"When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper which should have been gold, are a token of honor -- your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money." ~ Ayn Rand
Capitalism Is Not Freedom, and Socialism Is Not Love
Exclusive to STR
October 29, 2007
"cap'i'tal'ism (k'p''-tl-'z''m) n. An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market." -- The American Heritage Dictionary
"so'cial'ism (s''sh'-l'z''m) n. 1.a. A social system in which the means of producing and distributing goods are owned collectively and political power is exercised by the whole community. b. The theory or practice of those who support such a social system. 2. The building of the material base for communism under the dictatorship of the proletariat in Marxist-Leninist theory." -- Ibid
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There are other definitions for "capitalism" and "socialism" than those shown above. The Encyclopedia Britannica says that socialism is a "system of social organization in which property and the distribution of income are subject to social control rather than individual determination or market forces." That isn't quite the same as the American Heritage Dictionary's definition, and the differences, in practice, could be extreme. The National Socialist German Workers Party, also known as the Nazi Party, certainly had a different take on the word "socialist" than do most self-proclaimed socialists today, for another example.
Likewise, the word "capitalism" can mean a great many and sometimes contradictory things to different people. America is often called a capitalist country, but today's America is more a mix of capitalism, socialism, fascism, and corporatism -- run by a veiled oligarchy and housed in the faded ruins of a democratic republic.
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Using the most common definitions, capitalism is a market arrangement, not a political system. Capitalism is not imposed coercively and is not specifically concerned with human well-being, beyond offering potential returns to those with capital and potential jobs to those with labor to offer. Risk is handled in the market by insurance, charity, and friends or family. The political structure can be a democracy, a republic, a monarchy, a dictatorship, or any number of things, as long as the market itself remains somewhat free.
In contrast, socialism is a coercive political system imposed by force (in terms of high taxation forced upon citizens, like it or not, even if the government is democratically elected) and explicitly focused, at least in theory, on benefiting the less fortunate by taking from the rich and giving to the poor. Protecting against risk is the main justification for the whole enterprise; government safety nets cover every possible contingency from medical need to job loss, from grief counseling to dietary assistance. Non-coercive, non-State, voluntaryist forms of socialism exist (e.g., the commune your sister-in-law joined for a few years after college), but this isn't what people typically mean when they say "socialism."
In theory, capitalism is free-market, materialistic, and coldly Darwinian; individuals may be rich or poor or anywhere in between, but social and economic mobility are high and even the poorest at least have their freedom. Socialism is somehow more compassionate despite the high taxes and other coercion and is consciously aimed at creating a good life for all; extremes of wealth are largely evened out.
In practice, things can be very different for both systems.
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This line of thought intruded on my sleep recently in an early-morning musing triggered by a report I'd read the night before of slavery for the underclass in Dubai. The problem ranges from "guest workers" lured to the kingdom only to have their passports and visas confiscated and every promise made to them broken, to girls and women kidnapped and sold into sexual slavery, to children enslaved (and nearly starved to keep their weight down) for use in local camel races.
Researching the problem gives the sense of a nightmare dystopia for the majority of those living in Dubai , who have almost no rights, no recourse, no power, no money, no hope for improvement, and little or no freedom of action.
Dubai is a shockingly wealthy playground for the rich (or see CBS video here), but gangsters and businessmen and the ruling elite in that country are turning the lives of many thousands into hell -- not to make money, but simply to make more money than they would otherwise be raking in. Paying market wages (including providing conditions workers would voluntarily tolerate) costs money, but not so much that prostitution, construction, and other boom-town work isn't profitable. Using slaves is not necessary for these businesses to survive and prosper: it is just a way to boost the bottom line. The government is complicit and, for that matter, Sheikh Mohammed bin Rashid al-Maktoum, the Big Cheese himself, "has been accused of enslaving thousands of young children for camel races in a class-action lawsuit filed in the US."
