I recognize that in this great country of ours, and I do believe it great, there is little tolerance for those that speak in terms other than democracy and capitalism. Nonetheless, if I can beg your indulgence for a time, can we have a discussion about some of the different economic and political systems that humans have created? Can we set aside our prejudices and see what strengths and weaknesses each have?
I am not an expert on political systems or economic theories. I’ve taken the classes and learned some definitions of terms, but frankly I wonder if even academia has come to ground on what we really mean when talk about such labels as communism, socialism, fascism, democracy, etc. For the purpose of this blog, I will assume not and give myself license to express the concepts and label my opinions valid, albeit not authoritative.
Let’s start with making some distinctions. Some labels refer to political systems, or how a group governs itself. Other labels refer to economic systems, or general rules about how commerce is enacted. Some labels bleed over into both categories.
Let’s start off with capitalism: Capitalism is an economic model that assumes commerce is self governing. Production and distribution are motivated primarily by profit. It is regulated by competition, the idea that if you don’t produce the best value, that somebody else will. The decision on what to make and how much can be charged for it are based on what the business organization expects to get as a return on the invested capital. Capital refers to the resources put into production and distribution and may refer to buildings, equipment, money, the cost of labor, etc. In short, it is a system that is governed by projected profits hoped for from the capital put into the system. Government’s role, if any, may be in regulating its excesses.
The promoted strengths of capitalism are that it rewards initiative, that competition encourages efficiency and creativity, and that it increases the value for the consumer. It is also the claimed that capitalism is most conducive to sustainability and growth. In other words, as business organizations are more successful, they return more capital into the economy in the form of wages and shared profits, which in turn increases the consumer’s capacity to spend more on consumables, thus creating an upward spiral in the economic standard of living.
The weaknesses are that capitalism’s self regulations either don’t happen or are damaging to the shared priorities of societies. For instance, if the desire to decrease costs and increase profits results in a company choosing to use child labor, or pollute the environment, there is nobody to discipline the company on behalf of the public good. Along the same lines, the spiral of prosperity created by capitalism can break down. If a few companies, for many possible reasons, are forced to cut back on their investments or workforce then profits stop flowing into the system. The reduction in wages and shared profits result in fewer consumer dollars being available and other companies can’t sell as much. Soon the upward spiral goes downward, throwing the economy into a recession. It was once thought that such downturns were normal and would always be short lived. The Depression of the 1930’s proved that wrong. Today’s financial crisis is again challenging the system.
What about communism? Communism is both an economic and political concept. It assumes that all capital is owned by the group and not individually. Individuals donate their labor and resources and receive an equal share of the production results. All suffer or prosper together based on the results of their common labor. In terms of politics, political decisions are made by consensus of the group and in theory at the most local level possible. Representative councils act on the desires of the whole when direct decision making of the group is impracticable. In short, groups act for themselves in governing and economic production for the benefit of the whole.
In theory, the strength of communism is that it creates a more equal society rather than having class structures based on the accumulation of wealth or aristocratic background. One part of the population does not oppress or take advantage of another as all actions seek to be for the good of the whole. Power is decentralized so that all can share in self government. Economically, wealth is shared by all, eliminating pockets of poverty and economic injustice.
In my opinion, the primary weakness of communism lies in its flawed assessment of human character. The majority of people, over time, have never been able to set aside personal good for the good of the whole. Marx predicted that a centralized government must exist for a time until the population was organized into a communistic model. However, once in power, the great revolutionists of the communist movement, whether Lenin, Mao, or others, chose to keep the power centralized and even enhance it, always using the excuse that they were implementing the ideals of the revolution. In reality, they were just craving, and usually abusing, power. On a more local and individual level, people seldom view their individual contribution as equal and therefore resent the equal distribution of results. And certainly it is true that some work harder than others. And how do you value in economic terms different types of work? How could the pride of the skilled worker allow him or her to take equal profit with the unskilled common laborer? What is the incentive to be more skilled, efficient, or productive? Hence, basic human character, which is usually self serving and competitive, cannot long devote itself to the good of society without some other motivation to do so.
