Tag Archives: economic models comparison

Billionaires Won’t Save You, And Socialism Won’t Kill You

In 2010 I wrote an essay titled, “The fundamental problem with the economy,” in which I argue poverty exists because most business owners pay their employees the lowest wages possible while charging their customers the highest prices for the cheapest-made products, and I suggest that business owners could eradicate poverty by paying equitable wages and fair prices. A few days ago, one of my readers left the following comment and video in response to that blog:

 

“We can start by having the biggest US companies follow your example; like Apple, Google, Facebook, Amazon, Walmart, Microsoft, Exxon-Mobile, Chase, Wells-Fargo and Berkshire Hathaway. You think they would do it? Most of the giant corporations are run by liberal-leaning CEOs.

Look at Venezuela, they have Socialism and the governments seized too many companies and they’re not producing enough food to feed people. People are going hungry and babies are not getting their milk. What is your analysis on the Venezuelan condition? You should do a blog on it.”

 

 

CEOs could end poverty tomorrow if they all collectively agreed to pay their workers a fair share of profits and charge customers fair prices, but small-to-medium-sized business owners can’t do that. As long as most businesses charge extortion prices, they force each other to pass on their operating costs to their workers and customers to keep up with the price of doing business in a cut-throat economy.

Every Fortune 500 company could afford to lower their profit margins, but they don’t, not because it would hurt their business’s chance of survival, but because the owners and investors wouldn’t be able to horde as much money for themselves.

If Microsoft and Berkshire and Hathaway needed every penny of their profits to operate, then Bill Gates and Warren Buffet wouldn’t have been able to pocket billions of dollars in profit. So the price of Microsoft and Berkshire Hathaway’s products and services aren’t based on necessity. They’re based on two factors:

1: How badly Gates and Buffet want to stockpile money they’ll never spend

2: How little Gates and Buffet care about their workers and customers’ quality of life

This makes them either the most evil or delusional people in the world. They may talk progressive and give fractions of their fortunes back to the poor through charities, but they’re still driving the train of economic inequality full speed ahead. Even billionaire, George Soros, who American conservatives hate for sponsoring Democratic politicians, is still raping the lower classes to feed his insatiable bank account. Today’s billionaires are the modern-day version of feudal lords or colonial slave plantation owners. No matter how neat their ideas are, or how many pet charities they support, they’re still the reason poor people’s lives are a living hell.

Take a minute and let the gravity of this sink in. Generations of our ancestors wasted their lives, working themselves to death at jobs that treated and paid them like they’re less than human. They spent their lives working against their will, doing things that had no personal meaning to them and only kept going to work out of fear. Fulfilling their boss’s contrived responsibility robbed them of the time they had to fulfill their potential and give their lives meaning.

This is why economic theories like Socialism and Communism were invented, because business owners have been literally and existentially killing their workers and customers for all of human history, and they still are.

The poor need a new economic system more than the rich need more expensive luxuries, but America is the world’s dominating superpower, and the majority of America’s population identifies as pro-Christian, conservative and Capitalist. Most Americans couldn’t tell you what Communism or Socialism are, but they know they’re evil and, every country that has tried them has failed, which proves (to them) Capitalism is the best economic system.

America can’t change until it can have a sane national dialogue about economics. It can’t do that as long as the majority of Americans believe anything divergent from Capitalism is evil. To that end, they need to learn it doesn’t make any sense to demonize Communism and Socialism for at least four reasons:

 

1: None of the countries that called themselves Communist or Socialist were what they claimed to be.

Immediately after Lenin seized power in the Soviet Union, his countrymen raised an army and went to civil war with him because he didn’t implement Communism. He implemented a fascist dictatorship with some poorly implemented aspects of Communism. When his followers pointed this out, he justified this by basically saying, “Yeah, I know it’s not really Communism, but that’s a goal we have to work towards, and these are desperate times. So what we’re doing right now is ‘War Communism,” which will be replaced by real Communism when things settle down a bit.” But instead, he reinstated a limited amount of Capitalism and turned a blind eye to black market Capitalism.

 

 

After Lenin died, Stalin took Lenin’s fascist leadership style to the next level, and in less than one hundred years, corruption and greed imploded the U.S.S.R. before anything resembling Marx’s Communism could be implemented.

