The Daily Journalist community opinion.
Intro to the question.
First I would like to mention, that I am not against capitalism.
I had a brief discussion with one of our contributors about the difference between socialism and capitalism. He mentioned that the US was no longer categorized a capitalist economy; he believed the US turned into a socialist system. His idea was that “pure capitalism” would ease all financial and social problems in the US. He also disputed that socialism only leads to corruption stalling economic growth.
Socialism comes in all forms and colors. I agree socialism under the wrong guidance can turn into corruption, especially in Mediterranean countries; nevertheless, if lobbying in the US is not considered a legal term for bribery then I must be confused with the connotations describing the word ‘corruption’.
Since I was a teenager, I lived in a western socialist country. After living in the US, I can determinately concur that the current financial and social reforms experienced here are not what I would label socialism. I think most free market thinkers purposely confuse the the word ‘regulation’ with ‘socialism’ to challenge the status-quo.
Socialism notoriously gives the working class more benefits and securities. The US welfare system is not linked with western socialism; it’s a product of US capitalism. In fact, the working class in the US unlike the 40’s-70’s no longer exists; it’s being replaced by illegal and legal immigrants. Socialism mainly benefits social workers, but only if they are actually employed.
I would argue that social programs in most western socialist countries are well spent and benefit everyone: Community parks, free recreation centers, plazas, free community gyms, public squares, local clocks, drinking water fountains, free healthcare (nothing to do with Obama care), job security, no consumption taxes…none of these socialist programs exist in the US; everything is privatized. What US pro-capitalist call Obama reforms has little to do with socialism.
The stigma of Leninist-communism prevalently remains strongly attached to most pro-capitalist baby boomers. But communism and socialism are two different monsters, and I personally feel that pro-capitalist and anti-soviet propagandist feared one day US capitalism would fall prey to socialism.
As I see it, the current crisis of the US financial system and global slowdown was a direct result of “pure capitalism.” The idea of trusting private business and banks to run the free market devoid of government regulators is a tedious idea. Entrusting the Federal Reserve to clean up private fraudulent behavior didn’t work well in 2008, specially bailing out banks with taxpayer money thanks to congressional approval.
The crash of 1929, was another result of ‘pure capitalism’, fraudulent behavior from Wall Street caused the Great Depression slowing economic trade worldwide helping stir ww2. Former US president Franklyn Roosevelt adopted fiscal policy which gave rise to the great 50’s. Roosevelt’s adoption of Keynesian regulations were considered an essential key to revive the US economy , but after the Glass Steagall Act was repealed under Clintons Administration with lobbying, its seems to me that anything adjunct to regulation is now labeled socialism.
Is the United States really becoming what some believe to be a socialist country, or is this anti-socialist propaganda? Democrats and republicans might differ with social spending, but do both parties support a free market without regulations?
Do Americans really understand socialism?
Socialism and capitalism reside under the wing of democracy. Which out the two systems works best for you, and why?
What has caused more financial turmoil in the past century, corrupt forms of socialism or unrestrained capitalism?
Why do free market economist fear socialism?
Do you agree free market economist confuse the term ‘regulation with socialism’? Is regulation and socialism the same thing?
What countries show great forms of capitalism and great forms of socialism? Which out the countries you selected; seem more socially stable, the capitalist run economies or the socialist run economies?
Optional: What is your view?
(He is an award winning and published political artist specializing in figurative, narrative and caricatured interpretations of current events)
“Labels, labels, and that is all we have in this discussion. The United States has never had, nor likely ever will have, a “free market economy.” There is nothing free from conspiracy here. There is nothing free from regulation, of any alleged economic system. The past century’s economic labels are so outdated and mostly irrelevant to our world now that it is best to refrain from using them, because everyone except economic purist geeks, and or academics that are either Socialists or Capitalists, but both capture their living by perpetuating these labels, are the only ones that understand them. It is time to accept that we all, the entire world, live in the “Hybrid-Economy Age.” Every piece of the interdependent military-economical-industrial-energy-Wall street-to no street-to Union Street” pieces have a cost, a price, a vested interest, a profit margin, cost-benefit, and every academic label that has tried to put the monster known as our economy into some nice neat box is wrong, and mostly, a product of slick marketing propaganda. What America has, is a “marketing-driven economy.”
Whatever can generate market share and wealth, eventually earns a seat at the table of respectability at our economic feast. The proof is easy to provide, for example, same-sex marriage, legalized marijuana, prisons for profit, gambling. casinos, Mormonism, the Reverend Moon and Moonies, Waco, Whaco, Caityn Jenner, and the list goes forever.
I am not condemning these issues, but use them to identify that all depend on cronyism, corruption, conspiracies, special interests, premeditation with lawyers and accountants to maximize tax-evasion to maximize profit. These are identical qualities of every man-made system of economics. All spin their mission, output, input, and purpose to find an economic advantage to power by making more clever dollars than the rest.
There will always be “thumbs on the scale” in any system, and regulations about the scales and the thumbs, whether we call it Capitalism or Socialism, and neither can claim a higher morality or a greater consequence. It matters more in the morphing of how such a system is implemented, than in what label it takes. No real morality exists, except to “use the system” to see how far boundaries can stretch before there is a reaction and push-back legal entanglement from a perceived competing interest. All are part of, and equally not part of Capitalism, Socialism, or whatever. Payoffs, pay-ins, and the whole of the United States is about producing more money.
Forget every pontificating pompous sivler-tongued pitchman, they are all the same. We are all the same. America works best when there is economic growth with minimal economic disenfranchisement. When harsh times dominate, our social contract gets shaky from scary demographic segments that feel as though their center of gravity imploded. The crush of the crash of 2008 was just this seismic riptide, and Americans are still shaking and rattling. We do not do well under economic uncertainties that linger for too long. Our “give me your tired” bull becomes xenophobic, nationalistic, with folks turning to guns, religion and simplistic diatribes, and wanting to lynch someone.
Yes, it is true that Americans do not understand Socialism, but equally true, is that Americans do not understand the concept of a Capitalist ” lassez-faire ” free market economy. Government and business interests have always been in bed together. Corporate welfare is an inherent quality of the American experience. Is that Socialism or Capitalism? Government regulations to tone down corporate interests are as well an inherent quality. What is that, Socialism or Capitalism?
Who cares, the fact is that it is corrupt and dishonestly used to amass influence and power and increase wealth. The American Revolution was driven by economic self-interest. Any one who currently says that America is now a Socialist country has been listening to Fox News too much, and has an insane axe to grind over a black guy residing in the White House. President Obama has been obnoxiously loyal to Wall Street, energy focused industries, and a host of other economic competing forces. America, the beautiful, defies easy labels. We have a mixed economy. We dance around complex social issues of justice and equality, fairness and independence, move left, move right, in a continued struggle to keep most folks off balance, just enough so they will comply mostly, accept fate, conditions, and warrior on, fly the flag, spout diatribes of nationalism, but deny fundamental and systemic issues of structural racism, sexism, classism, and support military adventurism, which is by the way, a wonderful money-making product of our mixed economic system.
There is no real fear of one so-called economic system against another. Power, translated into convincing enough of the populace to “go-along” and continue to comply so money can be made, drives all. There are times when the people flex in force to a point that the governing, and the money folks, must include it in their formula, but the bottom line is just that, money, money equals power. Socialism has a modern tradition of having been more successfully vilified, as having been equated with “others” as some unAmerican devil. Politicians have used phases such as “old Europe” “too French,” etc. to drive home ideas that America must fight outside agitators. Remove the label, and folks do like the concept of Socialism.
They love the military, the police, neighborhood schools, parks, good roads, bridges, social security, and medicare. The American dream of Capitalism as superior to create the road to travel on so one can go from rags to riches is alive, momentarily fading, and this must have Sheldon Adelson drunk on Koch shopping with Sam Walton eating Buffet on Soros, freaking out by even sounding as though they want to raise the Socialist minimum wage, when for sure, they would rather have government as their partner to turn the regulatory cheek so they can milk workers from paying them over time, benefits, and housing day care nurseries in their box warehouse. And, so it goes.”
(Holds a doctorate in linguistics and MA degree in communication. She publishes in Counterpunch, Truthout, and New Cold War on Ukrainian politics, history, and culture. She is also a contributing editor to the New Cold War: Ukraine and beyond and a founder of the Civic group for democracy in Ukraine)
“We should start this discussion by determining what socialism is – a political and economic system, in which the means of production are owned collectively by people or publicly by the state, and the state plays a determining role in economy through bureaucratic centralized planning. The goal and fundamental principle of socialism is the equality and social security for all. Citizens are dependent on the state for providing this security.
Socialism as a theory appeared in the early 19th century as a reaction to the dramatic changes brought in by industrialization – sharp pauperization of population, exploitation of masses of workers and of child labour, accumulation of wealth in the hands of few. British and French social critics laid down the foundations of the theory of socialism – Robert Owen, Charles Fourier, Pierre-Joseph Proudhon, Louis Blanc, and Saint-Simon. They advocated the egalitarian distribution of wealth and reorganization of society in small communities, in which the property would belong to all members. Robert Owen, for instance, was a strong proponent of 8-hours working day, which later became a generally accepted labor standard. Saint-Simon advocated the central role of the state in production and distribution of goods and an equal opportunity for everybody to develop their talents. Such thinking was labeled “utopian”, which reveals skepticism and doubt as to the possibility of realizing such idealistic projects. And yet humankind has been dreaming about this “Utopia” since its early days – suffices to cite the Jewish, Christian, and Islamic ideas of the Garden of Eden and of Heaven/Paradise.
Like this utopia dream, socialism is based on the ideas of equality and justice for all, therefore on collectivistic and non-materialistic principles. Capitalism is based on individual right of private property and materialistic principles of profit and loss and price system. Under socialism the state seeks to satisfy to a certain degree all members of a community by not allowing the accumulation of wealth in one hands, while in capitalism satisfaction of your needs is your own business and you can accumulate as much as you can. In socialism the rights of collectivity preside over personal freedoms, while in capitalism individual freedoms prevail. Under socialism the state strives to satisfy basic needs for all members of the society, while under capitalism it is your duty as a free individual to provide for yourselves.