Since the two are often confused and even used interchangeably, let us make some distinctions about socialism. Like communism, socialism is both a political and economic approach. Like communism, socialism claims it works for the good of the whole and for the equalization of society. And, it is true that most self-labeled communistic governments were really just socialistic governments. So, what is the difference? The primary difference lies in the centralization of decision making and ownership of capital. In a socialistic government, centralized ruling bodies sometimes called committees or bureaus, make decisions on economic and political matters. Some responsibilities are delegated to more local committees, but decisions remain under central oversight. All means of production are governed by the central government. Production is controlled by mandated quotas and the allocation of resources. Workers may be paid in rations or coupons which allow them to access products. In short, the centralized government controls economic and political life and acts for the good of the society.
The strength of socialism, again in theory, is that centralized control tends to be more responsive and efficient than decentralized control. Centralized governments acts for the good of society and is able to do so from a bigger-picture perspective. Trained and experienced decision makers are more likely to make successful decisions and can be more responsive to changing societal needs, economic or otherwise.
The primary weakness of the system is that centralized power tends to be corrupt and act more for its enhancement than for the good of the whole. And, as with communism, there is little incentive for individuals to act for the good of the whole or to improve their circumstances through enhanced skills or hard work. In the end, socialistic systems tend to collapse under the own weight or resort to maintaining power through force, intimidation, and increased control.
Let’s talk about democracy. Democracy is a political vs. an economic concept. In its pure form, democracy means that all political decisions are made by the vote of the majority of those governed. Since all people can’t realistically vote on every decision, at least above a very local level, most democracies are representative democracies or republics. In republics, the people elect representatives who then govern on behalf of those who elected them. Government officials are appointed or elected for a short time and then are subject to another vote or appointment if they are to stay in office. A republic attempts to keep the idea of democracy in a more efficient and manageable decision making structure. As long as leaders are subject to re-election, they are thought to be accountable and responsible to those they represent. In addition, republics tend to describe themselves as governed by laws. This means that actions by the government are based on laws which limit or allow specific decisions or actions. In the United States, a portion of the government makes and modifies the law, the congress, while the executive branch, the president and corresponding bureaucracy, enforce the laws. Most Western democracies are similar, although they differ in how easily the laws can be changed and in how much authority the executive is given to act outside the laws.
The strengths of a democracy are that it is accountable to the people, while still achieving some efficiencies and responsiveness. The rule of law seeks to ensure individual liberties and limits the government’s power. Through the election process and communication with their representatives, all citizens can be involved in the government. Centralized power is limited through law, term limits, and political checks and balances.
Among the weaknesses of democracy are that it is limited in efficiency and responsiveness. Decisions usually take a long time due to debate and controversy. Some would say this is also a strength, and so it is, but it is a two edged sword at times. Democracies sometimes act in short-term vs. long term perspectives. The need to retain power when subject to re-election or recall, encourages representatives to make decisions which are good for today, but maybe not good for tomorrow. Democracies, to work, require an informed and involved populace. To the degree citizens do not stay informed and involved; the democracy can fall under the control of special interest groups which polarize action away from the good of society to the good of smaller groups. Finally, since government is by the majority, individual or groups with minority views or backgrounds can be subject to suppression by the majority, thus creating classes of unrepresented individuals and groups. Examples of this in include black slavery and the disenfranchisement or persecution of Native Americans, Hispanic Americans, and some immigrant races, nationalities, or religious groups—not to mention gender.
So what do we have left? I think I mentioned fascism, but I won’t spend much time on it. In a nutshell, fascism is a social and economic system where the ownership of capital is kept private, but which is highly regulated and controlled by a centralized government. As a sort of combination of socialistic government and capitalistic economy, some have suggested fascism could be a highly successful system since it retains many of the advantages of competition that capitalism has, while retaining the long term goals and regulations of a centralized government. However, as was seen by the Nazi regime, the centralized control is subject to corruption and extremism and was not accountable to the people or the greater long-term good.