China’s ruling party calls itself Communist, but the country is run by billionaires and is full of sweatshops. The definition of “Communism” is, “a political theory advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs.”

The definition of “sweatshop” is, “a factory or workshop, especially in the clothing industry, where manual workers are employed at very low wages for long hours and under poor conditions.” Billionaires, sweatshops and iron-fisted authority are all antithetical to Communism.

If you were to study any Communist country without knowing it was Communist, and then tried to identify what kind of government it has, you’d probably guess fascism every time. That doesn’t mean Communism is fascist. It means fascist leaders use doublespeak.

I’m not saying Communism is better than Capitalism or that it should be tried again. I’m just pointing out that claiming Capitalism is the best system in the world because Communism failed, is like saying Coke is better than Pepsi because Faygo is disgusting, and Juggalos are crazy.

 

 

2: America has made efforts to destabilize every country that has ever called itself Communist or Socialist.

 

A long quote by Will Blum from "Killing Hope," which says every non-capitalist country has been sabotaged by capitalist ones.

 

The Vietnam War, the Cold War, and the Cuban Missile Crisis were campaigns in the war between Capitalism and Communism. America orchestrated dozens of coups and bloody revolutions in its war against alternative economic models. So the argument that Capitalism is the best economic model because every Communist and Socialist experiment has failed, is like saying your Nike shoes are better than someone else’s Adidas shoes because you won a race against them after shooting them in the face.

 

3: Socialism is a blanket term for a wide range of nuanced economic models.

Socialism is defined, “a range of economic and social systems characterized by social ownership and democratic control of the means of production, as well as the political theories, and movements associated with them. Social ownership may refer to forms of public, collective, or cooperative ownership, or to citizen ownership of equity. There are many varieties of socialism and there is no single definition encapsulating all of them. Social ownership is the common element shared by its various forms.”

Ultimately, Socialism means employees share ownership and profits of the company they work for. This means co-op grocery stores are the smallest example of Socialism, but you can scale the concept up and mix and match it with different government styles. Just look at Wikipedia’s list of different flavors of Socialism.

 

Saying Socialism doesn’t work because Venezuelans are hungry is like saying it’s impossible to raise dogs as pets because you know somebody who tried to raise a wolf and it ate their children. Even if Chavezism is a legitimate example of one type of Socialism, the argument that Socialism doesn’t work because Venezuela is collapsing, would still be tantamount to saying fishing is a failed method to get food because people have been injured fishing with dynamite. Just because dynamite fishing is crazy, that doesn’t prove hunting is the only way to get food.

 

 

Technically, those metaphors don’t apply to Venezuela anyway, because Venezuela is arguably no more Socialist than China is Communist. Hugo Chavez nationalized a few industries in Venezuela, but he didn’t nationalize every business. So the economy was still predominantly Capitalist.

In theory, the companies he nationalized became the property of the state, and since the state belongs to the people, therefore those companies belong to the people. However, the people didn’t get an equitable share of the profits. A lot of it was stolen by corrupt politicians, and the rest went to subsidizing prices and giving away free stuff.

Plus, the workers didn’t have any control over the companies, and even though Chavez was democratically elected, the policies he implemented and enforced, were his own creation, not the will of the people. When civilians protested him, he ordered police to shoot them in the streets.

If Socialism equals social ownership of businesses, then what happened in Venezuela wasn’t Socialism. It was just fascism, corruption and inefficient bureaucracy failing to fix the problems of a predominantly Capitalist economy.

 

4: Communism, Socialism, and Capitalism aren’t the only possible economic models.

Communism is one man’s theory on how to fix a country that doesn’t exist anymore. Socialism and Capitalism are both spectrums of ideas. The flavor of Capitalism used in America can be more accurately described as “Predatory Capitalism” than “Free Market Capitalism.”

Capitalism is defined, “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.”

Ask anyone who works for a co-op, they’ll attest private ownership of business isn’t inherently evil. Capitalism only becomes predatory when business owners squeeze the life out of the people they’re meant to serve. So claiming Capitalism is evil because America has apocalyptic levels of economic inequality, is like saying nobody should eat cake because your dad owns a poison cake business.

The easiest solution to economic inequality is for business owners to treat their workers and customers as they would want to be treated. Barring that, there are a million other economic models we could design using concepts taken from Communism, Socialism, Capitalism and new ideas we haven’t thought of yet.