Capitalism ideologists have criticized socialists for their utopian vision of the human nature. In capitalist vision of the world, private property is part and parcel of human nature and a permanent feature of social life. Capitalist economy is based on this principle. If you attempt to destroy private property – you will inevitably destroy the economy, which happened in the Soviet Union. Humans are acquisitive beings. Soviet socialists believed they can transform human nature by forming a new type of a “Soviet person”, a worker, a teacher, a peasant who would value collective welfare over their own profit, a “Homo Sovieticus”, as Western Sovietologists termed it. Soviet socialists failed in their grandiose plan. Human nature is not malleable ad infinite. The idealistic approach of socialists was the ultimate cause of their defeat, as Richard Pipes, a Poland-born American historian wrote in his book Communism. A history. The whole world witnessed this spectacular failure as a fall of the Soviet Union.
I experienced this fall, as millions of my fellow citizens, from within. I was part of that community, called Soviet people. We were proud to be living in the biggest country of the world, to have a free education, a free health care system, public parks, sports, music schools. Most of us did not think of our socialist system in terms of “totalitarianism”. It came later, with the spread of Western ideology of free market and democracy. We learned then that our past was nothing to be proud of, that we have to dismantle what we built and start constructing from the scratch, according to Western plans, not ours.
Democratization in “wild capitalism” style turned out to be disastrous. Pauperization of masses, dismantlement of social security net, hundreds of thousands of labour migrants from Ukraine working in low-wage jobs in Western Europe, jobs that Western Europeans themselves despised; rapacious privatization, or rather plundering of state assets by apparatchiki and criminals, decay of science and industry. 25 years after the fall of Soviet Union Ukraine is still not able to recover– in 2013 Ukraine’s GDP was at 70% of the GDP it had in 1990.
I am not a revisionist. Soviet Union is in the past and there is no point, nor a way to bring it back. It was a rotten system, based on official lies. But it had many things which ordinary citizens enjoyed. It was actually a socialism. If it was not for the competition with the USA, it might have lived longer. It was a social experiment of an immense scale which had a profound impact on the evolution of humanity. If it was not for the Soviet Union, the welfare state in Europe would not be so developed and wide-spread.
Americans cannot know what socialism is and do not understand it, because the American ideology of free market and of individual freedoms is based on the sanctity of private property and obsession with achieving material success in life. Freedom means that you cannot force a rich to share his wealth with poor by force, as Bolsheviks did in the 1920s. The best way to do so is to impose higher taxes. The countries which score high on the level of life and prosperity are those where such a system exists – such as Norway, Denmark, Sweden. These countries are much closer to socialism now than self-proclaimed socialist countries, such as China or Vietnam.
I think that American expansionist capitalism caused more financial turmoil in the past century than any form of socialism. The USA’s pathological fear of Communists led to the US-backed junta regimes in Latin America. The USA’s export of “democracy” destroyed Libya and Iraq and is destroying Syria.
It seems pointless to me to theorize which economy is more stable – capitalist or socialist, because there are no purely socialist economies in the world left. However, those who lean to socialism basis are more stable (I have already given the example of Scandinavian countries). Moreover, one needs to include the social dimension to this analysis. These countries are small and homogenous, meaning that it is easier to reach a consensus among various groups. Canada ranks high in the prosperity index because it found a way to accommodate interests of diverse populations within its borders.
Freedom has its limits. You need to take into account interests of others if you share a common space with them. If you pursue only your own interests, as the theory of humans as rational beings suggests, you will end up waging a war against everybody. What restrains the wealthiest people to increase their wealth by financial speculations? Nothing. Only the size of their wallets. They do not keep money in bank accounts, like the majority of ordinary citizens. And their lives are not affected by the fluctuations of markets, as the lives of billions of people. They decide what a market would be.
“The invisible hand” of free market is a myth covering up the real power of financial and political world elites. There is no such thing as “free market”. Market is regulated, not by the states, but by streams of money that belong to the richest. That is why the free market ideologists are afraid of socialism. Socialism, in their view, is all about regulations, which would restrict individual wealth. It certainly is in the sense that does not allow a person to accumulate a lot without sharing with others. But in turn it provides for so many thousands of people that to me it is worth an effort to build it.
For me capitalism is essentially about profit and personal enrichment, while socialism is about equality and collective well being. How to reconcile these two different perspectives in economy? By allowing private property in small and medium enterprises, but nationalize important industries and natural resources; by securing the right of every person to have a house, an education and a free health care. In other words, a system that combines the best elements of capitalism and socialism: a private initiative and a collective well-being.”
(President of SERAPH. He has extensive training in criminal psychology, forensic psychology, sex crimes investigation, and crime scene forensics / procedures and domestic terrorism analysis.)
“1. Is the United States really becoming what some believe to be a socialist country, or is this anti-socialist propaganda?
We have an element within the government since the 1930s who have slowly influenced society with their view of a ‘Social Democracy”. The evidence for this is clearly seen in unionization and national controls on healthcare.
Democrats and republicans might differ with social spending, but do both parties support a free market without regulations? No. Democrats generally support a controlled economy.
2. Do Americans really understand socialism?
NO they do not. They can’t balance a checkbook and their understanding of economics is sad to say the least.
3. Socialism and capitalism reside under the wing of democracy. Which out the two systems works best for you, and why?
It’s not what works best for me it’s what has worked for this country for most of its existence. The empirical data proves that free markets have made the U.S. economy the largest in the world and has taken millions out of poverty.
4. What has caused more financial turmoil in the past century, corrupt forms of socialism or unrestrained capitalism?
Central planning of government services and regulations that slow economic growth [socialism] have caused financial turmoil. In fact the 2008 recession was the result of banks and financial institutions violated the basic tenants of free market capitalism.
5. Why do free market economist fear socialism?
“Behind every socialist is a dictator.” Ludwig Von Mises
6. Do you agree free market economist confuse the term ‘regulation with socialism’? Is regulation and socialism the same thing?
No they are not. But recently regulation has become part of an agenda by activist within state and federal government.”
Those who have met me or read my writings can hardly define me as anti-capitalist. I am a liberal by temperament, by instinct and by upbringing. Therefore, I consider the individual, and not the family, the state, a community, or a nation, as the core of a modern society. Consequently, for any liberal, liberty lies -or should lie- at the heart of the political system -what LIBERALISM is all about- and be the modus operandi of the economy –what free-market CAPITALISM is about. Being a liberal naturally also means being open to other people’s ideas, new or old, from left, center or right; as well as looking for pragmatic approaches rather than for ideological solutions.
“When the facts change, I change my mind,” said Keynes. This contradicts not only with traditional leftist ideologues’ views, but also with the quasi-religious assertion of free-market zealots, such as e.g. George Stigler: “When the facts contradict theory, they are wrong and theory is right.” Reality checks are required as often as the situation demands. Some of them can validate your views, others can make you revise your opinions or judgments, sometimes radically. Contrary to hard-line opponents of capitalism (except in North Korea, is there still anyone left?) and its most outspoken critics (there are growing numbers here), I have no problem to make a decent living (up to a point, as life cannot be reduced to economy) within the system and acknowledge its merits.
Still, it is important to check the flaws and see the limitations. Nothing is perfect in this brave new world. I also have to admit that being a sharp critic of capitalism as it is now would have been for more difficult for me as it was then. The system was then more entrepreneurial (or Smithian, if you want), more about the real economy and less about finance. It looked less disputable then, especially as representing the most credible, if not sole, alternative to communist and so-called “socialist” regimes (not to mention other populist-leaning models which may return to fashion in the wake of capitalism’s troubles). It was mainly viewed as a set of mechanisms and not as an ideology, except in the eyes of hard-line opponents inside and enemies outside (how many divisions these days?). As far as I am concerned, I have never considered capitalism as a religion and behaved like one of its apostles.
Liberalism is not capitalism –and vice versa
Though significantly forged by three movements -British moral philosophy and economics, French enlightenment, America’s Founding Fathers-, liberalism and the word “liberal” itself has evolved into various meanings and practices. The Oxford Dictionary gives a very good definition of liberal: “wanting or allowing a lot of political and economic freedom and supporting gradual social, political or religious change.” A very British definition indeed, which seems natural in the country where it was invented before being exported, adapted, and sometimes much distorted in other places. Ironically, France and the U.S. stand among the countries where “liberal” is frequently used as an insult, yet for opposite reasons. In the country of Alexis de Tocqueville, left-wingers use the word to indicate dislike for capitalism, liberalism, and the right in general. In Tocqueville’s country (once visited by Jefferson), there has never been a real liberal party, and a real modern progressive left has never really emerged.
You may chalk this up to the role of the state in French society, whose political pendulum swings from more or less statist right to left. In Benjamin Franklin’s country (also visited by Tocqueville), liberal can be in a conservative’s eyes a nasty word to talk about “left-wing” state interventionists, who are of course labeled “un-American.” To foreigners, the equation between a country, an economic system and, for many, a religious belief, may look weird, especially in the 21st century. Listening to most of the right-wing media, politicians, business people, (neo)conservatives, think tanks, Tea Party goers, and other evangelists, it is clear that economic freedom is more valued than political liberty and social justice. These are sometimes, if not often, regarded as a threat to the sacred market system and other (un)related values. (Public) principles seem to matter less than (private) interests. The U.S. is probably one of the only countries where a minimum tax proposed on millionaires is deemed as a “war on capital” by a Republican Party candidate. No wonder even Warren Buffett himself states that his country is leaning towards plutocracy!
There are liberals and… liberals. The progressive liberal camp to which I belong puts the same emphasis on political liberty, social justice and environmental protection as on free markets, and therefore believes in and works with “liberal means towards progressive ends,” as Giles Wilkes finely sums it up. Coupling the two words would be a tautology in many U.S. eyes (yet a few conservative or centrist liberals can be met here too), but let us forget American exceptionalism. In the Commonwealth and in most parts of the world there are different kinds of liberalisms –and capitalisms. As opposed to America’s mainstream, European liberalism has always been as much about political and social democracy as about free markets. “Free as we wish unless we harm others,” said John Stuart Mill. At the end of 19th and the beginning of the 20th century liberal parties were including a significant number of progressive leaders and members whose ideals of social justice made way for new left parties and much needed social reforms.
