[Originally published in The Randolph Herald.]
In the simplest of terms, capitalism is an economic system in which the means of production are privately owned. Socialism is a system in which the means of production are owned collectively or entirely by the state. Communism is a system in which there is collective ownership of the means of production.
From the Marxist perception, capitalism will move to socialism and socialism ultimately will evolve into true communism where the advanced level of awareness (and selflessness) of the people will permit the common ownership of the means of production and property in a classless, egalitarian society for the equal benefit of all members of that society.
The simple fact is that for a number of valid reasons far too complicated to explore here, such a classless society has never evolved on this planet and, given human nature, probably never will. It’s hard to think of man as perfectible.
Whether you like the theory and/or practice of capitalism or not, it has brought the vast majority of our people a standard of living unparalleled in the history of man.
At the same time, there has long been a massive ad hoc program in this country designed to label anything its authors did not like as “socialism”. Most of those who use the word haven’t the foggiest idea what socialism really is. They use it to condemn out of hand such programs as single payer health systems, when many of them benefit directly from such programs themselves. Our military medical program is a single payer system – thus a “socialist” system. With a short stretch, the system which supports the US Congress is a single payer system. If we all had that system (for which we all pay) there would be no philosophical problems with such a reviled “socialist” program.
Most poignant of all is what has been going on in the United States since the subprime crisis, the financial meltdown and a crashing economy hit us. A Republican administration, champions of unfettered capitalism and undying foes of anything they can label “socialist” is in the process of taking over banks, major insurance companies, Investment houses, mortgage companies and capitalist institutions like the automobile industry.
That said, the subprime crisis was not created by the Republicans alone. The Democrats played a large role in creating a system which made unbelievably risky loans to people who never should have been considered worthy. What the Republicans did do was lead the way on deregulation of just about every institution that might have helped us avoid such a crisis.
More than that, before the party was hijacked by Southern Democrats after 1964, the Republicans had represented fiscal responsibility. Yet, over the last eight years they have turned us from a healthy surplus to the greatest deficit this country has ever known. That fact, added to the constant “spend, spend, spend” message of the past eight years, has had a truly negative effect on our balance of payments, our national debt, the weakening of our dollar and our miniscule level of personal saving. These realities, along with the issues in our financial markets, are what is causing our current pain.
Now, we are going to bail out an automobile industry that has been out of step with the needs of this country for years. They have muscled their way out of café standards, preferring to build monster trucks and SUVs that netted them $10,000 per vehicle, to the design and production of fuel-efficient vehicles that might help us survive the inevitable rise we will once again see in the price of oil.
What are we to think? If everything goes according to what appears to be Federal government’s plans, the government, funded by us taxpayers, will soon own most of the banking, mortgage, insurance, securities, and automobile industries. Having done all of that, the government will probably be expected to bail out any other industry hit hard by our recession. Commercial real estate companies are mumbling and could be next, or any other industry that produces items that we do not want or need, or cannot afford.
So, our cherished capitalism, built from the onset on a system of risk and reward, is in the process of dropping the risk component. Instead, those industries are being bailed out by the government, an act which ultimately will serve only to destroy the system as we know it. Capitalism isn’t capitalism when risk is removed. Carefully regulated risk is what constantly forces it to improve. When you remove the risk, you destroy all the potential good in the system. We are likely heading mindlessly toward Socialism, a system whose productivity pales historically in comparison to capitalism.
Haviland Smith is a former long-term resident of Brookfield. He now lives in Williston.