 

If you enjoyed this post, you’ll also like these:

Predatory Capitalism Creates Poverty
Socialism and Communism
The Life of the Rich
The Life of the Poor
Oppression in the Workplace
Success and Retirement
The Housing Market
Healthcare in America
The Stock Market
Banks
Taxes
Cryptocurrency
Fixing the Economy
My Tweets About Economics

Americans Need To Learn The Difference Between Socialism, Communism and Capitalism

TL;DR:

Socialism is, “a range of economic and social systems characterized by social ownership and democratic control of the means of production.  Although there are many varieties of socialism and there is no single definition encapsulating all of them, social ownership is the common element shared by its various forms.”

Communism is, “a social, political, and economic ideology and movement whose ultimate goal is the establishment of the communist society, which is a socioeconomic order structured upon the common ownership of the means of production and the absence of social classes, money, and the state.”

Capitalism is, “an economic system based on private ownership of the means of businesses and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment are determined by the owners of the factors of production in financial and capital markets, and prices and the distribution of goods are mainly determined by competition in the market.

 

Socialism

Socialism basically amounts to cooperatively owned businesses. In its purest sense, it has nothing to do with government. You can appoint political leaders any way you want and still have an economy where the workers share ownership/profits of the business they work for. Though a government can be socialist if it dictates businesses must be jointly owned by the workers.

Americans tend to think socialism is the government giving away free stuff like healthcare, welfare, housing, and food to people who don’t work. Socialism isn’t giving away free stuff. It’s people getting a fair share in return for their work.

Having said that, countries like Spain, Italy, Australia, the UK and the Nordic countries have universal healthcare and call it socialized medicine. Hugo Chavez and other politicians who want to spend taxes on social services call themselves socialists. If everyone is going to start using the word “socialist” to mean getting stuff in return for paying taxes, then we can do that, but if that’s the case, then public roads and schools are socialist.

Getting stuff from the government in return for paying taxes looks like socialism because workers are getting a share of the pie, but it’s not really socialism unless everyone gets a fair share of the pie. When you work yourself to death your entire life, and all you get in return is a police state and a few free visits to the doctor’s office, you’re not getting your fair share. That’s not sharing ownership of anything. That’s just getting a negative return on investment.

In order for these services to be truly socialized, the workers would own the hospitals, welfare offices, and public utilities, etc., but in the real world, they’re just allowed to access them to a limited extent as determined by the government. They don’t own these organizations. They’re at the mercy of them.

In many cases, the government doesn’t own them either. The funding for socialized services often trickles down into the pockets of private businesses the government contracts their work out to. That’s not socialism. That’s subsidizing a capitalist economy. Ironically, Americans hate socialism, because it’s obvious that paying companies to give people free stuff is throwing money down a bottomless well. They’re right. It’s a recipe for bankruptcy, but that’s not because socialism doesn’t work. The root of the problem is capitalism.

The goal of capitalism isn’t to spread the wealth among the workers. The goal is for business owners to siphon as much money as possible by underpaying their workers and overcharging their customers. The guiding principle of capitalism is the law of the jungle: survival of the fittest. So when the government pays a company to provide a service, they get the lowest quality product at the highest possible price, and the price is always going up. This isn’t socialism. This is feeding yourself to the wolves.

It would be socialist if everyone paid 50% of their income to the government, and in return, they were given ownership of their own home, free food produced on government owned-land by government employees and bill-less utilities for life.

 

 

Communism

Americans use the words “socialism” and “communism” interchangeably. In reality, they’re not mutually exclusive. Communism includes socialism, but socialism can and does exist independently of communism. Socialism can be as small as a cooperatively owned grocery store. Communism takes socialism to the farthest extent possible: The people own the government, and the government owns everything. Plus, communism goes a thousand steps further to structure every aspect of the government around the philosophies of Karl Marx.

Of all the countries that have called themselves communist, none of them fully adopted all of Marx’s ideas. Blue collar workers never even came close to functionally owning the country’s infrastructure and sharing the profits of the nation’s labor equally. Russia, Cuba, China, and all the Eastern European countries that called themselves communist, were oligarchies or dictatorships that stole the fruits of the people’s labor and gave them barely enough to survive in return. Plus, they all contained pockets of capitalism, especially China. Any country that has miles and miles of sweatshops can’t be communist because slavery is the antithesis of communism.