David Lloyd George was among their most prominent figures and may be regarded as a founder of a social-liberal welfare system as opposed to Bismarck-style paternalistic welfare. These last decades (and sometimes further back in time), bar a few rare exceptions, “liberal” parties in Europe have increasingly drifted towards various forms of economic conservatism, in spite of dashes of Thatcherism here and there. Supporting the economic interests (of the middle and upper classes) now prevails over defending liberal principles, though never to the same extent as in America where it is blatant. In some countries, e.g. in Eastern and Northern Europe, ultra-right or populist parties even label as liberal content that has little to do with Locke, Montesquieu or Jefferson.
Although they often work together, capitalism is not per se synonymous with liberal democracy. Was it not Milton Friedman himself who wrote: “History suggests that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition.” Economic and political liberalism can clash: more power of capital often results in less free markets, usually means increased injustice and inequality, and sometimes seriously harms individual liberties. History teaches us that big business thrived under Hitler’s rule (remember Dr. Porsche, the Krupp family, and… Henry Ford!).
All-to-market “neoliberalism” championed by Milton Friedman, Ronald Reagan, Margaret Thatcher and their many disciples -some of them not exactly the most democratic champions (remember a certain General Pinochet)- has brought discredit on the liberal-capitalist mix. The term “liberal” is now at least ambiguous and at worst ideological or negative. If liberal still sounds positive to some ears, neoliberal very often expresses disapproval or discontent. Because of -and thanks to- its quadruple meaning -cultural, political, social and economic- liberalism has been multifaceted since its originswhich are diverse.
Capitalism is not monolithic either; yet the recent globalization trend tends to result in a one-size-fits-all model. In Europe and Latin America, social-democratic and other progressive parties were needed to make capitalism less wild, implement bold reforms refused or delayed by economic, political and social conservatives (often including religious forces and right-wing liberals), and create new economic and social models allowing redistribution that free markets would NEVER have achieved with their “invisible” hand. Today, we see competing models of capitalism flourish, from American -or, more broadly, Anglo-Saxon- to Rhenish, from Asian to Nordic, from feudal to post-communist (both in oligarchic style), from state-led to development-driven.
Capitalism is no longer what it used to be
The system has always proved able to change, that is one of its great strengths. As Zygmunt Bauman, a very critical observer, writes, “capitalism has an in-built wondrous capacity of resurrection and regeneration.” It Somewhat ironically, it is more flexible than many of its rigid and doctrinaire defenders in the books or in the field.. With all due respect to Adam Smith, and every economist (liberal or not) owes him a lot, one of the major flaws in a work that remains essential is the metaphor of the invisible hand. This has proved to be an illusion more than once in the history of capitalism, , as illusory as the somewhat related principles of perfectly informed and rational economic agents (as defined or analyzed by the French Léon Walras and the English William Jevons, among others.) As Joseph Stiglitz puts it: “the reason that the invisible hand often seems invisible is that it is often not there.” The invisible hand is very often the heavy hand of dominating firms or the hand taken by financiers in markets. Besides, one thing is certain: for all its VIRTUES -and there are still some real and a few unmatched ones- the market no longer has the answers to all the problems. Saying that capitalism is capable of changing and regulating only by itself is like asking the tobacco industry to tell people not to smoke.
The NATURE of capitalism has changed. Financial markets’ side effects far outweigh their benefits to real economies. Corpocrats rule over small entrepreneurs. Risk-betting traders make a much quicker buck than risk-taking businesspeople (except for a few rags-to-riches stories for TV shows). Bankers have switched to short trading at the same time they have lost credit (all meanings, bar the cards).. Greed fuels large parts of the system. Individual shareholders have no say. Daily share price targets have replaced medium-term strategies. Unrelated derivatives travel buck naked. Speculative bubbles burst regularly. Too many economists are just conformists. Casino finance pays off (much) more than the provision of a good service. Many policymakers are subservient to markets and their latest ratings. Those flaws come on top of other weaknesses –some of them qualifying as original sins: booms and busts, inequities and inequalities, selfishness, the cult of growth, supposed rationality, unfettered globalization, overconsumption, indebtedness, environmental damage… What were once virtues -making profit is not sinful as such- turn into vices -making money with money proves purposeless and value-destructive and can be terribly harmful for those without deep pockets.
Markets are unstable by nature. That has its charms –who needs the stability of the Middle Ages and communism, after all? That comes at a price too, named crisis and recession, and a few other “on”-ending words. The latest crises will not be the last, whatever the short- or long-term economic or business cycle school (Juglar, Schumpeter, Kuznets “swings” and Kondratiev “waves”). “Once we were satisfied that the cycle was ten years in length and since that was smashed,” said Irving Fisher… in 1946. However, even if upward cycles may occasionally last longer -some even argue that recessions last shorter than in the past- bubbles burst and crises tend to repeat more often and spread much faster than in the past. There were at least six major crises in the last fifty years compared with two in the previous half-century. Now, “thanks to” globalization, each significant crisis has repercussions almost everywhere, at least to some extent, which was not the case even in a relatively recent past. The logical question that arises from this book’s title and content is: if it suffers from “deadly” sins, will capitalism die from this crisis? Well, the system has gone through many crises and has proved extraordinarily resilient: sometimes stronger, sometimes weaker, sometimes stepping backward, sometimes moving forward. One of the great questions of our times is which forms of economic models will dominate -and are desirable- in the coming years and decades.
The latest crises are more serious because, in addition to their usual ingredients, they are the result of a conjunction of worrying trends and factors. Those are: too large, too powerful and uncontrolled financial institutions; a tyranny of short-termism; pure irrationality (often disguised as “rational markets”); irresponsible public policies (not everywhere, though); and, last but not least, unprecedented greed. “We have just witnessed a… phenomenon in the financial markets. A crime has been committed. There is a victim (the helpless retirees, taxpayers funding losses, perhaps even capitalism and free society). There were plenty of bystanders. And there was a robbery (overcompensated bankers who got bonuses for hiding risks, overpaid quantitative risk managers selling patently bogus methods)… Most poignantly, the police may have participated in the murder.” These lines were written in the middle of the first great financial crisis of the 21st century. They do not come from a bunch of leftists but from a professor of risk engineering and a derivatives consultant! The Madoff gang, the Lehman brothers, the Greenberg solo, Freddie and Fannie, Merrill marauders, Barclays’ Libor manipulators, and other champions of greed were and are no exceptions, they were and are still part of a system now extremely dependent on it. To make things worse, regulators are often “captured” by the institutions they are charged with regulating. The net result of the explosive mix of malpractice and a financial system that had run out of control(mostly, yet not only, in Anglo-Saxon economies), was the late-2000s financial turmoil. Although based on credit, it was paid in cash. Year 2008 losses on major stock markets ranged from 34% to 65%. And the costs and losses, first estimated at $1,000 billion by the IMF in April 2008 (i.e. in the early stages of the crisis), were recalculated by the same IMF at $4,100 billion one year later (with estimated total write-downs on U.S. assets only at $2,700 billion). Over a longer period, an IMF database, which reviews systemic banking crises since 1970, shows that the average fiscal cost of such crises at about 15% of GDP. A hell of a lot of money!
Capitalism’s strengths and virtues may still deserve words of praise, yet to a much lesser extent than in the past. Actually and to be fair, one could also write a lot more about the sins of the alternatives to capitalism, such as authoritarianism, communism, fascism, feudalism, nationalism, populism, state socialism, totalitarianism… These are other stories. And stating that all tried alternatives have proved worse is not sufficient to plead not guilty and rest the case. Capitalism is perfectible and reformable.”
Peter D. Rosenstein.
(He is a non-profit executive, journalist and Democratic and community activist. His background includes teaching; serving as Coordinator of Local Government for the City of New York; working in the Carter Administration; and Vice-chair of the Board of Trustees of the University of the District of Columbia)
1. Is the United States really becoming what some believe to be a socialist country, or is this anti-socialist propaganda? Democrats and republicans might differ with social spending, but do both parties support a free market without regulations?
The United States is not a socialist country however both parties agree that government should have some control on the economy thereby not having a totally free market. There is regulation on how business in the United States can operate and there is a structure through which they operate. There are requirements on things like fuel economy and emissions for cars, control over chemical use in crops, control over what banks can do. But none of these have turned the US into a socialist country. It is a form of controlled capitalism.
2. Do Americans really understand socialism?
Americans definitely don’t understand socialism or even the gradations of what are considered socialist countries. To most Americans socialism means the government collects high taxes and then controls the services people receive from healthcare to childcare to pensions.
3. Socialism and capitalism reside under the wing of democracy. Which out the two systems works best for you, and why?
I believe that a controlled capitalism works best in the United States. To me there are trade-offs and I think that an appropriate mix of capitalism and socialism works.
4. What has caused more financial turmoil in the past century, corrupt forms of socialism or unrestrained capitalism?
I think in recent history we have seen that unrestrained capitalism has caused more financial turmoil. Yet let us not forget it is not the socialist countries in which people want to invest their money. That investment still comes to the United States. Economic investment and job creation are still what we want from capitalism and in turn to build a middle class. Controlling capitalism to the point that we achieve that is what Hillary Clinton is proposing. It is regulating big banks not destroying them, it is regulating big business not destroying it.
5. Why do free market economist fear socialism?
Free market economists believe the free market is the best way to build an economy. Socialism in various forms hinders the free market.
6. Do you agree free market economist confuse the term ‘regulation with socialism’? Is regulation and socialism the same thing?
Yes – but the issue is how much regulation to have while still promoting capitalism.
7. What countries show great forms of capitalism and great forms of socialism? Which out the countries you selected; seem more socially stable, the capitalist run economies or the socialist run economies?
In today’s world that is difficult to judge in some cases. The United States, with capitalism, even with all its problems regarding race and gender issues still remains one of the most stable nations in the world. I am not expert enough to comment further.
