Socialism Or Capitalism?

[d4dev]

Hey guys, which form of government do you think is the best? Socialist or Capitalist?

[Black Dog]

Capitalism isn't a form of government. It's an economic system.

[d4dev]

Ok, let's say Capitalist governments or Socialist governments.

[Black Dog]

But what is a capitalist government? The closest I can think of is facism (aka corporatism), where state and corporate interests work hand in hand.

You can have a socialist state government with a capitalist economy.

[d4dev]

The closest I can think of is facism (aka corporatism), where state and corporate interests work hand in hand.

Do you think the US is anyting different? Where Bill Gates is th erichest man in the world and at the same time, New York is having difficulty removing beggars from it's streets? Is that what you call equality? In my opinion, the government should work for the people; in this case, there should be a law which would make it mandatory for big buisnesses to contribute at least 10% of their yearly profits to social causes.

[d4dev]

So capitalists, what is your reaction?

[Hugo]

My reaction is that you have no clue. Beggars on the streets, indeed. You think there were no beggars in the USSR? You think nobody starves in China? Rubbish. If you want to know which citizens have, on average, the best standard of living, it's those in free-market nations.

there should be a law which would make it mandatory for big buisnesses to contribute at least 10% of their yearly profits to social causes.

There is. It's called "taxes", and it's a lot more than 10%.

[d4dev]

Are you saying that there is no social inequality in the US? Canada is much better off.

[d4dev]

It is obvious that when there is a free market, there will be capitalists who will try to maximize their own profits. They have no liability whatsoever towards the common man. Consider for eg. if I have to schedule daily flights between 2 places. The capitalist would only operate flights on the profitable routes and ignore the non-profitable routes. How do people then commute in the second instance? Of course there are many forms of transportation, but that's not the point. Here is where the state steps in and uses the profit it generates on one route to finance the other.

[Black Dog]

Do you think the US is anyting different? Where Bill Gates is th erichest man in the world and at the same time, New York is having difficulty removing beggars from it's streets? Is that what you call equality? In my opinion, the government should work for the people; in this case, there should be a law which would make it mandatory for big buisnesses to contribute at least 10% of their yearly profits to social causes.

My reaction is that you have no clue. Beggars on the streets, indeed. You think there were no beggars in the USSR? You think nobody starves in China? Rubbish. If you want to know which citizens have, on average, the best standard of living, it's those in free-market nations.

There's never been a true "free-market" state anymore than there has ever been a purely socialist state. Both are unfeasable. However, the difference is that (theoretically speaking) is that inequality is the basis of

free-market economics. The high standard of living that exists in free-market nations is often because of socialist-style policies (unionization, for example). The problem is in today's western (read: North American) states, the market is no longer considered a tool by which a high standard of living can be acheived across the board. It is the master. Policies are largely predicated on blind allegiance to an economic dogma that, in practice, has proven to be a failure. It's merely a matter of scale. The Soviet Union, for instance, was an authoritarian state with a centeralized economy, not an actual functioning socialist state.

The mistake free-market apologists often make is equating the economic system and the potential material benefits it can bring with actual freedom. The two are not inseperable and indeed are often incompatable.

There is. It's called "taxes", and it's a lot more than 10%.

Boo-hoo. the top 10 per cent (or whatever) may shoulder a larger part of the tax burden, (what? 40 per cent?) but when you consider they also own more than half of the wealth, the tax system still leans far too heavily on low and middle-income indiividualos and small business: the true drivers of the economy. But I digress.

[d4dev]

"There's never been a true "free-market" state anymore than there has ever been a purely socialist state. Both are unfeasable. However, the difference is that is that inequality is the basis of

free-market economics."

"the top 10 per cent (or whatever) may shoulder a larger part of the tax burden, (what? 40 per cent?) but when you consider they also own more than half of the wealth, the tax system still leans far too heavily on low and middle-income indiividualos and small business: the true drivers of the economy."

I agree completely with Black Dog. The same reason China moved away from communism and opened it's market in the late 80's and 90's. As you said, no economy can be purely capitalist or communist. However, I believe that a country can make progress much faster if it starts out with socialism and then slowly converts to free market policies. The greatest eg of this is China; who can disagree with me that Chinese goods have flooded world markets and the word China has been ubiquitous with progress, after achieving nearly 7% to 8% yearly growth in the past 13 years?

[Hugo]

who can disagree with me that Chinese goods have flooded world markets and the word China has been ubiquitous with progress, after achieving nearly 7% to 8% yearly growth in the past 13 years?

I thought you were interested in socialism for what it did for the common man? The common man in China works very long hours in very poor conditions for a fraction of our minimum wage, has little to no choice of housing or even clothing, and may even be unfortunate enough to live in the rust belt or the pacific-rim cities where pollution has dragged the life expectancy down at least a decade below the rest of the world, and often more.

