution managed by the state that socialists tend to favor, so his position is closer to socialism on the political spectrum than laissez-faire capitalism is to socialism on that spectrum, but what isn’t?  And speaking of capitalism…

I’m not sure many folks in the U.S. know what capitalism is any more than they know what socialism is if we use political rhetoric as any indication.  I’ve heard capitalism described as the greatest thing that allowed for the invention of sliced bread and the only true expression of individual economic freedom that allows for social mobility and growing economies.  I’ve also heard it described as the policy of our federal government favoring large corporations with sweetheart deals on loans, regulations that help them maintain market dominance, and allowing them to use massive political campaign donations to influence policy while crushing the proletariat under their heels. 

So what is capitalism?  If we look at the dictionary, it indicates that in a capitalistic system, private individuals own the means of production and most wealth is distributed and exchanged by individuals rather than the state.  Capitalism can take several forms, including free market capitalism, mercantilism, and corporate oligarchy.  So if we look at the U.S. economy, do we see capitalism?  For me, it’s difficult to tell.  Apart from the fact that there are many kinds of economies described as capitalistic, it seems that the means of production, apart from national parks and such, are privately owned.  Of course, the means of production are owned by many of the same private individuals who are politicians and high-level bureaucrats, and leading figures in large corporations often end up getting political appointments or strongly influence policy via their money.  Someone could be forgiven for thinking that it’s hard to tell whether we have merely systemic corruption or socialism.

Ultimately, it’s of very limited use to call anyone a capitalist or a socialist without at least making some basic distinctions, because capitalism and socialism can look a great deal alike when they are both closer to the middle of the economic spectrum that exists between the two in their pure forms.  My suggestion is that if ideologues on either side of that spectrum want to test their ideals on the playground of reality, we had better end the systemic corruption first, because neither socialism or capitalism does well at accomplishing their goals when they serve to benefit primarily the few at the top of the economic food chain.

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6 Responses to The War on Words: Socialism and Capitalism

  1. Thank you. I could go into great detail why the “socialism” meme is soo wrong. If anything Obama is a neo-keynesian dude. 

  2. Nous_Apeiron says:

    @SolidStateTheory – He is definitely in the Keynesian tradition, yes.  That’s my assessment as well.As far as the meme goes, it’s minimally true in an effective socialist state, much more true in an ineffective socialist state.  It could also be true to various degrees in mixed economies.  How true it is depends on a lot of other factors like cultural values, family structures, dependency ratios, retirement ages, etc.

  3. quest4god says:

    The fact that is that in both scenarios you have a few at the top (relatively speaking) who direct or control the means of production and commerce. In socialism as we have seen it (no working model has been instituted an a national scale that doesn’t put the administration into a few select hands) the net result is that people lose incentive for one thing because there is no reward or point in producing well or striving for more efficiency. In capitalism as it has evolved, the government is gaining more and more control which also discourages new starts in business and industry because the weight is at the top with a few select hands in the pot. This latter resembles the Nazi government in that respect. Either of the models you described could work for better to those who produce, but I prefer the laissez-faire model for many reasons.Any time there is a government that is allowed to tax and regulate, there will also be corruption and blackmail.

  4. Nous_Apeiron says:

    @quest4god@revelife – I prefer the laissez-faire model as well, though I suspect that it would be nigh on impossible to maintain even if we could implement it, due to the Iron Law of Oligarchy.  Both capitalism and socialism are subject to it even if there are no states involved (anarcho-capitalism and anarcho-socialism), and regardless of the economic system folks will cheat the system unless there are strong cultural imperatives for strict moral integrity and high levels of social accountability independent of state authority even where there is a state.

  5. Wasn’t it Marx and his buddy (Engels?) who suggested socialism was the eventual maturity/evolution of capitalism?

  6. Nous_Apeiron says:

    @Billy_Austin714 – Something like that, yes.  He took the notion that the course of history is predictable and was predictably wrong on some points.  Complex social systems are not predictable with regard to moderately specific events in the long term.  At best, you could predict outcomes with some success over short terms, like days or weeks.  Predicting outcomes over decades is extremely difficult.  Being really vague about your predictions is the best way to manage that.

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