8. Optional: What is your view?
The Democratic Party in the United States is dealing with a self-described democratic socialist, Bernie Sanders, running in their primary. On proposal he has Is free college for everyone. One of the other people running is Hillary Clinton a self-described democrat. She has often supported certain government run and partially paid for programs like national healthcare. But her college proposal is for free college for those who can’t afford it and reduced interest on student loans. She is not for taxing everyone and using that money to pay for free college for the wealthy. That is one area in which we are seeing Sanders’ socialism is being called into question. There are others. We are a nation based on capitalism so it will be important for the next President to be able to work with the banking sector (Wall Street) even if they want to regulate them. Sanders is more of a let’s bring them down and control everything they do. It will be interesting to see what kind of support he gets even within the Democratic Party for his ideas. Thus far it seems that the Party is siding with Clinton’s views.
Jose Luis Chalhoub Naffah.
(He is a political scientist with a masters in international oil trading and an independent politics consultant on politics and geopolitical risk based in Venezuela focusing on Russia AMD Middle East issues)
Nake M. Kamrany.
(Professor at USC. He is an eminent Afghan-American development economist with superior experience in economic development who is held in high esteem by the international development community, Afghan leaders, scholars, the private sector and intellectuals. He has more than 20 publications on the political economy of Afghanistan)
“The issue of capitalism and socialism as competing systems of political economy is no longer relevant. The entire nation states in the world have adopted market system including provision of social measures to satisfy the basic needs of the citizenry. It follows that the political economy in the world is now characterized by socio-capitalistic system. This movement is evident in the United States by the emergence of Donald Trump and Bernie Sanders in the Republican and Democratic parties which echoes the desire of electorates for a major departure from the old established political order and/or political dynasty. The disdain of the American public with the existing political and economic order in foreign policy and domestic conditions is indicated by their support of presidential candidates who are outside of the old political order shifting away from wars in foreign policy and social equity for domestic policy.
U.S. Must Substitute war with Peace
U.S. Foreign Policy is not promoting U.S. security Interest despite enormous damages sustained by the United States in blood and wealth. The disastrous consequences of the Vietnam War in duration, blood, wealth and defeat must not be forgotten. Domestic discord and economic stagflation should have been instructive not to get engaged in third world intrigue as we have in Afghanistan, Iraq, Syria, Libya, and a few African countries. President Obama recently admitted that the U.S. has been involved in wars with seven third world countries. The current strife with ISIS in Syria and Iraq and the Taliban in Afghanistan could get the U.S. involved in these wars in perpetuity with no specific objective, possibility of victory or an exit strategy. Why are we engaged in these intrigues that are characterized of indigenous population of warlords, drug lords, ethnic groups, sectarian discord and local fiefdoms? Do they pose a security concern for the United States? Absolutely not.
During the Vietnam War the political pundits argued that if we do not defeat the communist in Vietnam they will be on the shores of California. The Vietnamese took over the U.S. embassy in Sagan but none showed up on the shores of California. Likewise, with respect to Iraq the government argued that there were weapons of mass destruction hidden in Iraq. None were found. We pulled out of Iraq and eventually turned over the domination of Iraq to Iran. And in Afghanistan there was a regime change – the Taliban was replaced by a puppet government who could not defeat the Taliban nor create a democratic government and ripped off billions of dollars of the American taxpayer’s equity. The current involvement in Syria, Iraq , Libya and few places in Africa have gotten us involved in sectarian wars, tribal wars, and ethnic discourse in which we should not be involved but let the natives resolve their own dispute. Under President Obama watch, the U.S. has been involved in seven local wars in third world countries which have been inconclusive. It is now very obvious to the U.S. public that our involvement in third world countries have proven futile. In many ways we have lost thousands of American soldiers, caused thousands of American disabilities, killed thousands of innocent villagers, traditional natives, and have engaged in conflicts and have taken sides without having a clear objective or any defined aim. The approach has been illegal, immoral and repugnant facing a superpower. Then what has been our rationale?
Unfortunately our security policy is still occupied and dominated by our reaction to the tragedy of 9/11. We are still preparing for recurrence of 9/11/. Our policy represents a security phobia emanating from Bin Laden’s cult which was nothing but an improbable fluke and an extraordinary failure of the entire free world’s intelligence system. It is doubtful that 9/11 will ever be repeated. The only security risk could emanate from “lone wolves.” Given the free flow of people and communication internationally plus encouragement by leaders of Al Qaeda and ISIS and/or in response or retaliation to incessant U.S. drone and air attacks may cause far or in between attacks. Our military offensives could contribute to radicalization, anger and revenge by individuals who turn “lone wolves.” However, such probability could be checked –minimized or eliminated – by a shift in U.S. policy of rapprochement with these groups. As a superpower the U.S. should endeavor to guide rather than fight these third world nations toward economic development and education.
Regarding defense issue of the campaign, in the final analysis, U.S. strategic consideration in the 2016 election should focus on the Russian Republic which is an atomic power without instigating the “cold war” and China. China is becoming an economic super power and it is allocating 2.1% of its GNP for defense in contrast to 3.5% by the United States. However, China’s figures are based on fixed exchange rate not market exchange rate. . In reality China’s GDP is now higher than the U.S. and the figure 2.1% by fixed exchange rate underestimate its real expenditures on defense. Nevertheless, in the election of 2016, the U.S. defense expenditures should focus on Russia and China and rely upon its superior military technology without instigating “cold war” or “hot war” and promoting world peace and tranquility, the same strategy that was followed by President Eisenhower during 1952 – 1960.
The U.S. faces major Domestic Policy Issues
On the domestic front, the U.S. faces several major issues as priority of the 2016 election and a shift towards social equity..
The rate of U.S. incarceration is a national disgrace. For every one person that is incarcerated in western European countries we incarcerate 70 people. This is largely due to our ineffective criminal justice system as the police, the prosecutors and judges incentives are served by incarceration although a majority of those who are incarcerated are drug addicts and individuals who suffer mental health. They should be treated in clinics as they are in Europe instead of being incarcerated. Resources in many states are being re-allocated for building prisons instead of schools.
By the same token our distribution system is lopsided. The percent of poor and underprivileged now exceed those of Europeans which means that we must revise our distributional system. It is diabolic that 1.5 million families in the U.S… Live on $2 per day per person. Thus is the World Bank designation of $2/day/person in less developed countries.
Although Obamacare is a good first step but it has failed to control and reduce the cost spiral of charges imposed by hospitals, physicians, pharmaceuticals, and laboratories. We must adopt the Canadian or the French system and enroll everyone into Medicare and control the cost of Medicare to coincide to and In line with the CPI.
Another white elephant that has emerged in the U.S. Is the cost of college education? Once again as compared to the European countries where there is no tuition or very modest amount, we have our students take a heavy mortgage type loans for their education which put them into long term debt ranging from 10 to 30 year of loans. The average annual student loan in 2015 for private college education has reached $31,231 while the total student borrowing bill has reached $1.19 billion. The worst aspect of student loan is the annual interest rate that students are charged. In 2015, The average annual interest charges for student loan is the highest in the country 11.455% as compared to 8.39% for credit card, 3.36%% for mortgage loans and 2.51% for auto loans. Student college cost will defy the distributional objectives of the nation and will contribute to keeping the poor out of college. Ostensibly these figures are contrary to President Obama’s push to lower student loan costs.
It follows that the U.S. shall seek a new U.S. order to rectify the above inequities and dissonances. Specifically we should withdraw our military expansion and bases to reduce our military budget and national debt, disengage our military from the third world nations, and check the security threat that may arise from Russian and China. President Dwight Eisenhower who relied on U.S. atomic power superiority kept the U.S. out of foreign intrigue doing 8 years of his presidency. Currently the U.S. military budget is a multiple of the Russian and Chinese budget and as long as we maintain the superior military technology as we are capable to do then we should be able to cut the military budget appropriately to reduce our deficit and national debt. By the same token, we should be able to reduce our medical cost and expand converge to everyone by as much as 30% of the current expenditure. Student loans should have an upper limit of no more than $10,000 for four years of college at zero percent interest rate subsidized by the government. We should –re-allocate THE BUDGET FROM BUILDING PRISONS TO BUILDING SCHOOL AND TRANSFER ALL NON-VIOLENT PRISONERS TO SCHOOLS, CLINICS AND REHABILATION PROGRAMS.
We should revise minimum wage law to “living wage” in such a way that the living wage would support the wage earners for his living cost including room board, health, education, entertainment, adequate facilities and clothing.
All of the above indicators are currently being provided in many European countries. The United States is the richest and most powerful country in the world and it must lead the rest of the world in all of these indicators. The proposal contained herein has nothing to do of the issue of ISM – SUCH AS CAPITALISM OR SOCIALISM. It has to do with HUMANISM – the right of each individuals to receive these basic needs as a matter of right from the cradle to the grave. We must demonstrate AND ASCERTAIN the right of the individuals upon the resources of the earth and bring the distribution in line with the basic rights.”
(Novelist, filmmaker, investigative journalist, poet, playwright, and photographer, Andre has covered dozens of war zones and conflicts from Bosnia and Peru to Sri Lanka, DR Congo and Timor Leste. He is the author of a novel Nalezeny, published in Czech.)
1) Of course it is anti-socialist propaganda. The United States is a fascist imperialist power. Its foreign policy has been geared, for decades, to destroy each and every socialist country on earth. From Sukarno’s Indonesia in 1965 to Chile in 1973, to Syria, Venezuela and Ecuador now.
2) Most of them have no clue what socialism is. They only know what their regime tells them about socialism.
3) Democracy only means “rule of the people”, translated from Greek. Therefore, how could the system that serve business interests of tiny minority be considered “democratic”? Of course socialism is superior to capitalism, and of course capitalism is readily murdering its opponents all over the world.
4) Of course it is unrestrained capitalism. If socialism would be allowed to flourish, there would be no “corruption”. Corruption, as John Perkins brilliantly explained in his “economic hit man” comes mainly with attempts to divert local governments from their main duty: to serve their own people and not the Western Empire. Capitalist regimes in Europe and US are actually corrupting socialist countries, for many decades.
5) Because if real socialist democracy would be allowed to flourish, there would be no “financial markets”. Who needs them? Only few neo-cons and pro-business fundamentalists.