Dubai is often described as a shining example of capitalist success, yet outright slavery is apparently a very real problem in Dubai . The United States was in a similar position for almost a century after its break from England ; "freedom" was, to some extent, at least in the South, financed by the use of slave labor, and even many of our revered "founding fathers" were slave owners. Market freedom (and almost any other freedom) was denied to slaves in the old American South, just as freedom is denied to the slaves and semi-slaves of modern Dubai .
We all want to think the world has moved beyond such barbaric treatment of the downtrodden, and yet we all know better: slavery, torture, tyranny, and evil of every type are commonplace around the globe -- not everywhere, thank goodness, but in far more places than we want to believe. Imagine life in a U.S. or Australian SuperMax prison or in Guantanamo, for example. Imagine life as an Untouchable on the streets of Calcutta or as a refugee in Darfur or as a Falun Gong member being tortured in a Chinese prison camp -- or murdered in such a camp so one's organs can be harvested and sold.
How could such evil exist in the modern world? Why would anyone even consider treating others in such fashion?
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Government socialism, like capitalism, is not always as advertised or hoped for. This is hardly surprising, given that coercive State power is no different than any other form of coercion -- except that the State is stronger, more pervasive, and harder to resist.
The ultimate expression of coercive State socialism is Communism, and Communism has been a nightmare of tyranny, poverty, and epic mass-murder every time it has been tried. For supporting data, see the heavily-researched Black Book of Communism: Crimes, Terror, Repression -- written not by "conservatives" but by European Marxist scholars, who were as stunned as anyone by what they found while digging through archives and other material that became available after the fall of the Soviet Union . The authors went on to research Communism throughout the Twentieth Century and found a consistent pattern of thuggery, mass murder, calculated atrocity, and resulting widespread misery.
The Black Book is hardly the only source for information on the true nature of Communist governments; consider R. J. Rummel's Death by Government or his vast website with a claimed 5,000 pages of documentation on not only Communist governments but governments of all types. Rummel points out that it is power itself, not a particular structure of power, which is the problem, although he believes democratic institutions can restrain the growth and misuse of power -- something I see increasingly disproved in my own nation of the United States .
Socialist nations that already have significant wealth and infrastructure, and which leave enough of the market in place to maintain some wealth-generating capacity, can do well for decades, although wealth erodes as incentives for non-productivity and penalties for being productive change the actions and character of the population. One sees this even in Sweden and other "enlightened" socialist nations, while in others -- Cuba, Belarus, and North Korea, for example -- the quality of life is simply abysmal.
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The determination to create a truly compassionate world -- which is the essence of what people want, at their core, from socialism -- is both healthy and necessary. Yet use of coercion to create compassion betrays that desire, because coercion itself is cruel and unhealthy. Coercion is the opposite of compassion; more of one leads to less of the other. Ultimately, coercion is destructive of the healthy goals of socialism, which is why State socialism fails to live up to hopes and expectations. (There are unhealthy goals associated with socialism also -- the goals typically found among those in power, especially -- but that is a topic for another day).
The desire for freedom and the understanding of freedom's importance in creating healthy and prosperous societies -- the foundation for uncorrupted, non-corporatist free-market "capitalist" societies, if we ever have any -- is every bit as important as the desire for compassion and brotherhood.
Love without freedom is a fraud; freedom without love is also a fraud. Love and freedom are a duality in human life, and having only one is not an option. Each of those two qualities depends upon the other.
Love comes from emotional health, which in turn comes from compassionate, loving, and respectful treatment early in life. Likewise, a willingness to live and let live comes from having our own needs and desires respected in childhood. Sensitive dependence on early conditions is a powerful human reality -- "As the twig is bent, so grows the tree."
Genuine freedom and deep emotional health -- two qualities beyond even the imagination of most people presently on this Earth -- will be the only salvation for our kind, assuming we can manage such a feat. The memes of capitalism and socialism are but faint, unfocused images of the love and freedom we truly want and will need for survival in the coming years.