If your complaint is that capitalism benefits the capitalist at the expense of the common man, my retort is that socialism benefits the state at the (far greater) expense of the common man.

There's never been a true "free-market" state anymore than there has ever been a purely socialist state. Both are unfeasable.

No capitalist has ever disagreed with that. Even Adam Smith was not in favour of a pure free market.

It is obvious that when there is a free market, there will be capitalists who will try to maximize their own profits. They have no liability whatsoever towards the common man.

This is why we have law and morality. Capitalism 'fails' when law and morality fail. Socialism fails from the get-go because it's downfall is human nature - you won't convince anyone to give according to his abilities when he'll still only be given to according to his needs, no matter how hard he works. Except, of course, at the point of a gun, and this is often what the Communist states had to resort to.

Policies are largely predicated on blind allegiance to an economic dogma that, in practice, has proven to be a failure.

You have attacked Craig Read for calling Islam a failure, but here you are, attacking capitalism in the exact same way. Why has it failed, and what system has, in general, achieved better results for the people?

The free market (as we understand it) has "failed" only in the eyes of some beholders. You may see, for instance, the gap between rich and poor as a problem, whilst others see it as an incentive.

the tax system still leans far too heavily on low and middle-income indiividualos and small business: the true drivers of the economy. But I digress.

Everyone who is productive is a driver of the economy. All taxation, at every level, stunts the economy. Heavy taxes on the rich discourage investment and growth. Heavy taxes on the poor discourage consumer spending. Taxes are a necessary evil, and like all necessary evils should be kept to a minimum, in my opinion.

[Black Dog]

You have attacked Craig Read for calling Islam a failure, but here you are, attacking capitalism in the exact same way. Why has it failed, and what system has, in general, achieved better results for the people?

The free market (as we understand it) has "failed" only in the eyes of some beholders. You may see, for instance, the gap between rich and poor as a problem, whilst others see it as an incentive.

To paraphrase Churchill: capitalism is the worst system we have but it's better than the rest.

I have no problem with capitalism as a tool for creating wealth and maintaining a high standard of living, so long as it is balanced by state intervention to curb the rampant excesses, injustices and inequalities inherent in capitalism.

The gap between rich and poor is a problem because it is the result of fundamental inequalities built into the system. You assume that everyone starts out with the same opportunities to advance themesleve (the old bootstraps mentality). That's patently false. As it is, capitalism is a heirarchal system that depends on a constant state of inequality between workers and holder of capital.

[Hugo]

I have no problem with capitalism as a tool for creating wealth and maintaining a high standard of living, so long as it is balanced by state intervention to curb the rampant excesses, injustices and inequalities inherent in capitalism.

Then we are in agreement. I would further add that moral and ethical standards are also useful, or rather essential, to the society with capitalist economics. These can sometimes even be a substitute for law. My example of this would be the early New England colonies, which with an almost complete absence of economic law (indeed, they spent their time trying to evade English economic laws), thanks to their Puritan and Quaker moralities, still developed a prosperous and also an ethical society, those colonies being crucial in abolitionism in later years, for instance.

The gap between rich and poor is a problem because it is the result of fundamental inequalities built into the system.

I believe the gap is a cultural rather than an economic phenomenon. America has a vast gap, but even though Japan is probably even more capitalist than America, the gap is far smaller in Japan, and the average Japanese CEO takes home a fraction of that which his American counterpart does. This is even true for Japanese corporate giants such as Mitsubishi, Matsushita, Nissan and so forth.

And no, people never start on an equal footing. They never will, no matter what you do. Even if you make everything equal economically, you are still going to have clever and stupid, handsome and ugly, charming and irksome. More to the point, the problem of starting from unequal positions is even worse in socialist countries, where advancement depends not upon intelligence or skills, or even money, but upon ancestry, Party devotion and so forth. One of the reasons that socialist economies fail so badly is that positions of control are held not by those most fit but by those most politically trustworthy.

Of course, that isn't part of Marxist theory, but part of my beef with socialism and Communism is that every single time somebody tries to apply them, it always degenerates into a hodge-podge of primitive capitalism, welfare state and nepotistic feudalism.

A theory that won't fit into the real world is called "wrong", and that's exactly what Marxism is: wrong.

[Craig Read]

Hugo good points - let me carry on from your post. Socialism and its variants - economic Marxism, fascism, communism, Islamo-Fascism and Divine Right Rule - are nothing more than philosophies of centralisation. There is no difference in objectives and goals between fascism and communism. The media has it wrong. They are not right and left wing, they are both left wing and both committed to limiting freedom.

The history of man is the struggle of the individual against the centre.

All socialist systems have been poorer than orthodox liberal systems. Those who rave against the rich are pathetic with penis envy. The bottom 50 % of wage earners in the US pay 4 % of the income tax. In Canada 10 %. The top 20 % in both countries pay most of the bills.