6) Regulations are needed so the majority of people is protected against corporate extremists. Naturally, socialism and regulations go hand in hand. However, corporate media in the West often portrays “regulations” as something negative. Of course, it would not go against the interests of its owners.
7) Sociallist countries are by definition much more socially stable. Great form of capitalism? That would be a contradiction in terms. The problem is that until now, the West has horrible tendency to destabilise, even destroy, each and every socialist country on earth. Once a country begins to feed, house, educate and heal its citizens (instead of sacrificing them for the benefits of the West), its leaders get assassinated, sanctions are impost, and coups performed. The West uses terror tactics against socialism.
8) Socialist countries should unite against capitalist neo-colonialism. It is already happening as we speak. Capitalism is something that should have died more than a century ago. It is direct opposite to “humanism”. Humanism and socialism are one.
(Retired Indiana University university professor. Academic Writing. International Political Economy – Fiction)
“Contemporary civilization and its progress under capitalism are measured largely, though not exclusively, by stock market indicators and the wealth index of corporations and millionaires that mainstream media celebrates. All other issues are only significant if they enhance or diminish corporate wealth. This includes the political, social, environmental issues that may either entail greater profit opportunities or instability and lower profits. “Accordingly, the extent to which corporate democracy represents general, social interests or narrow, profit-oriented interests is largely a function of political contestation and state policy.” Carl Gershenson, “Protecting Markets from Society: Non-Pecuniary Claims in American Corporate Democracy” Politics and Society (March, 2015, vol. 43, no. 1)
This “corporate measure” of the social contract in modern society is to the exclusion of the misery index in what Frantz Fanon once called “The Wretched of the Earth”, referring to the manner that imperialism determines social class in Africa and the masses’ reaction to create a more socially just society. The conditions Fanon described pertaining to Algerian struggle against French colonialism pertains today to conditions that capitalism universally creates and perpetuates as it always has since its nascent phase in the 15th century when European colonialism and the transatlantic slave trade began. An African-American youth shot by the police in the ghetto in 2015 is just as much a victim of the same class formation that capitalism creates as an Algerian youth fighting against French colonial rule in the 1950s.
The corporate measure of the social contract and a successful civilization based on linear econometric progress of corporations is a sharp deviation from the humanist values of the Renaissance, the Scientific Revolution, and Enlightenment in Western Civilization rooted in creativity, intellectual achievements in everything from the arts to natural sciences, and to the welfare of humanity as a whole. The corporate measure of the social contract is an assertion of elitism and inequality and a rejection of humanist values and social justice.
Apologist of capitalism would of course give credit to capitalism as a system for unlocking human creative potential of such scientific and technological innovation. Since the transition in the 15th century from the Feudal/Manorial social order/mode of production to capitalism there have been phenomenal technological and scientific inventions intended to improve everything from human health and comfort to unlocking the secrets of the universe. The same apologists, however, do not fault capitalism for structural poverty that persists on a world scale; for the countless wars in the name of capturing markets and increasing profits that have resulted in the deaths of hundreds of millions in the last five centuries; for societal violence emanating from socioeconomic inequality; and for human rights abuses and absence of social justice that are invariably at the core of capitalism.
In the post-Communist era, the specter haunting the entire world is neo-liberalism, driving many people to seek alternatives in some form of Socialism. The fall of Communist regimes had their experiments with one-party states and “command economies” in the name of the proletariat in the 20th century. Those regimes failed for a variety of reasons including constant assault from capitalist countries at every level from the costly arms race to counterinsurgency operations and ideological propaganda campaigns. In the early 21st century many people are wondering if the “End of History” celebrating the US Cold War victory over Communism (Francis Fukuyama, The End of History and the Last Man) that marked capitalism’s triumph means anything more than hegemony of the wealthy over the rest of the world’s population in every domain from economy and politics to the arts for profit.
Capitalism under neoliberal policies is indeed without rivals throughout the planet in the post-Communist era where the US remains the world’s sole superpower despite China’s economic challenge. Communism as it operated during the Maoist era no longer exists even in contemporary China that practices capitalism and abides by the same rules of the international market economy and its institutions such as the IMF, World Bank and World Trade Organization. The “end of history” is indeed the end of Communist regimes but merely another step in society’s evolution and the continued struggle between the hegemonic capitalist class and the masses seeking social justice.
Do people around the world look to established Socialist parties for salvation (about 60 countries have socialist parties), or must citizens continue looking and creating grassroots socialist movements to find the best possible “social contract”? Socialist Party politicians know that there is absolutely no resemblance between a European Socialist Party today and the First International (International Workingmen’s Association, 1864-1876), or even the Second International (1889-1916) that dissolved because some European Socialists were more nationalistic than they were Marxist internationalists. Throughout Europe, political parties calling themselves Socialist are no different in representing finance capital to the detriment of the rest of society than conservative parties pursuing neoliberal policies.
Using the argument that Socialist parties are committed to social justice, defending trade unions, defending the poor, defending minorities, defending collective bargaining, and guarding against the abuses of capitalism, Socialist parties were able to keep their popular base in the post-WWII era, while securing the support of capitalists who understood the significance of social harmony under a social contract where labor and the lower middle class enjoyed some benefits and believed the system served them as well as the capitalists. However, the triumph of the US over the Communist bloc emboldened the neoliberals eager to crush even the remnants of Keynesian policies left over from the early Cold War. During the Reagan and Thatcher decade, the US and UK followed by other governments began to dismantle the social welfare state in order to strengthen defense and the corporate welfare state.
Socialist parties changed their agendas and went along with neoliberals by the 1990s. No matter the Socialist rhetoric while they are in the opposition or even when they are in government their policies are hardly any different than those of the conservatives representing a tiny minority of the population. The only resistance, a rather modest one at that, to neo-liberalism does not come from Socialist parties or Socialist governments whether in France, Spain, Portugal or Greece, but from nationalist regimes such as Russia, Iran, Venezuela, and a few others, and this largely for geopolitical considerations as well as domestic sociopolitical dynamics.
Socioeconomic equality, social justice and the welfare of the entire society are the themes in the debate between Socialism and capitalism. Socialist theory contends that capitalism creates and perpetuates socioeconomic inequality, social injustice and elitism against society’s collective interests. Advocates of capitalism insist equality of opportunity for the individual is of paramount importance in the social contract that guarantees safety and security from domestic and foreign enemies. Socialist theory advocates a strong central government to safeguard social justice and the interests of all people in society, while capitalism advocates a weak central government and a hegemonic capitalist class whose interests the state safeguards by maintaining inequality through fiscal and labor policy among other mechanisms. Just as Socialism entails a social order based on a value system and a code of ethics centered on human welfare, similarly, capitalism is rooted in a social order based on a value system of amassing private profit in an unfettered marketplace where the very few benefit to the detriment of the many.
From schools and churches to sports and entertainment, from market relationships to human relationships, all institutions operating under capitalism embrace its rules in order to survive. Unless it adopts the corporate model of governance and orientation that includes links with the business world, the university seeking large endowments from wealthy people and corporations, it is not likely to survive in a competitive field. It is simply not practical to have an enclave of a prototype antithetical to capitalism in just about any domain in society because the superstructure operating under capitalist rules, values, and code of ethics would ultimately crush or make irrelevant the antithetical prototype. This is something many have discovered in the last two centuries from Robert Owen and his followers that popularized the term Socialism in the 1820s to the present.
Socialists of varying types in the 19th century amid industrialization of society understood that capitalism is a new system of servitude that dehumanizes workers for the sake of amassing wealth for capitalists. There is a gap between the promise of capitalism to provide riches for all while society becomes more industrialized, scientifically, and technologically advanced, and the reality of a system creating wealth for a small percentage of people. The majority of the world’s population is left behind to dream of becoming wealthy while subsisting in daily misery, while a middle class as a buffer between the masses and capitalists helps to maintain the social order. What happens however when the middle class begins to decline as it has in the US and across much of Western Europe in the last three decades? According to the Economic Policy Institute, the bottom 90% of Americans experienced 5% income growth between 1979 and 2007, while the top 1% of Americans enjoyed 390%, illustrating how capitalism slowly destroys itself by undermining the buffer middle class.
Werner Sombart, Krieg und Kapitalismus, (1913), and Joseph Schumpeter, Capitalism, Socialism and Democracy (1942) analyzed the dynamics of capitalism’s contradictions, using the Marxian concept of “creative destruction” to explain the evolutionary process of the mode of production and contradictions inherent in the system. While they were both reacting to 19th century Industrial capitalism and the destruction of wars of imperialism that the capitalist system created ultimately leading to WWI, elements of the theoretical foundations of their works are applicable in our time.
In the early 21st century when capitalism prevails triumphantly under a neoliberal ideological and policy orientation, the fundamental question is what does the majority of the population want from a social contract? Because people are born into a capitalist system with the state as its guardian and promoter throughout the world, it is extremely difficult to bring the system down and replace it with any degree of ease as some believe. Those who enjoy power, wealth and privilege throughout the history of all civilizations rarely surrender what they enjoy for the sake of the good of society as some believe simply because it is the right thing to do for the welfare of society.
Human Nature and Capitalism
Is capitalism consistent with human nature and does it reflect it as apologists argue, or do institutions under capitalism simply reinforce human nature’s atomistic and irrational aspects as detractors insist? In short, is capitalism in existence for five centuries because it closely reflects human aspirations, greed, irrational proclivities, the desire to amass material possessions and to live in a hierarchical society where there are few rich people and many are poor? Is humanity indeed carrying the seeds of evil from Adam and Eve as some in Western Christian tradition believe, or do human beings create structures that mold human behavior?
During the ancient times, whether 5th century B.C. Athens or 1st century A.D. Rome, prevailing ideas and culture that we know about today are those of the elites and have nothing to do with peasants, workers, or slaves. Culture makers were the elites, not the peasants, workers and slaves who carried out manual labor so that the leisure classes could devote time for their endeavors. The same holds true of the Middle Ages when the temporal and spiritual Lords prevailed in society in every respect controlling all institutions from church to the military and economy and determining everything from values to how people married and often whom they married. In short, the elites pass on to the rest of society values and code of ethics as a means of maintaining a given social order.