We haven’t mentioned monarchies, theocracies, or a number of other systems, but they are mostly variations on the themes already discussed where political power and economic control are centralized or decentralized, and whether capital is individually or collectively owned. For the ultimate purposes of this discussion, we can set them aside and not elaborate.
What was all that information about? I guess my thesis is this. In their pure, conceptual form, none of the systems discussed is inherently evil, despite what proponents tend to claim when talking about any system other than their own. All, if successfully implemented with the principles and visions of their central purpose, could result in healthy societies. On the other hand, each and every one breaks down when the interests of the individual person or sub-group tends to take priority over the good of the whole. An otherwise healthy capitalistic business society begins to cause more damage than good when it relies on unfair competition or the exploitation of labor or the environment to gain profit. When democratic elections become primarily influenced by political contributions or the pressure of special interest groups, true democratic representation is sabotaged. When the interests of the majority result in the suppression and oppression of the minority, the society is weakened and individual freedoms are made a mockery.
Since every system can be corrupted and all are potentially successful, which do I support? I am, in my heart of hearts, an American. Short of God coming to earth and setting up a theocratic political government with all things held in common for the good of all, I feel that representative democracy based on constitutional law is the best form of government. And capitalism, tempered by government regulation and supplemented by social security for those unable to contribute to the economy, is our best hope to alleviate the excesses of poverty while proportionally rewarding the contribution of individuals and groups to the economic benefit of society. I just wish we could find a way to do it without all the commercials!
And finally, it is my firm belief that our society and economy will succeed or fail not on the system we choose, the party we elect, or how well we are represented, but on the character of our people and their willingness to put aside their self interest and think and act for the good of society and the world we live in. The reality is that in a representative democracy, our government will always be but a mirror of our society and can never long rise above or below the intentions, actions, and morality of the society it represents. There will be leaders who are corrupt, and others that temporarily rise above the society that elects them, but in the long run, our government will always give us exactly what we deserve. I have seen the enemy. I have seen the temporal savior. And, they are us.
I am not an expert on political systems or economic theories. I’ve taken the classes and learned some definitions of terms, but frankly I wonder if even academia has come to ground on what we really mean when talk about such labels as communism, socialism, fascism, democracy, etc. For the purpose of this blog, I will assume not and give myself license to express the concepts and label my opinions valid, albeit not authoritative.
Let’s start with making some distinctions. Some labels refer to political systems, or how a group governs itself. Other labels refer to economic systems, or general rules about how commerce is enacted. Some labels bleed over into both categories.
Let’s start off with capitalism: Capitalism is an economic model that assumes commerce is self governing. Production and distribution are motivated primarily by profit. It is regulated by competition, the idea that if you don’t produce the best value, that somebody else will. The decision on what to make and how much can be charged for it are based on what the business organization expects to get as a return on the invested capital. Capital refers to the resources put into production and distribution and may refer to buildings, equipment, money, the cost of labor, etc. In short, it is a system that is governed by projected profits hoped for from the capital put into the system. Government’s role, if any, may be in regulating its excesses.
The promoted strengths of capitalism are that it rewards initiative, that competition encourages efficiency and creativity, and that it increases the value for the consumer. It is also the claimed that capitalism is most conducive to sustainability and growth. In other words, as business organizations are more successful, they return more capital into the economy in the form of wages and shared profits, which in turn increases the consumer’s capacity to spend more on consumables, thus creating an upward spiral in the economic standard of living.
The weaknesses are that capitalism’s self regulations either don’t happen or are damaging to the shared priorities of societies. For instance, if the desire to decrease costs and increase profits results in a company choosing to use child labor, or pollute the environment, there is nobody to discipline the company on behalf of the public good. Along the same lines, the spiral of prosperity created by capitalism can break down. If a few companies, for many possible reasons, are forced to cut back on their investments or workforce then profits stop flowing into the system. The reduction in wages and shared profits result in fewer consumer dollars being available and other companies can’t sell as much. Soon the upward spiral goes downward, throwing the economy into a recession. It was once thought that such downturns were normal and would always be short lived. The Depression of the 1930’s proved that wrong. Today’s financial crisis is again challenging the system.
