Socialism Vs Capitalism

We Americans oftentimes tend to oversimplify things, especially when it benefits our agendas.  On the other hand, and when it also benefits our agendas, we can pretty much gum up the works by overly complicating things to a state of near incomprehension. 

In a political sense, we have probably oversimplified the terms liberal and conservative.  Even among the passionate advocates of either persuasion, there is much debate about the true meaning of their respective philosophy.  There seems to be degrees of each discipline.  In some form or fashion, that particular distinction pretty much dominates all political discussion in our nation these days. 

I want to focus this piece on another area of oversimplification; that being the terms socialism and capitalism.  Let us begin with some basic economics definitions. 

Socialism: an economic theory or system in which the means of production, distribution, and exchange are owned by the community collectively, usually through the state.  It is characterized by production for the use rather than profit, by equality of individual wealth, by the absence of competitive economic activity, and usually by government determination of investment, prices, and production levels. 

Capitalism: an economic system in which the means of production and distribution are privately or corporately owned and development occurs through the accumulation and reinvestment gained in a free market.

Distribution: the division of the total income of a community among its members, especially between labor incomes (wages and salaries) and property incomes (rents, interest, and dividends).

Redistribution: an economic theory or policy that advocates reducing inequalities in the distribution of wealth. 

Equality: the state of being equal. 

Equity: the state or quality of being just and fair.

Democracy: a government by the people in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system.

After considering the above definitions, it is important to note that the definitions used for socialism and capitalism are couched in economics; not politics.  These are the tools used by our government to deliver the product set forth in our Constitution.  That last definition defines our country.   Our nation is a democracy and is based upon a clearly drawn blueprint known as our Constitution. 

Our Constitution is the “what”.  Our Declaration of Independence is the “why”. These documents are not overly complicated and are certainly not beyond the comprehension of the average American.  They were, in fact, written by people not unlike you or me.  Here is a transcript of the Declaration of Independence with some good analysis links in the margins: https://www.archives.gov/founding-docs/declaration-transcript .  And here is a transcript of the Constitution, also with some good supplemental links: https://www.heritage.org/constitution/#!/articles/1/essays/38/commerce-among-the-states .

Fed up with the tyranny of the British Crown, the United Colonies announced their independence and proceeded down the historical path of first gaining that independence through war and then earning that independence through practice.  That earning continues today.  Part and parcel of that earning is the eternal and ongoing tension between the differing but not mutually exclusive philosophies of socialism and capitalism.  I challenge you to find either of these terms in the two documents referenced above.

Our forefathers threw off the yoke of an oppressive government because they were being unfairly represented, unjustly taxed, and restricted in their fundamental rights and liberties.  The nation they envisioned, and the one that has manifested itself from that origin, is not totally faithful to either form of economics.  Ideally, it represents a balance and blend of the better parts from both systems.  When we go to the polls, we do not vote for either/or; we vote for the blending recipe.

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We can use the term compassionate conservative or we can use the term blue dog Democrat.  Both terms are meant to reflect a philosophy that even though governed pre-dominantly by a conservative or liberal tilt, it also contains important and selected principles from its counterpart’s theory.  This is what our country is when it comes to the subject of economics. 

Both national parties obviously desire that our nation be by the people and for the people.  And for this to be reality there must be aspects of capitalism in our culture.  I am talking about the opportunities presented to all citizens through free markets, entrepreneurial enterprises, and the risk/reward principles of self-sacrifice.  But there must also be a recognition that a purely capitalist approach to economics leaves far too many among us subject to deprivation, isolation, and sub-level existence in a nation of noble ideals, high values, and blessed wealth.

The fundamental question to be answered by the leaders we select through our Constitutional blueprint, to run our government through our Constitutional blueprint, is how we can preserve the edifying principles of capitalism such as accountability, self-reliance, independence, and pride of accomplishment while insuring that a social consciousness exists to address the needs of those among us who are impoverished through no fault of their own. 

We must guard against falling into the trap where we are all in on either one side or the other.  In this particular case, the proper and just solution is clearly somewhere in the middle.  Here are some very good articles about just such a balance and why it is an eternal struggle to achieve it.

https://www.thebalancesmb.com/the-characteristics-of-capitalism-and-socialism-393509

https://www.economicshelp.org/blog/glossary/capitalism-v-socialism/

https://www.thoughtco.com/socialism-vs-capitalism-4768969

Go back and review the signatories of our two founding documents.  Even though they may not have used the exact terms, these men were clearly inspired by the capitalist principles of independence and self-determination, “Life, Liberty, and the pursuit of Happiness”.  By the same token, they were also aware of the obligation to all when they wrote in the Constitution’s Preamble, “Promote the general Welfare”. 

They had no more conception of Wall Street or Corporate America than they did of Medicare or Social Security.   Yet all of these are part and parcel of our society.  The essential component to our marvelous experiment in democracy lies in the elemental wisdom of our Constitution.  It is left up to our chosen leaders to decide which principles of which economic philosophy we choose to integrate into our government.  Our founders knew that our nation would…no, must evolve and change as history unfolds.  But they also knew there were fundamental and unchanging principles that should dictate how that evolution and change should be managed by our selected leaders. 

If we are true to our Constitution…to our blueprint…then our nation will remain strong and vital regardless of the mix we choose between capitalism and socialism.  But what happens if we fail to select leaders who are worthy of their office and who forget that our government is by the people and for the people?  What if we elect people who will not honor the will of the citizens and choose instead to mold our country in their own vision?  At that time we will have failed those who first conceived of these great United States of America and their glorious ideals will be lost.