It is not much different with capitalism; in fact, it is much clearer under the capitalist system because the evidence is ubiquitous in all segments of society’s dominant culture. People have ingrained in their minds that institutions and the existing social order is “natural”. Just as the serfs in the Middle Ages believed God meant for them to be in servitude because this is what priest and Lord reinforced, similarly Plato argued that some human beings are meant to be slaves, dismissing the idea that slavery is a manmade institution resulting from private property and war. Under capitalism, the idea has been inculcated into the minds of the masses that if they are poor it is not because there is an economic system based on socioeconomic inequality and social injustice but it is simply their fault for any number of reasons, all of them having to do with personality traits and individual responsibility.
Going beyond the arguments of Thomas Hobbes, The Leviathan and John Locke, Two Treatises of Government about whether human beings are inherently evil and prone to disharmony in the state of nature (Hobbes), or inherently good and prone to rational behavior, there is the larger issue of how the dominant culture molds the minds and behavior of people in general and how the institutional structure rewards conformity and punishes dissidence. In other words, people merely wishing to survive will conform. Palmiro Togliatti pointed out (Lectures on Fascism) that a worker will accept Fascist Party membership, brushing aside ideology that may be rooted in humanist values and code of ethics.
This is a theoretical domain to which Antonio Gramsci (Os Intelectuais e a Organização da Cultura) also made significant contributions, analyzing how the dominant culture helps to perpetuate the social order. The dominant culture of our time shaped by five centuries of capitalism has the distinct advantage just as the Feudal/Manorial Christian culture of the Middle Ages prevailed to keep the vast majority believing it was God’s will for them to be oppressed and subsist in misery finding relief only in the afterlife. Despite systemic obstacles to change in society, capitalism exists in fixed time of civilizations in different parts of the world.
Like previous systems it has developed contradictions and it will begin to decline and ultimately give way to a new order. The enemy of capitalism and the culprit of its downfall is the system itself, not Communists, Socialists, jihadists, nationalists, ultra-left guerrillas, or any external force attacking and undermining it. However, this is hardly visible not only to capitalists but to workers as well who may be fatalistic, nihilistic, apathetic, or have turned to inward spiritual endeavors as a substitute for what is lacking in the social contract.
Just as the French serf in the 10th century once believed God meant for the social order to exist as it did and there was no alternative to it. Similarly, the insurance office manager in New York City and the farm worker in southern France may be convinced by the media that capitalism is above history and will exist until the sun becomes extinct. This is what the dominant culture has ingrained into the minds of the masses so this is what they hold to be dogmatic truth in the early 21st century. This is not to say that there are not those in our time, just as there were in the Middle Ages that opposed tyranny and the absence of social justice. The dominant culture silences or minimizes the impact of dissident voices about the need for social justice and an alternative social order. Not just the Holy Inquisition, but the Lords and Bishops dealt effectively with heretics of the Medieval Era, just as the modern state under capitalism has always dealt effectively with dissidents.
The masses are much more willing than many among the elites realize to bring about change in society that would end oppression, discrimination and inequality. Although academic studies show that it takes many years, in some cases decades as in China from the First Opium War (1839-1842) to the warlords (1916-1928) to Mao’s rebel movement (Jiangxi Soviet Republic of China, 1929–1934), popular uprisings ultimately do take place as history has demonstrated. In defying elites and the dominant culture, invariably they will follow an authority figure (s) challenging the status quo, as did theologian Thomas Müntzer (1489 –1525) who took a leading role in the German Peasants’ War. The same holds true from the French Revolution to the Cuban Revolution when the masses proved more willing to support social change than the elites assumed or wanted to believe. Social change is very slow while social discontinuity as Western Europe experienced from the 14th to the 16th century comes so slowly that it is hardly noticeable when a new social order and mode of production evolves.
Historical Synoptic Perspective of Capitalism vs. Socialism
Why should people vote for Socialist parties after they have proved again and again since the 1980s that they are as neoliberal as the conservative parties rooted in the Reagan-Thatcher ideology? By what right do people vote for Communist candidates after the fall of Communist regimes in the late1980s-early 1990s, and the Chinese Communist Party promoting millionaires and billionaires as the new saviors of society? How dare leftists cling to a discredited ideology associated with disruption, if not destruction of the bourgeois social order in Russia, Eastern Europe, parts of Asia, and Cuba in the 20th century?
The answer for those advocating some version of Marxism rests in the reality that the various political regimes under which capitalism has operated in the past 500 years have always left people aspiring for social justice and the goal of serving the welfare of all people instead of the privileged few, a view that the French bourgeois intellectuals promoted in the 18th century in their struggle against the privileged nobility and upper clergy. The quest for equality and social justice that the social contract must embody is as true and timeless today as when Thomas More wrote Utopia during the transition from the Feudal/Manorial social order/institutional structure to capitalism. Certainly the question of capitalism vs. socialism manifested itself in the English Peasants’ Revolt of 1381, German Peasants’ War in the 1520s, both long before the bourgeois French Revolution, manifested aspects of Socialism as an alternative.
From the French Revolution of 1789 to the environmental movement of the 21st century, people who believed in some form of Socialism have contributed to worker and child safety, slavery abolition, eight-hour work day, social security, rights of women and minorities, and much more. Above all, socialists of varying types have always struggled to keep bourgeois political parties a bit less hostile to labor, women, and minorities, fighting against tyrannical regimes that used brutal force to repress dissidents demanding human rights, and social justice as was the case with the European Revolutions of 1848 and the nascent American labor movement in the 1880s and 1890s. Socialists envisioning a society rooted in humanist values and not capital accumulation for the tiny minority endeavored to tame the capitalist system from within with reforms and from the outside with protests so that it does not leave as many children and their parents destitute in soup kitchens and in back alleys sleeping in cardboard boxes, especially during hard times of deep recessions.
Despite the fact that wars of imperialism from 1870 to 1914 led to the First World War and Second World War, which was in many respects a continuation of the first; despite the fact that capitalism is predicated on inequality and the state in many countries throughout the world, from 19th century Russia and Mexico to 20th century US has led campaigns against workers through violent means; despite that capitalism keeps promising “the promise land” only to deliver wretchedness for the masses whether in sub-Sahara Africa or rural Mississippi, its apologists continue to eulogize this as the best and only system fit for a decent society. The marketing and selling of capitalism under the neo-liberal panacea was helped enormously by the downfall of Communism, by the US campaign on terrorism that fed the defense industry, and by the idea that there is no alternative to neo-liberalism anywhere in the world, considering that China as part of the global marketplace goes along with international market rules, with the World Bank and the IMF.
Capitalism has prove resilient because it has demonstrated that it can operate under varieties of regimes, from Absolutism in early modern Europe, to parliamentary bourgeois democracy in the 19th century, to Fascism, Nazism, and varieties of authoritarian governments in the 20th century. What all of these regimes have in common is that the role of the state is not to fulfill the social contract as conceived by liberal and democratically-minded political philosophers of the Enlightenment era, but to serve, protect, and strength capitalism and its institutions in their evolving state. Since the late 19th century, finance capital with the backing of the state as an instrument of absorbing capital through the fiscal structure has as its first priority to maintain the hegemony of the markets by allowing them to operate freely during the expansionary cycle of the economy, and providing capital to sustain them amid contracting cycles.
Under such role of the state, socialism is an arch-enemy that capitalism is constantly at war against. In practical terms this means that the enemy of capitalists are the masses aspiring to a social contract that includes them – again, a bourgeois concept that the Enlightenment introduced (Emmanuel Joseph Sieyes, What is the Third Estate? 1789), but one that opened the Pandora’s box for mass politics after the European Revolutions of 1848. Does the social contract include only the privileged elites the state represents – before 1789 in France the secular and spiritual nobility, now the capitalists – and are they the nation and embodiment of the national interest, or are all people included in the social contract?
- Is the United States really becoming a socialist country, or is this propaganda? Democrats and Republicans might differ with social spending, but do both parties support a free market without regulations?
There is absolutely no evidence that Democrats and Republicans differ on their adamant opposition to Socialism not only as regime, but even as a third political party with any legitimacy, or a social movement that has popular support. Differences in the two parties are limited to the degree that there must be regulatory mechanisms the state must impose in order to rationalize the capitalist system as far as Democrats are concerned while protecting the weaker classes and maintaining a middle class. As far as Republicans are concerned the less government the better in every domain except defense, domestic security, intelligence operations, and criminal justice system. There are Libertarian Republicans who would have no problem simply handing over government agencies, and to a degree this is a reality with outsourcing government tasks, to the private sector although this means a much higher cost to the taxpayer and much less efficient public service.
The ideological convergence of neoliberals with right wing elements that include the Christian fundamentalists and those supporting the militarist Jewish lobby is a reflection of a strategy to co-opt as much popular backing as possible to forge a popular base from which to oppose any inklings of Socialism. For a functioning representative democracy to continue serving capitalism, while projecting the image of democracy, a popular political base that includes segments from the Christian right to the petit bourgeois professionals is essential. At the same time, there is complete convergence of the elite political class and elite socioeconomic class – people in both coming from the same bourgeois class and representing the same interests.
Even the self-proclaimed progressive politicians from the FDR Democratic wing in the 1940s until Bernie Sanders in our time represent the same capitalist interests and their continued hegemony. However, they differ on cultural/lifestyle issues and the degree to which the fiscal system must be structured to sustain a sound safety net for the poor while maintaining middle class incomes. Because of the Cold War that was effectively used by both Republicans and Democrats to forge popular consensus and maintain the status quo against any movement advocating social justice and equality, and because of the “war on terror” campaign since the end of the Cold War, the American political pendulum has been swinging to the right.
Blatant racism, xenophobia, sexism, ethnocentrism, and anti-labor sentiment once camouflaged behind political correctness rhetoric are now part of the Republican public dialogue. This is not an accident or simply “politics as entertainment” as many inthe “liberal media” like to dismiss it instead of analyzing the issues in depth. On the contrary, the mainstream media, including the so-called “impartial” New York Times, Washington Post, Los Angeles Times, PBS and NPR, to mention only a few, all with a long history of helping to forge popular consensus in support of capitalism and support for militarist foreign policies in the name of liberal democracy, have helped to bring the public toward a more rightist orientation. While the media as integral part of the capitalist system can only eulogize it so it can survive, it actually presents itself to the public as “objective”, as though its coverage and news analysis represents all people and not exclusively the socioeconomic and political elites.