What about communism? Communism is both an economic and political concept. It assumes that all capital is owned by the group and not individually. Individuals donate their labor and resources and receive an equal share of the production results. All suffer or prosper together based on the results of their common labor. In terms of politics, political decisions are made by consensus of the group and in theory at the most local level possible. Representative councils act on the desires of the whole when direct decision making of the group is impracticable. In short, groups act for themselves in governing and economic production for the benefit of the whole.
In theory, the strength of communism is that it creates a more equal society rather than having class structures based on the accumulation of wealth or aristocratic background. One part of the population does not oppress or take advantage of another as all actions seek to be for the good of the whole. Power is decentralized so that all can share in self government. Economically, wealth is shared by all, eliminating pockets of poverty and economic injustice.
In my opinion, the primary weakness of communism lies in its flawed assessment of human character. The majority of people, over time, have never been able to set aside personal good for the good of the whole. Marx predicted that a centralized government must exist for a time until the population was organized into a communistic model. However, once in power, the great revolutionists of the communist movement, whether Lenin, Mao, or others, chose to keep the power centralized and even enhance it, always using the excuse that they were implementing the ideals of the revolution. In reality, they were just craving, and usually abusing, power. On a more local and individual level, people seldom view their individual contribution as equal and therefore resent the equal distribution of results. And certainly it is true that some work harder than others. And how do you value in economic terms different types of work? How could the pride of the skilled worker allow him or her to take equal profit with the unskilled common laborer? What is the incentive to be more skilled, efficient, or productive? Hence, basic human character, which is usually self serving and competitive, cannot long devote itself to the good of society without some other motivation to do so.
Since the two are often confused and even used interchangeably, let us make some distinctions about socialism. Like communism, socialism is both a political and economic approach. Like communism, socialism claims it works for the good of the whole and for the equalization of society. And, it is true that most self-labeled communistic governments were really just socialistic governments. So, what is the difference? The primary difference lies in the centralization of decision making and ownership of capital. In a socialistic government, centralized ruling bodies sometimes called committees or bureaus, make decisions on economic and political matters. Some responsibilities are delegated to more local committees, but decisions remain under central oversight. All means of production are governed by the central government. Production is controlled by mandated quotas and the allocation of resources. Workers may be paid in rations or coupons which allow them to access products. In short, the centralized government controls economic and political life and acts for the good of the society.
The strength of socialism, again in theory, is that centralized control tends to be more responsive and efficient than decentralized control. Centralized governments acts for the good of society and is able to do so from a bigger-picture perspective. Trained and experienced decision makers are more likely to make successful decisions and can be more responsive to changing societal needs, economic or otherwise.
The primary weakness of the system is that centralized power tends to be corrupt and act more for its enhancement than for the good of the whole. And, as with communism, there is little incentive for individuals to act for the good of the whole or to improve their circumstances through enhanced skills or hard work. In the end, socialistic systems tend to collapse under the own weight or resort to maintaining power through force, intimidation, and increased control.
Let’s talk about democracy. Democracy is a political vs. an economic concept. In its pure form, democracy means that all political decisions are made by the vote of the majority of those governed. Since all people can’t realistically vote on every decision, at least above a very local level, most democracies are representative democracies or republics. In republics, the people elect representatives who then govern on behalf of those who elected them. Government officials are appointed or elected for a short time and then are subject to another vote or appointment if they are to stay in office. A republic attempts to keep the idea of democracy in a more efficient and manageable decision making structure. As long as leaders are subject to re-election, they are thought to be accountable and responsible to those they represent. In addition, republics tend to describe themselves as governed by laws. This means that actions by the government are based on laws which limit or allow specific decisions or actions. In the United States, a portion of the government makes and modifies the law, the congress, while the executive branch, the president and corresponding bureaucracy, enforce the laws. Most Western democracies are similar, although they differ in how easily the laws can be changed and in how much authority the executive is given to act outside the laws.