The rich in Canada are classified at >$100 k per annum income. In the US it is $295 K US.

The rich create jobs, capital investments and donate to charity, the arts, the sciences, schools and allow the formation of capital markets so the rest of us benefit. They are not evil, not corrupt for the most part, nor socially irresponsible. They are good at certain things and have been successful. You can hate Shania Twain's music [i do for instance] but I certainly don't begrudge her money or even care what she does with it.

Demand side economics, 5 yr plans, massive redistribution, high spend philosophies all fail.

The only system that generates wealth, growth and jobs has been empirically proven to be supply side economic policy coupled with liberal institutions and clear unambiguous and well targeted regulations. These plus codified liberal laws, separation of powers, a deep capital market, fluid banking sector and fluid labor markets will allow one to prosper.

On some other posts i rail against what i call the new Al Capone's. Capone had a business card it said 'furniture dealer'. Bernie Ebber's said 'World Com President'. Criminals like Ebbers, and I think Grasso at the NYSE MUST be prosecuted and flailed, tortured and their money taken away. Capitalism does not support these type of men. It supports honest effort, toil. A whole moral philosophy no one discusses is built into Capitalism.

The best book on this is M. Novak's book 'The Spirit of Capitalism.' Awesome work.

Socialism i believe is immoral for a number of reasons and the effects of that immorality are shown in lower living standards and economic stagnation. [see the FSU].

Currently the EU has negative growth. There are very good reasons for this. Not only are they lazy on average but the fiscal/monetary/regulatory/tax regimes are not logically built nor is a EU wide state with 4 levels of gov't a logical construction.

Canada suffers from the same illness as the EU.

Socialism and over governance.

And I did not even touch on the political and moral issues with socialism - both of which are as profound as the economic problem and which Hugo alluded to above.

[d4dev]

"The rich create jobs, capital investments and donate to charity, the arts, the sciences, schools and allow the formation of capital markets so the rest of us benefit"

"Demand side economics, 5 yr plans, massive redistribution, high spend philosophies all fail."

Oh, so bless the rich, God! they are here save our souls! I have never heard such a ridiculous statement in my life. How many rich people donate to charity, and even if they do, what proportion of their income is it? Don't tell me that poor people like me have survived till today only because of the donations of the rich And are you saying that a government which is based on the principle of distribution of income and not the "Survival of the fittest" but the survival of all the citizens of the country contributes less to the welfare of the poor than the rich people in a capitalist country do in a year? You are mistaken maan! And are you saying that planned 5 yr economies are more likely to fail than unplanned ones? Do you know what planning is in the first place? Can you explain why the USSR took just 30 years after the revolution to become a superpower on par with the US which took 150 years to get there?

[Craig Read]

Do you have any facts to back up your nonsense ? Your silly shrill exhortations against capital formation are 150 years out of date.

You live in a society built with capital. If you don't like it, go live in Africa, Cuba, China or Mexico.

As for charity look up these names; Morgan, Rockefeller, Gates, Malone, Buffet, Allen, Spieberg, Bezos, Weill, Soros, Turner, Welch just to name a few off the top of my head. Add up what they put back into society. Gates alone contributes $2 billion per year towards a myriad of programs.

How much do Socialist governors put back into society ?

[d4dev]

Gates alone contributes $2 billion per year towards a myriad of programs.

Oh yeah? Back it up with evidence. Just rattling of some figures does not prove anything. Cite your source. I know that Gates donates, but also let me know what percentage of his income that is. And let me if it would have been better if he was in a socialist state and the government would have confiscated half of his profits and redistributed them amongst the poor. Then he would not be the richest man in the world and the poor people would have enjoyed a better standard of living.

[Hugo]

http://www.gatesfoundation.org/nr/public/m...ants.Amount.htm

Total grants: $800.8 million. Not quite $2bn, but I think that that's a fairly substantial sum. The Canadian military received $800m in the 2003-2004 budget.

And let me if it would have been better if he was in a socialist state and the government would have confiscated half of his profits and redistributed them amongst the poor.

If he was in a socialist state he wouldn't have made any profits, because socialism stifles innovation and acumen and prevents companies like Microsoft and entrepreneurs like Gates from getting off the ground.

So, under capitalism, social causes get $800m. Under socialism, they'd get $0.

[d4dev]

If he was in a socialist state he wouldn't have made any profits, because socialism stifles innovation and acumen and prevents companies like Microsoft and entrepreneurs like Gates from getting off the ground.

Wrong again. Let me make the difference clear between socialism and communism. This is not communism we are talking about guys, socialist economies are the ones like Canada or Sweden or India or France; there is a difference between capitalist economies like the US and let's say Canada because the US wants to privatize whatever it has(thank God it has not privatized the armed forces until now) whereas in Canada, many enterprises are stll government owned, or in which the government has a majority 51% stake.