It is not so much the fanatic rightwing ideologues that make no secret that they approve of the Confederate flag in public buildings, but the “liberal” media presenting itself as the “progressive voice of the people” that has really been responsible for guiding the public toward an increasingly rightist orientation in domestic and foreign policy. The journalistic and moral bankruptcy of media outlets can be seen as much when they never raise social justice as a core campaign issue by questioning presidential candidates on it, any more than they question the bombing of children and women killed en masse by drone warfare across the Middle East and Africa. While many may not see a correlation between foreign policy and domestic, the reality is that the former is a reflection of the latter and neoliberal policies drive both. The US as a status quo imperial power aspiring to maintain Pax Americana status does not want structural change at home any more than it does abroad where it wishes to preserve its role as the world’s policeman.
There are many well-paid “opinion makers” that insist the US is “Socialist” because Franklin Roosevelt established a social safety net during the New Deal that many people then and today regard as a Socialist. The Democrat candidate for president in 1972 Sen. George McGovern among other Democrats including presidential candidate Bernie Sanders are also “Socialist”, although both of these individuals were well within their party’s mainstream as their voting records indicate when it came to supporting capitalism and its institutions. The US has moved so far to the right in the last four decades that it is slowly slipping toward a quasi-police state largely to push through very unpopular neoliberal policies and military solutions to international political conflicts that any voice opposing militarism and neo-liberalism is baptized “Socialism”.
Anti-Socialism rhetoric has persisted from the Gilded Age and the famous labor strike by the American Railway Union against the Pullman Palace Car Company in 1894 until the 1980s when Reagan adopted a series of anti-labor and anti-union policies the political and business establishment has fought to crush any traces labor rights that compromise capital accumulation. While the labor movement had a number of labor leaders, including Socialist Eugene Debs in the 1890s, today America has very weak trade unions and thoroughly co-opted by the Democrat Party serving big capital and adamantly opposed to any aspect of Socialism Debs advocated more than a century ago. Just in the era of Debs the entire political and justice system, including the Supreme Court always side with big business against labor.
- Do Americans really understand socialism?
The vast majority of the American people have not studied in depth the theory and history of capitalism and socialism, nor do they really need to do so in order to understand that the current social contract does not represent them no matter what the Constitution promises about equality. The prevailing view in society is that capitalism is “natural” to human nature while Socialism is antithetical and destructive to society. This view comes not just from the vast majority of the teachers from elementary school all the way to graduate school, but from the community, church, politicians and above all the media.
Let us assume that the American people understood in varying degrees both capitalism and socialism. Does this mean that the majority would opt against capitalism? There are very well educated people, including progressive economists and social scientists in general that realize the destructive nature of capitalism and its anti-human pro-capital orientation. Yet, they cannot wait to line up behind any institution that sings the praises of established policy in any domain and represents the promotion of the existing institutional structure because only in this manner is the professional social scientist, journalist, etc. able to achieve the dream of a successful career. No matter how rational, how brilliant, how sound and humane the ideas are of an individual, they are worthless if not dangerous unless they promote or at least do not hinder the status quo. In short, capitalist institutions promote opportunism and co-optation of everyone from the politician to the musician who must commercialize her art to survive.
Raising class consciousness is paramount for political action, but this too comes from the realities of daily life just as it did for the millions who followed 20th century revolutionaries rather than reading the works of any socialist theoretician. The oppressed Chinese peasant did not need to have a copy of the Communist Manifesto next to her to know exploitation any more than a Maquiladora factory worker today in Mexico, or the American farm worker in Alabama. Working three part time jobs just to feed the family while the owners of the companies are making millions constitutes sufficient proof that the system is stacked against labor and in favor of capital. An ideological framework helps to place everything into a coherent perspective in order to mobilize popular support for a grassroots movement. This was the position of the Enlightenment thinkers before the French Revolution and it was just as true in 20th century revolutions. Marginalizing, discrediting, ridiculing, or silencing dissenting voices that demand social justice and stigmatizing them as “Socialists” because they pose a threat to the capitalist status quo allows the mass media to exert influence over public opinion in favor of capital and against labor.
The same strategy the media and politicians adopt to impose conformity on domestic issues also holds true when it comes to foreign affairs. For example, the media and mainstream political and academic establishment present the pacifist dissenter advocating a political solution to US-engendered instability in the Middle East as irrational, unrealistic, unpatriotic and dangerous to national security. Meanwhile, those advocating unilateral or multilateral military intervention are pragmatic voices of reason simply because defense companies make money when government adopts military solutions rather than diplomacy. The reward for the militarist is a high-paying consulting job, chair at one of the various think tanks funded by corporate money, advertisements in the newspaper or TV supporting military solutions, etc. People, especially young college graduates, see who is rewarded and who is left behind in society. Naturally, they follow the pursuit of self interest over what the media describes as idealism that will never make the American Dream a reality. After all, American millionaire dreams are not made by doing or saying, or writing what is in the best interests of all people in society, but only what will retain the privileges of capitalists.
– Socialism and capitalism reside under the wing of democracy. Which out the two systems works best and why?
Democracy is a word the ancient Greeks invented to refer to popular sovereignty. However, when the Athenians implemented it into practice (Cleisthenes father of Athenian democracy, 508 B.C.), popular sovereignty was limited to adult males only, to the exclusion of women, foreigners and slaves. When it came to decision-makers, Athenian “radical democracy” (direct vote and participation rather electing representatives) entailed that the individual had to be somewhat well off to have an education so he could actually rise to speak in the assembly to influence the opinion of the rest. In reality, democracy was limited to the properties classes and it was always a struggle between the landowners and the merchants and shipping interests.
In 1689, England took a major step toward representative government with a strong Parliament and weak executive, but the legislative branch was the domain of the landowners, merchants, bankers and shipping interests, to the exclusion of the vast majority. While the American Revolution had a Constitution guaranteeing freedoms and liberties for all, it excluded Native Americans, women, and of course slaves, while the poor farmers and workers were hardly in position to participate and have their voice heard. The French Revolution was the first attempt in Western civilization to introduce popular sovereignty, but it quickly collapsed.
The age of mass politics of the 19th and 20th century in the Western World entailed extending voting rights to people previously marginalized, but the reigns of political power remained with the propertied classes. In short, empirical evidence throughout history does not indicate that democracy was ever a system of government that truly meant popular sovereignty to be all-inclusive and to guarantee social justice. On the contrary, history shows that democracy has been a form of government intended to serve capitalist interests, although there are immense variations between the Norwegian model that takes the working class into account and the American model that is strictly a system limited to the very wealthy with only lifestyle/cultural freedoms extended to the rest of the population.
Socialism is a very broad concept because there varieties of Socialist theories from Christian Socialism rooted in Western tradition that dates back to the Black Death, to Scientific Socialism that Marx and Engels introduced in the Communist Manifesto, coinciding with the Revolutions of 1848. In the age of mass politics, aspects of Socialism have become part of the bourgeois mainstream because the capitalist system could not survive otherwise as John Maynard Keynes realized during the Great Depression. The social fabric could not possibly hold together in the absence of the state intervening much more heavily than it ever had in the economy to absorb surplus capital in private hands, combined with deficit financing and use such resources to stimulate the capitalist economy.
This policy mix that some call “Socialist” emerged from the realization that capitalism left to its own devices would collapse without the state to buttress it. If the state withdraws its support, whether through central bank interest policy making liquidity available for businesses to borrow cheap capital, subsidies of all sorts from export to building infrastructure or facilities, as well as direct bailouts amid recessionary times, then the capitalist system would decline and ultimately fall. The only pillar maintaining it is the state that has been an instrument of redistributing income from the bottom of the socioeconomic pyramid up toward the capitalists.
The question is how long can the state remain the pillar of capitalism before collapsing? It could be argued that this could continue another two or three centuries. However, the mounting public debt not just of the US at more than 100% of GDP or of Japan at more than 200% debt to GDP ratio, but also other countries around the world will at some point entail a global crisis of such magnitude that the system will cave in. The combination of public and private debt will reach unsustainable levels to the degree that monetary inflation will reach levels not so different than what people witnessed in the Western Roman Empire during the “Third Century Crisis” that represents the start of a transition toward the Feudal/Manorial social order.
Edward Gibbon’s Decline and Fall of the Roman Empire correctly asked the question how did the Roman Empire with the combination of financial, economic, political and military collapse actually survive as long as it did. Nevertheless, the Fall of Rome in the long 5th century did mark social discontinuity. I am convinced that similar patterns with some variations are applicable in the 21st century. The capitalist system will reach a point when it will be unable to operate under a pluralistic bourgeois model that accounts for a thriving middle class and it will only be able to sustain itself under a form of authoritarianism. This is already a reality in a number of countries including the US in 2015 where downward socioeconomic mobility is accompanied by an increasingly corporatist state relying on the military and police-state methods to preserve the dream of an unsustainable and waning Pax Americana.
- What has caused more financial turmoil in the past century, corrupt forms of socialism or unrestrained capitalism?
Corruption among political parties with the label “Socialist” in France, Spain, Portugal, and Greece, among other countries including the most egregious cases in developing nations, has been an undeniable reality. Corruption in the former Soviet Republics, especially Romania but also in the USSR were indeed egregious to the degree that they undermined the moral fiber of the entire system and betrayed the ideology that indentifies corruption with bourgeois regimes. There is no doubt about systemic corruption in bureaucratic Socialist countries any more than there is in countries operating under Socialist parties but well within the capitalist economic system. For 25 years before he fled Romania, President Nicolae Ceausescu (1965-1989) had pillaged the country to the detriment of the vast majority of the people in the name of Communism.\
The cult of personality cultivated by 20th century Communist leaders and the corruption that accompanied it dealt a blow to the system as much in Romania as in North Korea and China. China’s pro-capitalist Communist party is one of the most corrupt in the world and it admits the problem is real and not anti-government propaganda. In Power and Prosperity, Mancur Olson argues that communist regimes are even more prone to corruption than capitalist dictatorships. However, corruption has been an endemic part of capitalism in both private and public sectors for centuries, but the system remains in place and has not collapsed like Communism. Corruption by itself was not a catalyst to the downfall of Communism any more that it played a prominent role in Socialist parties opportunistically embracing neo-liberalism so they would be able to govern by serving capitalism even better than conservatives that do not have an ideological claim to the masses’ interests.
