Imagine playing the game of Monopoly with your friends. According to the rules, no one can be forced to trade with anyone they don’t wish to and properties are acquired by chance landings or the strategic use of cash. You may notice that the game always ends in the same manner: one player gets all the money.
I would argue that this stands as a reasonable, if not corrupted demonstration of the economic system of capitalism. That said, I don’t think this economic system is such a dreadful thing when you examine the causes and effects.
A common misconception is that economics is a zero-sum game where everyone gets only a segment of the pie. Simply look at ever-increasing DOW, the rapidly advancing tech market or even how you conduct a purchase yourself. The picture is one of an ever-expanding pie, with the individual’s slice contingent upon their activity within the system.
Just as Adam Smith, the “Father of Capitalism” outlined, all players of the game will only willingly make an exchange if it is beneficial for themselves. This hinges on the fact that the individual who knows best what you need is yourself. Certainly, in your own life you would not purchase something, or invest in an activity that would negatively affect you.
In contrast, the system called socialism is defined as the centralization of the means of production and its contemporary sibling, democratic socialism, is the democratic ownership of the means of production. The ever-popular democratic socialism proposes that the course of centralized public operation be subject to referendum.
Following Marxist doctrine, “From each according to his ability, to each according to his need” at its face sounds benign, as does the institution of socialism. The system’s problems arise from three factors; centralization, ensuring the application of the system and the omnipresent human element.
The centralization of production has a very traceable and well documented path. When something becomes a monolith in the marketplace what follows is a loss of competition and the necessity of generalization. Lack of competition provides no incentive to deliver a quality product. Take for instance the introduction of privatized FedEx when people became tired of inconsistency of the US Postal Service. This inferior quality of product is also due in part to necessity of generalization. In contrast to a free market’s focus on the individual and their knowledge of what they need, a centralized system is forced cater to the taxpayer that funds them with a ubiquitous provider of the most necessary services of the people. This removes the individual of not only choice, but ability to choose.
A further issue is ensuring the application of the system. This means the legal enforcement of taxation and forceful redistribution of means—means cannot remain un-centralized and private. Not only does this violate “life, liberty and the pursuit of happiness” but attempts to redress disparity that people are born into with direct violation on the whim of whomever is socializing.
The omnipresent human element is the final nail in the coffin for me regarding socialism. Unfortunately, in practice people wish to express individuality: buy the food they want, acquire the healthcare they specifically need and reap the benefits they sow rather than return them to the state. The other, far more sinister human element is that of power. The 20th century is rife with examples of socialism gone bad. The ideology came about in the 19th century and was thoroughly tested in the next century, with the most poignant examples being Stalin’s Russia and Mao’s China. In both cases the centralization of the economy begat tyranny and directly killed over 30 million people in the USSR and over 50 million in China over the course of mere decades.
Many people I know would posit that these are not examples of true socialism, or that its democratic sibling would be “different.” I applaud their altruism and faith in the system as an idea but suggest that they would be the ones who would be assassinated by a less altruistic human who wished to take advantage of a system with no self-balancing qualities.
Glance at countries that do not exercise the same capitalistic principles and you will find either unnatural disparity or unnatural equality of outcome, both of which require legal compulsion. Look no further than the last 100 years to find countless examples of this compulsion and the outcome of socialized action against the successful in a country. To name one, the Kulaks; an agricultural class that was very successful in early 20th century USSR that was wiped out or arrested to collectivize their farms for production. This removal of the an effective populous resulted in the lack of productive farming and is attributed to the death by starvation of approximately 6 million Ukrainians. A more contemporary example has transpired in Zimbabwe as white farmer’s land was legally seized and redistributed in the name of anti-imperialism to the tune of $12 Billion loss in its agricultural production; a country that once exported food, now relies on donations from neighboring countries to feed their people.
Maybe now you can begin to understand my response to the overwhelming desire to adopt some form of the system of socialism; it is one of confusion and distress.
Bill Gates did not force anyone to buy a computer. Jeff Bezos consistently provides a consistent service that people choose to pay for. Stock brokers leverage knowledge, skill and resources to convince people to willingly purchase the thing they select.
I seek to argue that the underlying system should not be entirely blamed for how it is applied. On the contrary, the shortcomings of a system are found in dynamic between its principles and the flawed humans that implement them. Historically the success of capitalism can be readily observed, with its adverse natures being entirely explicable through human greed, legislation and social rules. Yet these negatives constantly find checks and balances in the free market and an arguably increasingly free society.
Suffice it to say, I am a fan of capitalism. When properly practiced, it allows for the voluntary movement of wealth (in stark contrast to socialism) and has irrefutably been the greatest bringer of health, quality of life and equality of opportunity in the history of humanity.
Chris Salsbury, Copy Chief
