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Capitalism vs. Communism - Face Off
By Don Newman, 6/6/2003 12:20:16 AM

What is the true defining difference between capitalism and socialism? Ever ponder that question? The answer might surprise you.

Before going any further it is necessary to be very clear about the definitions concerning the concepts involved. Clarity of definition assures that the issues and conclusions drawn are clear as well. The underlying philosophies of each system inferred from these definitions can then be made equally clear as well. Therein lies the answer to the question posed.

Capitalism is when individuals own businesses, stores, companies, factories and corporations. These individuals, as owners, are by necessity responsible to make decisions in order for their businesses to be successful. There is no escaping this responsibility, reality imposes it. If one doesn't accept, and fulfill, that responsibility the business will fail.

Communism, in its pure form, is government ownership of everything. In this regard it owns all the businesses, stores and companies that are owned by individuals in capitalism. This creates the first fallacy of communism, since governments cannot make decisions, only individuals or groups of individuals, yet the responsibility is nominally placed in the collective of government. Thus, ultimately, no one is responsible for any failure.

Socialism is the intermediate range between capitalism and communism. It is an ever shifting line of demarcation between complete individual ownership and complete government ownership. Socialism is the bastard child of communism, which cannot overturn capitalism directly, so must do so by the incremental stages of socialism. Each step is designed to wrest control from individuals and give more control to government. The eventual goal being complete control, therefore ownership, by government.

The first thing that can be seen from these definitions is that socialism is not a pure system, it is a mixture. It is the area of compromise between the two antagonistic systems. This is why, in most negotiations of public policy, socialism makes gains while capitalism loses. Socialism IS compromise, which always seeks to negotiate from its last winning position.

A perfect example in this regard is the minimum wage. Once the principle is established that a minimum wage is good policy, which it in fact isn't, then it simply becomes a matter of continually raising the wage floor. The minimum wage is never lowered, no matter how inflationary it is, or whether actual economic conditions, such as a depression, necessitates it. Once having won a certain position, socialism takes that position as normative, as its new fundamental bargaining point.

This is true across the board for all socialist policies. It is very difficult to roll back or repeal any such policy once it has been instituted. Occasionally, as in the case of the Ronald Reagan tax cuts, such policies are rolled back, but not without tremendous objection. But even now, decades later, socialists still question the rightness and the value of those tax cuts. They still continually complain about this rollback as if such confiscatory tax rates are the unquestioned norm, that capitalism is inherently wrong.

This has been a very effective tactic. Not a day goes by where some liberal media pundit doesn't blast the idea of making a profit, the ruling principle of capitalism. The very idea that individuals are in business to make money, make a profit, and become wealthy is continually denigrated. Thus the idea of a progressive income tax that punitively taxes one the wealthier that person happens to be, is lauded as an enlightened position. And the wails of consternation at the idea of a reduction of income tax by a mere 1 percent, the effective rate of change of the Bush tax cut, is taken for granted as morally correct.

It is this premise, that socialism is actually a proper value system and that socialism is morally superior to capitalism, that is the philosophical standpoint that gives socialism its strength. It is precisely these philosophical underpinnings that most people never examine, don't even realize exist, and never even think to challenge. Thus they adopt a viewpoint, because it has been taught in schools and universities, repeated by legislators, representatives, news reporters, religious leaders and political pundits, that incorporates a philosophical viewpoint that is antithetical to the very values this nation was founded upon.

Socialism propagates by slogans that articulate this philosophy without stating it directly. If stated outright it would be rejected, since very few people really want complete government control of everything. Thus the incremental approach via cultural change by use of slogans. Which is the state of things today. Many people have incorporated the values of socialism in their everyday views, without realizing that have embraced a whole political philosophy unexamined. They repeat the platitudes of socialism without knowing the source of their utterances.

This is the liberal viewpoint as it is expressed today in politics and popular culture. It is the reason that so many people are taking glee in the recent misfortunes of Martha Stewart, for example. These people have adopted the idea that there is something wrong with being a successful capitalist. The envy these people have for Martha's position is justified by socialist ideology. The idea that any one person could be so successful without exploiting someone else is a socialist cliché.

That Martha Stewart herself has been a loyal Democrat contributor shows the degree to which these ideas permeate contemporary culture. Socialism has so great an influence that even Martha, who knows what it takes to build such an empire, feels some level of guilt for her success. Therefore she contributes to the party that actually seeks to relieve her of as much wealth as possible. She has unconsciously bought into the socialist paradigm. The same could be said of Bill Gates.

The arguments for universal medical care are based upon the idea that the government should provide for various human needs. This is shifting the arena of responsibility from the personal to the government. This nation has progressed from Social Security, to Medicare and Medicaid, to welfare and is now on the brink of considering universal health care. Several Democrat presidential candidates are saying this will be the major issue in the next election. This despite the terrible level of care in nations such as Canada and Great Britain that have instituted such systems.

Whether or not the Democrats succeed doesn't matter. President Bush recently proposed an increased senior prescription drug benefit. It is another example of one more incremental step in the increase of socialism in this country. It is also an example of how the socialist paradigm has come to dominate politics and political philosophy. Even Republicans consider such programs valid, even though these programs stand in opposition to the principles of capitalism. This is because the actual philosophical underpinnings are taken for granted, and never examined, not even by most Republicans. Socialism has established a norm for both parties.

In order to generate the funds necessary to institute socialist programs, government must seize some portion of the productive effort of those who seek to improve their condition through free enterprise. Therefore, until this nation reaches the point where government owns everything, capitalists are the only means by which government can get money to fund socialist programs. Thus, socialism is dependent upon capitalism for its existence.

Yet the obverse is not true, capitalism doesn't need socialism for its existence. In fact, the less socialism there is, the more efficient capitalism becomes. The more people understand from the start that they are completely responsible for themselves, the more they will understand they must make proper efforts to have fruitful and productive lives. Capitalism frees people because it affirms the power that people have over their own lives. Socialism gives that power to government, but requires capitalism to implement it.

This then is the answer to the question posed at the opening. The true defining difference between socialism and capitalism is that socialism needs capitalism to exist, but capitalism doesn't need socialism at all. Socialism is a parasite that must get its sustenance from capitalism, while capitalism is only damaged and diminished by socialism. Capitalism requires personal responsibility and socialism destroys it.

This is the crucial issue. Capitalism is personal choice, personal effort, personal responsibility. Socialism is the agency of government seizing the fruits of capitalism, to give to those who have abandoned that responsibility in favor of government. Thus the question comes down to a personal decision. Either you, the reader, want to control your own life, or you want government to do it for you. If you don't want to control your own life, what right do you have to complain about the result?

Don Newman, a free-lance writer living in Honolulu, can be reached via email at: mailto:newmand001@hawaii.rr.com


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