The Soviet Union didn’t collapse because communism doesn’t work. It collapsed because Leninism and Stalinism don’t work. Nobody knows if communism works because it has never been tried. I’m not saying communism would have worked if anyone had executed Marx’s ideas exactly. I’m just saying, don’t point to failed, self-proclaimed communist states and say they prove communism is evil, especially if the only alternative you’re willing to offer is capitalism.

 

Picture of Joseph Stalin with the caption, "Implemented a dictatorship, called it 'communist.' Generations later, conservatives unable to correctly define 'communism.''"

 

Calling Barack Obama and Bernie Sanders communists is as ludicrous as calling China communist. Barack Obama gave trillions of dollars to predatory banks, crushed social outcry for economic reform, fed the industrial war complex and forced everyone to pay private health insurance companies for low-quality care. Barack Obama is the poster child for extreme capitalism.

Bernie Sanders wants to roll all the costs of medical care and education into the tax fund. If he does that by subsidizing private companies, he’s a capitalist too. If the services are completely government owned, that’s just a socialist island in an ocean of capitalism., which is barely enough to warrant calling Bernie Sanders a socialist, and it’s in a completely different ballpark than communism.

 

Capitalism

Americans love capitalism because they’ve been indoctrinated to since birth. Pro-capitalism propaganda is ubiquitous in American culture. It’s built into elementary school textbooks and children’s cartoons. American patriotism and capitalism-worship didn’t become staples of American culture organically. It was carefully crafted during the Cold War.

Every time a country like Vietnam became “communist” it would stop selling its goods to America, and more importantly, America couldn’t sell their goods to them, buy up their natural resources, or use their workers as outsourced slave labor. The more countries that became communist, the more money American businesses lost. If communism spread to America, business owners would lose all their money. CEOs couldn’t allow that to happen, but they couldn’t tell the American people the real reason they feared communism because poor people wouldn’t fight for the profits of big corporations. So the government and the big businesses convinced the people communism is just evil, and fighting it amounted to fighting for freedom and economic opportunities for everyone.

In theory, capitalism should provide opportunities for everyone, but America arguably doesn’t even have a capitalist economy. In a capitalist economy, every business competes on an equal playing field, but the American laws strangle small businesses into bankruptcy and subsidize big businesses.

 

 

Even without laws that favor the rich, American business can’t afford to pay their workers a living wage or charge their customers fair prices. Business owners have to be as sociopathic as possible to compete in America’s cut-throat market. Perhaps greed and sociopathy are so ingrained in human nature that capitalism needs regulations to work. If that’s the case then capitalism, let alone libertarianism, is as doomed as Stalinism.

Millions of Americans consider it heresy and treason to question the preeminence of capitalism, but it can’t be evil to criticize an economic system. Economies are just tools we’ve created to accomplish a common goal: create an environment out of anarchy that helps everyone survive, fulfill their potential and enjoy life.

Capitalism, communism, and socialism could all work when done efficiently. They could work in conjunction with each other. Every inch of the earth doesn’t need to have the same kind of economy, and everyone doesn’t need to be equal, but everyone deserves the bare minimum of food, water, shelter, healthcare, and utilities.

The only way the masses will ever secure that is if they cooperate. We can’t fight our way to utopia. We have to work together. In order to do that we need to stop dividing the world into “us and them,” and we need to stop demonizing the enemy and focus on uncovering our own flaws.  If we each objectively analyzed our economies and found logical solutions to the problem of poverty, we’d all end up with systems that work.

We could speed up the process If we all just stopped being evil of our own volition. Then we wouldn’t even need to design a new system. We’d just take care of each other and get on with our lives. Either way, we need a revolution in education before any political or economic revolution will work. As it stands, America can’t have this conversation because it doesn’t know what it’s talking about.

 

If you enjoyed this post, you’ll also like these:

 

Predatory Capitalism Creates Poverty
Socialism and Communism
The Life of the Rich
The Life of the Poor
Oppression in the Workplace
Success and Retirement
The Housing Market
Healthcare in America
The Stock Market
Banks
Taxes
Cryptocurrency
Fixing the Economy
My Tweets About Economics

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