Capitalism or Socialism? Common Dreams

The United States prepares for the 2020 presidential election and Republicans as the party in power insist that their opponents, the Democrats, are increasingly socialist and want to upend the capitalist system. Proper economic governance cannot rely on all capitalism or all socialism, and the definitions suggest that successful and prosperous countries rely on a combination of both. “Tools of socialism, including government support of education and health care, have produced tremendous cost savings, explains Robert Freedman for Common Dreams. He blames capitalism for climate change, inequality and unmanageable debt levels and credits socialism for the internet, great infrastructure investments, a growing middle class with rising wages in China, economic recoveries after disasters like the Great Depression during the 1930s and the 2008 global debt crisis. Freedman concludes that socialism is “demonized by concentrated private wealth precisely because it is so effective at redressing so many of the problems that concentrated private wealth has inflicted on society and the world.” – YaleGlobal

Capitalism or Socialism? Common Dreams

Socialism isn’t simply about public ownership of resources; it’s collective action in pursuit of common goals, where private action has eroded the common good
Robert Freeman
Monday, April 8, 2019

Common Dreams: We already know the most hackneyed slogan of the next election cycle: “socialism.” Utah Representative Chris Stewart has even launched and “Anti-Socialism Caucus.”

But socialism has lost a lot of its epithetic punch since the days of the Cold War, when the world lived under a nuclear Sword of Damocles. Here are a few reasons, on both sides, why socialism doesn’t sound so scary anymore. You might want to save it to parry the lunatic ravings of your crazy uncle at the next family gathering.

Ten important things that Capitalism has given us: 

  1. Cataclysmic climate change, literally threatening life on earth.  Markets cannot price common public natural resources, like the atmosphere or oceans or polar ice caps, though they undoubtedly have value.  So, the prize goes to who can use them up first.  A perfect prescription for planetary predation.
  2. The Great Depression of the 1930swhere the capitalist system blew itself up, dragging the whole of the rest of the world down with it, and giving direct rise to Adolf Hitler.
  3. The Great Recession of 2008, where the capitalist system blew itself up again, dragging the whole of the rest of the world down with it, and giving indirect rise to Donald Trump.
  4. The greatest economic inequality in the developed world, literally approaching feudalism and destroying democracy to make sure there can be no public regulation of obscene private predation.
  5. The highest health care costs in the developed world, by far, and with some of the worst outcomes in many categories.
  6. Runaway, parasitic military spending, and for a military that can’t seem to win any of its wars—think Vietnam, Afghanistan, Iraq, Syria. 
  7. A decimated industrial heartland and a cast-off industrial workforce of tens of millions of workers that used to be the envy of the world.
  8. Skyrocketing “diseases of despair” including the world’s worst national opioid epidemic and a declining average life span for the entire population.
  9. The highest rate of incarceration of its citizenry in the world, by the U.S., with 784 of every 100,000 people in jail. Russia is far back in second, with 581.
  10. $22 trillion of national debt, or $67,000 for every man, woman, and child in the nation.  With insufficient purchasing power in the hands of workers, this is the economic cocaine that’s needed to keep the economy going. 

Here, on the other hand, are 10 important things Socialism has given us:

  1. China’s economy which is blowing the doors off of the United States.  The income of the average Chinese worker is up 10 TIMES over the past 40 years.  Median U.S. incomes are flat over the same period.  Which workers do you think are more loyal to their system?
  2. Nordic countries—Finland, Sweden, Norway, Denmark—with the highest self-reported rates of happiness in the world.  All proudly practice democratic socialism.
  3. Recovery from the Great Depression via public programs that employed millions, like the Civilian Conservation Corps, the Works Progress Administration, and others. 
  4. Recovery from the Great Recession, albeit by the government replenishing the capital of the big banks that had been driven to actuarial bankruptcy by their own greed.
  5. The internet—yes, it was invented by DARPA, the Defense Advanced Research Projects Agency, in 1969, and only later commercialized.
  6. The interstate highway system that created the first unified, continental-scale market, setting off the greatest economic boom in the history of the world.
  7. National standards for safe drugs, foods, and workplaces, and virtual eradication of tuberculosis, smallpox, and other major diseases.
  8. Social Security so that elderly people can retire with a modicum of dignity and security.  Without it, 40% of the elderly would be in poverty. With it, only 9% are.
  9. Medicare, again, so elderly would not be bankrupted by health care costs.  Medicare has administrative costs that are 1/10th those of private (capitalist) health insurance programs. 
  10. The global campaign to fix the hole in the ozone layer, caused by chlorofluorocarbons.   The hole was threatening the world with catastrophic levels of ultra-violet rays.  Collective action fixed it.

Socialism isn’t fundamentally about public ownership of private resources. It is about collective action in pursuit of common goals, where private action has destroyed or damaged the common good. It is demonized by concentrated private wealth precisely because it is so effective at redressing so many of the problems that concentrated private wealth has inflicted on society and the world. 

Robert Freeman is the author of The Best One Hour History series, which includes World War I, The French Revolution, The Vietnam War, and other titles.  He is the founder of One Dollar For Life, a nonprofit that builds infrastructure projects in the developing world from donations as small as one dollar.                     

Investopedia Defines Socialism and Capitalism

The website that offers advice for investors emphasizes: “Most modern countries practice a mixed capitalist system of some sort that includes government regulation of business and industry.”

Socialism

“… a populist economic and political system based on the public ownership (also known as collective or common ownership) of the means of production…. In a purely socialist system, all legal production and distribution decisions are made by the government, and individuals rely on the state for everything from food to healthcare. The government determines output and pricing levels of these goods and services. Socialists contend that shared ownership of resources and central planning provide a more equal distribution of goods and services and a more equitable society.”

Capitalism

“…  an economic system in which capital goods are owned by private individuals or businesses. The production of goods and services is based on supply and demand in the general market (market economy), rather than through central planning (planned economy or command economy). The purest form of capitalism is free market or laissez-faire capitalism, in which private individuals are completely unrestrained in determining where to invest, what to produce or sell and at which prices to exchange goods and services, operating without checks or controls.”

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Comments

Socialism vs Capitalism is a false dichotomy.
Also, this contrast is highly biased. Capitalism has given many more benefits than costs (e.g. lifting hundreds of millions out of poverty).
Finally, all the elements attributed to Socialism have elements of Capitalism in them (and the same could be said about Capitalism´s triumphs: they all have elements of Socialism and collective action).
DICHOTOMIES ONLY SERVE THOSE WHO WANT TO DIVIDE & MANIPULATE.

The author has failed by ignoring liberty in the nations he so lauds.

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