[Hugo]

socialist economies are the ones like Canada or Sweden or India or France

No, those economies are called "mixed" economies. You need to learn the correct terminology, otherwise you end up making a fool of yourself.

[Derek]

Do you think the US is anyting different? Where Bill Gates is th erichest man in the world and at the same time, New York is having difficulty removing beggars from it's streets? Is that what you call equality? In my opinion, the government should work for the people; in this case, there should be a law which would make it mandatory for big buisnesses to contribute at least 10% of their yearly profits to social causes.

Yea right. The homeless got there because they are lazy.

Its not hard to get a job at a gas station, Mcdonalds, etc. etc.

Bill gates is the richest man, because he designed a system, in which we all use today. Today with what he pioneered, we use daily.

Bill gates use to have 0 dollars. at one point before his computer business took off.

Bill gates isn't the best example.

Let me tell you a story of my great uncle. He was a good golfer and farmed in southern Nebraska. Early in his life, he had the option of joining the IBM team in its earliest stages, and being one of the Leaders of little team with a big dream. Instead of investing and following them he went into farming. Later he went bankrupt as he saw IBM take off into what it is today. He could have been a multi-millionaire, if not a billionaire. He had no money, and no way to support his family. He was broke, while IBM was making millions. But this story as a happy ending as he fell back on his good golfing ability and became a pro. He would have been homeless if he would have given up. Instead he worked through it. My great uncle wasn't one of the riskiest people in the world, as you can tell.

That just shows the fine line that separates beggar from billionaire.

[Craig Read]

Yes good example. Capitalism is the only system to free and support the worker.

IBM is a good case. Thomas Watson Snr. started the firm in Upstate NY selling cheese cutters door to door. He jumped on gov't contracts during WWII to provide equipment to the US military. After the war the firm developed into high tech, computers, peripherals and emerging networks.

Now IBM has $80 billion per annum in sales and spins off countless enterprises each year that employ thousands more people, not to mention the entire value chain that survives off IBM business.

IBM has enriched the world and society and made hundreds of thousands of people comfortable. According the mad marxists on this website such a firm should not exist.

It does not conform to their utopia of egalite and centralisation.

[KrustyKidd]

That just shows the fine line that separates beggar from billionaire.

So true. A small peeve of mine is when I read, see, hear from experts in magazines, radio, papers the Oprah show whatever on how to become rich like themselves. Their millionaire answers; work hard, don't be afraid to take chances, be positive, network, invest. Sound like anybody you know? It sure does, probably a good 100% of entreprennuers. They are so full of shit.

So, what is the big secret they have that they will not disclose?

Luck.

In a world where there was no need for a computor Bill would have been a janitor, IBM would be nothing. At the point they started nobody knew what the future would hold. They just happened to be on the right track out of thousands.

It is hard work, vision, enthusiasm and ........ luck.

[Angelus22]

I have been reading the contributions to both of these ideas. I can only add my opinions because obviously both Captism/Free Market and Socialism/Communism both have aspects which are beneficial to society. It seems to me that society has great failures when either of these are taken to extremes.

Pure Capitalism fails because it leads to byzantine corruption and is also self-destructive as it creates economic inequality where the majority lives at the expense of the minority (ie the poor and the rich). This is partly because the Rich are able to own passive income generators that allow them to accumulate wealth without personal effort into it and this benefit is inherited by their children. Secondly as technology advances it will self-destruct as they minimise their human labour with better technology. Capitalism is a system that depends on all of it's members to be engaged in work to support it... so this is eventually the sort of problem that Marx predicts would be defeating for capitalism. This is liberty at the expense of equality.

Pure Communism/socialism fails for a number of reasons which have been well publicised. It tries to create a system where everyone is economically equal and yet as has been outlined time and time again, the only way to ensure that equality is usually by military force.

(In my opinion any system that must enforce its policy through military force is a failure as it has demonstrated it's inability to govern and develop its society. The sort of dissidents you get in that society is merely a symptom of it's ill health, and a military is not a cure for it.... but I digress.)

In communism everyone is forced to be an equal worker and for this reason it is equality at the price of liberty.

The fundamental flaws behind both these extremes is their placement of the human being as a worker. Both of them depend on an economy where the society is made to work towards it. These sort of economies will oppress a society for the many demonstrated reasons that we can witness in both com and cap.

Any economy that treats living human beings as merely cogs in some giant machine can not be surprised when some of them get crushed in the pressure (excuse my metaphorism).

You may agree with me or you may not, either way I would invite you to look at a system I am working on called Humanitarianism which focuses on a system to allow the economy to support the society.

http://www.geniocracy.net if you're interested.

Angelus Michaels