Unrestrained capitalism, which includes endemic corruption in both public and private sectors, has actually caused far greater damage to financial turmoil from 1637 during the “Dutch tulip market bubble” until the sub-prime disaster of the first decade in this century that caused the worst global recession since the Great Depression. Despite such shocks in the market that drive unemployment high and living standards low for the majority, apologists of capitalism insist this is the best possible of all systems to serve mankind. One reason for this is that under neo-liberalism we are re-living the Gilded Age.
During the Gild Age (1870-1900), which coincided with the American industrial revolution and the Westward Movement and Reconstruction, there was indeed enormous corruption, partly owing to lobbying. Everything from the infamous Tammany Hall (corrupt machine politics), to the manner that trusts and cartels were free to do as they pleased at the expense of society. Politics became increasingly a business of catering to business of those politically connected at the expense of the rest of society from consumers to labor organizers demanding safe working conditions and fair wages so they could live above the poverty level.
The response by Republican and Democrat Progressive Era politicians was to expand government through more and larger bureaucracies and make it more merit-based so it could better serve capitalism as a whole, including balancing the interests of disparate sectors. A major goal of the Progressives was the overall growth of the capitalist economy with the state as the pillar of support while at the same time protecting the consumer to a small degree and addressing some needs of the middle class that viewed big business as predatory. Progressivism projected as a “reform” movement managed to co-opt a segment of the population in support of capitalism.
Although the expansion of the middle class accounted for the reforms under Progressivism, Gilded Age monopolies and oligopolies continued to prevail in formulating public policy, while government remained their protector. Throughout the 1920s, lobbying became more organized and intensive. Operating in a pro-business climate, lobbyists used more high-pressure tactics to secure passage of legislation by targeting committees and regulatory commissions. With capitalism collapsing in 1929, the New Deal and WWII entailed greater regulatory measures and centralization of government. The New Deal de-radicalized the masses and co-opted them into the Democrat party in support of capitalism.
However, the trend to restore the preeminent role of business in public policy returned with the Truman administration. The Cold War followed by the “war on terror” became the pretext to permit as much laissez-faire latitude as possible so that capitalism becomes stronger. Unrestrained capitalism in the last four decades is responsible for downward social mobility and the fact that even in 2015 with 5% official unemployment rate in the US income levels are below what they were in 2007 when the Lehman Brothers scandal broke and the stock market crash followed in 2008. Unrestrained capitalism is what neoliberals want and what mainstream politicians represent.
In the first week of June 2015, the media celebrated the momentous occasion of Jimmy Diamond, head of J.P. Morgan, who joined the billionaire’s club. This is of course very typical of the media to celebrate such individuals without regard to their record of corruption and destructive actions that negative impacted not just the US economy but the world. As head of J. P. Morgan, this individual has a history of corrupt practices that range from fixing rates and manipulating interest rates to hedge funds manipulation the led to the sub-prime lending crisis of 2008, to the more recent Justice Department allegations that FIFA soccer association used this bank among others Wall Street firms to launder money.
Predatory capitalists of our time – Barbarians at the gate dressed in expensive suits – will do anything from launder drug money in the billions, promote conflict to sell weapons to governments, manipulate interest rates and currency rates and securities, and payoff government officials for favors, as Republican presidential candidate Donald Trump candidly admitted. The barbarians in suits that the media and the dominant culture revere and eulogize ad nauseam fear the people, dread popular sovereignty, and detest a social contract and policies that encompasses the interests of all and not just the socioeconomic elites.
-Why do free market economists fear socialism?
Economists are a microcosm of the rest of society and reflect the dominant cultural and political influences and ideology. I do not believe that anyone should be surprised that the majority of them embrace capitalism in some form, whether under a Libertarian system, a dictatorship, a representative democracy or a social democracy with a strong social safety net. Just to survive in society and have a thriving career, economists have little choice but to embrace capitalism, otherwise, they teach and remain content with the idealism derived from their chosen profession influencing young minds.
All economists know that socialism means the means of production rest with the state on behalf of all people, or common ownership. They may not like state control or they may think it is bad for society because it promotes principles of collectivism instead of individualism, but at least they know the gist of socialism. Economists also know that socialist production is not geared to maximize profits in every sector from luxuries to weapons manufacturing, but to meet human needs. They may detest the idea because they may not believe in egalitarianism, or they may believe this is just a deceptive theory never implemented in practice as preached in writing. Economists also know that the role of the state is catalytic in so far as it determines how to meet the needs of all people collectively and not to permit production, distribution and exchange of everything from the high-end luxury market to weapons and handguns, to Hedge Funds that realize parasitic profits for a few individuals.
It is understandable that economists as apologists of capitalism fear socialism because they fear popular sovereignty. The existing system is predicated on capital accumulation and hegemony of a small percentage of the population that owns most of the wealth. As it undergoes periodic expansionary and contracting cycles more people experience downward mobility. Only state intervention through a policy mix that dilutes free market economics can reverse such a trend, something neoliberals detest and equate with Socialism. Market economists dread any policy mix that suggests the only way to save the political economy and social order is to dilute it.
In the US especially, opposition to Socialism is also a function of historical tradition rooted on the Puritan work ethic and the idea of self-reliance and individual pursuit. Government interfering to provide health and welfare for the poor is an anathema to the “Puritan work ethic” advocates who have no problem when government provides hundreds of billions to bail out banks and insurance companies, guaranteed loans, tax breaks, direct subsidies, lucrative government contracts for everything from sanitation to intelligence outsourcing, etc.
- Do free market economists confuse the term ‘regulation with socialism’? Is regulation and socialism the same thing?
Chancellor Otto von Bismarck put into policy a number of the platforms from the German Socialists because he realized this is was the best way to preserve the status quo and pursue German capitalist interests at home and abroad. Health and disability to pension plans were Socialist demands that the chancellor whom his Liberal opponents accused of promoting “state socialism” – social welfare policies that eventually all of the Western nations adopted – put into place during the 1880s when the German Empire was thriving. Of course, I must emphasize that what 19th century German Liberals and other apologists since then call state socialism is in essence state capitalism and indeed the only effective method of preserving capitalism with relative sociopolitical harmony.
The European conservative and liberal political admission that capitalism must co-opt the masses in the age of representative democracy spread to the US during the Progressive Era, although the US did not opt for as much regulatory mechanisms under Theodore Roosevelt as it did under Franklin Roosevelt. Opponents of regulations to protect workers, the environment, consumers, children, the mentally ill and the elderly argue this is socialism. The demand an end to as many government regulations on the market as possible and removal of as many government obstacles to movement of goods, services and capital as possible, allowing the market as much freedom to play by its own rules uninterrupted by the state and acting on the laws of ‘supply and demand’. On the one hand, this sounds great to the businessman because who wants red tape interfering with wealth-creation mechanisms. But is it not businesses that invite the state’s intervention in: a) subsidies, b) tax breaks, c) bailouts, d) barriers on foreign goods that are competitively priced, e) intervention against monetary policies of countries enjoying competitive advantages, f) and a host of other areas from research and development paid for by taxpayers to infrastructural development? Deregulation under neo-liberalism also means de-unionization of the labor market, canceling workers’ rights achieved in the first half of the 20th century, and imposing wages that are as close to subsistence as possible. The rationale is that the US, EU, Japan, etc. must become competitive because China is rapidly out-competing the advanced countries. How do developed countries become competitive? They bring wage levels down so that they can maintain high profits and keep market share. When they speak of ‘competitive’, they mean lowering wages and benefits and securing tax breaks and subsidies.
- What countries show the greatest aspects of capitalism and the greatest aspects of socialism? Of these countries, which ones seem more socially stable, the capitalist run economies or the socialist run economies?
Capitalism is and always has been an international system seeking constant expansion which means that all countries in the world, especially in the post-Communist era of globalization, are operating under its rules within varying degrees. If we exempt the unique regime and political economy of North Korea heavily dependent on China for its existence, there are no countries today that are Socialist. There are self-described Communist states like China, Vietnam, Cuba and Lao People’s Democratic Republic. However, these are totally integrated into the world capitalist system and practice capitalism with a strong presence of the state in the private sector. There are capitalist countries that have policy mix many describe as socialist, including Norway, Sweden, Holland, Belgium, Denmark, Finland and New Zealand.”
(He is a military analyst and vicepresident of National Academy of Security and Defence Planning. Member of American Diplomatic Mission for International Relations)
“It’s not relevant the economic doctrine of socialism or capitalism, no matter the ideology like ideocracy system. Only “real politics” and the democratic form of government becomes most relevant in this case and represents the correctly equation of international order.
Communism, national socialism, neo-liberalism, Christian democracy, libertarianism and other modern politicals currents represent ideological systems. Socialism and capitalism have nothing to do with this.
The political-utopia and ideological system prove the limits of historical errors. The socialist and capitalist represent economical systems.
In other terms, the industrialized countries adapted the globalized process and the economical domination over politics, to promote governmental alternatives to politics of centralization and de-centralization — social protection respectively to the encouragement of free initiatives.
The real solution with anticipation is compromised between socialism and capitalism at global levels. Even China implemented capitalism of state which in academic terms is a sociological neologism.
The types are different types of capitalism. The synthesis between socialism and capitalism is the opportunity for powerfully and reach countries to adapt to global competition. The internal temptations of the global powers are corruption and institutional oligarchy.
The awareness for these foments global problems, terrorism and polarization. For the poor countries their temptations represent development of a consumerist society with an artificially economical growth and also with major social costs.
The awareness for these represents democracy and failure reforms. It’s better to understand that the Keynesian model of Market Economy should not be identified with capitalism, but surely with acycle of real capitalism.
The system of values remains the fundamental stone of any economical and political order. Democracy needs hierarchy and a constitutional democratic socialist system that should replace law enforcement to assure equality of rights.”