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Socialism emerged from the French Revolution
as a powerful political force to serve the dispossessed.
In 20th Century US, while limited
compared to Western Europe.
socialism became part of a
mixed economy until the 1980s Conservative Revolution,
when socialism became synonymous with Communism.
Today, while accounting for a vast amount of
government spending.
With many satisfied customers- social security, which includes young families,
defense, which control the world, and the world's best safety net.
Yet,
socialism is still thought of as sinful by many, especially older, Americans.
Economic
Systems
Attempt to Solve
the Scarcity Problem
In the Beginning
Socialism is a
moral movement of intellectuals who loathed inequality,
despised the intellectual shallowness of the rich, and
sought to bring
life to their visions.
Capitalism is not especially
intellectual or
moral,
it is a reality of the industrial revolution.
Socialist imagined a socialist
utopian system.
Socialist believe political equality requires wealth equality.
Production is for the common good.
Some felt private control of
investment flawed capitalism
as wealth creation went to the rich who reinvesting for
their
highest capital return. This meant that low return of social
goods
were neglected. Socialist believe this limited
human possibilities.
The public, using
a democratic process, controls the state.
States
should determine investment goals and resulting
strategy.
This is accomplished by controlling
property and investment capital.
Production will be for
the common good and not for state officials.
Recent Application
Democratic Socialism
developed after WW
in war torn Western Europe. The key
characteristics were
public ownership of key
transportation and communication
industries. It also has showed increased concerns
and spent additional resources to help the
disadvantaged.
Note: Neoliberal economics was used by England's Margaret Thatcher in 1979 to dismantled England's brand of Socialism. She was followed, in much of Europe. In 1981, President Ronald Reagan followed her policies to reverse the social and regulatory concessions being won, often over the object of the Supreme Court. The expensive socialist programs of SS Medicare/Medicate and tax-expenditures were not only not touched- they were expanded.
Note: 19th Century Capitalism
wealth
was managed by owners wanting the highest capital return.
They neglected the low return of social
goods. Democratic Socialist believe this limited
human possibilities.
Classical Capitalism
has
individual ownership of economic factors of
production with
free competitive markets
distribution
of resulting production.
Recent Application
Mixed Economy developed in the United States
in the
late 19th century. Being a Republic, the people decided the economic
the distribution of wealth.
Phase 1 had the people slowly took
more control value created by demanding health,
safety and wage concession from Gilded Age capitalists.
Phase 2 was a response to the Great
Depression. FDR
forced
a public/private partnership to help the unemployed-farmers,
began the regulation of banking-finance, and
created a safety net system led by social security.
Phase 3 had LBJ adding to Medicare
and Medicaid.
Neoliberal economists led the fight to remove many the mixed economy regulations designed to limit middle class suffering and they also cut back on safety net programs. These attempts failed and the Great Recession may begin a new phase.
It was
a reality emerging with
the Industrial Revolution.
It required investment and the reinvested of profit.
Its wealth creation soon dwarf that of European aristocracy.
Unlike socialism, capitalist did not contemplate
the virtue of wealth or the effects of industrialism on
the human condition.
Not an ideology, intellectuals did not defend it until
the 20th century
when Hayek and Friedman, among others, sought did so.
Capitalism explainer Adam Smith wrote “The Wealth of Nations.” It described how individual decisions, driven by self-interest, would culminate in an increased wealth of nations. In “The Theory of Moral Sentiments,” Smith argument that moral development resulted from appropriate management.
Capitalism maximized wealth, it did not limit inequality.
Capitalists creates wealth for a few, allowing
much suffering.
Capitalist
investments comes
from diversified investor decisions.
This limits
the consequences and magnitude of poor decisions.
Capital devastation, not annihilation is the worst
possible result.
Protecting the investment process allows recoveries from
devastation.
Socialism places confidence
in public control of the state because
they public understands needs, but they are not sensitive to
cost.
Reallocation of capital investment to the state
would eases suffering
The state is an abstraction so decisions are made by
state officials.
Civil servants or elected representatives having no
vested interest,
would
make the good democratically approved public good investments.
Having minimal power and
unbound by
self-interest, they can
take the place of self-interested capitalistic
investors.
Democracy
is a difficult fit for Pure Socialism
It evolves toward a Soviet
direction or
toward the oft-cited Swedish model which
allows private investment
while transferring tax money
to the state for the public good.
The Soviets
managed most civil servants with terror.
Sweden's
democratic process manages the desire
for increased social benefits with the need to maximize
production resulting from private capital investment.
Diversified Investors
Protects Capital
from making
continuing poor decisions.
When inefficiencies occur and
affected industries
adjust or lose to new efficient
ones.
Joseph Schumpeter called this “creative
destruction.”
This efficiency may generate a rapid,
intense crises,
which may lead to social unrest, chaos,
and repression.
Will Politics continue to protect top 0.1%
Abolishing Greed and
State
Minimization fantasies aside,
the two systems have more or
less merged.
Capitalists and socialists
both accept private
investment.
Both expect economic growth and more taxes paid.
Both capitalism and social democracy
imposed taxes to cushion crisis dislocations.
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Both Have Unhappy Voters Regardless of system, paying taxes is hated and
receiving benefits loved. Politician differ on taxes and purpose but
fearing anarchy, must balance the system. Democratic socialism now a Democratic Party consideration. Why? |
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Donald Trump won the votes
of a dissatisfied
industrial workforce.
Discussion of socialism indicates a commitment to
unspecified radical change. The debate is functionally archaic.
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Quarrel between a Federalist and a Republican in the House of Representatives Foreign influence on Domestic Politics Click to enlarge cartoon. |