The strengths of a democracy are that it is accountable to the people, while still achieving some efficiencies and responsiveness. The rule of law seeks to ensure individual liberties and limits the government’s power. Through the election process and communication with their representatives, all citizens can be involved in the government. Centralized power is limited through law, term limits, and political checks and balances.
Among the weaknesses of democracy are that it is limited in efficiency and responsiveness. Decisions usually take a long time due to debate and controversy. Some would say this is also a strength, and so it is, but it is a two edged sword at times. Democracies sometimes act in short-term vs. long term perspectives. The need to retain power when subject to re-election or recall, encourages representatives to make decisions which are good for today, but maybe not good for tomorrow. Democracies, to work, require an informed and involved populace. To the degree citizens do not stay informed and involved; the democracy can fall under the control of special interest groups which polarize action away from the good of society to the good of smaller groups. Finally, since government is by the majority, individual or groups with minority views or backgrounds can be subject to suppression by the majority, thus creating classes of unrepresented individuals and groups. Examples of this in include black slavery and the disenfranchisement or persecution of Native Americans, Hispanic Americans, and some immigrant races, nationalities, or religious groups—not to mention gender.
So what do we have left? I think I mentioned fascism, but I won’t spend much time on it. In a nutshell, fascism is a social and economic system where the ownership of capital is kept private, but which is highly regulated and controlled by a centralized government. As a sort of combination of socialistic government and capitalistic economy, some have suggested fascism could be a highly successful system since it retains many of the advantages of competition that capitalism has, while retaining the long term goals and regulations of a centralized government. However, as was seen by the Nazi regime, the centralized control is subject to corruption and extremism and was not accountable to the people or the greater long-term good.
We haven’t mentioned monarchies, theocracies, or a number of other systems, but they are mostly variations on the themes already discussed where political power and economic control are centralized or decentralized, and whether capital is individually or collectively owned. For the ultimate purposes of this discussion, we can set them aside and not elaborate.
What was all that information about? I guess my thesis is this. In their pure, conceptual form, none of the systems discussed is inherently evil, despite what proponents tend to claim when talking about any system other than their own. All, if successfully implemented with the principles and visions of their central purpose, could result in healthy societies. On the other hand, each and every one breaks down when the interests of the individual person or sub-group tends to take priority over the good of the whole. An otherwise healthy capitalistic business society begins to cause more damage than good when it relies on unfair competition or the exploitation of labor or the environment to gain profit. When democratic elections become primarily influenced by political contributions or the pressure of special interest groups, true democratic representation is sabotaged. When the interests of the majority result in the suppression and oppression of the minority, the society is weakened and individual freedoms are made a mockery.
Since every system can be corrupted and all are potentially successful, which do I support? I am, in my heart of hearts, an American. Short of God coming to earth and setting up a theocratic political government with all things held in common for the good of all, I feel that representative democracy based on constitutional law is the best form of government. And capitalism, tempered by government regulation and supplemented by social security for those unable to contribute to the economy, is our best hope to alleviate the excesses of poverty while proportionally rewarding the contribution of individuals and groups to the economic benefit of society. I just wish we could find a way to do it without all the commercials!
And finally, it is my firm belief that our society and economy will succeed or fail not on the system we choose, the party we elect, or how well we are represented, but on the character of our people and their willingness to put aside their self interest and think and act for the good of society and the world we live in. The reality is that in a representative democracy, our government will always be but a mirror of our society and can never long rise above or below the intentions, actions, and morality of the society it represents. There will be leaders who are corrupt, and others that temporarily rise above the society that elects them, but in the long run, our government will always give us exactly what we deserve. I have seen the enemy. I have seen the temporal savior. And, they are us.
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