Socialism vs Capitalism

I recently asked a friend if he could think of 5 reasons why socialism was better than capitalism. He replied as follows:
  1. Socialism is by far the world’s most successful idea. [Socialist] governments everywhere out-perform all other organisations (churches, clubs, co-ops, companies, partnership, owner-enterprises, traditional communities etc) by a massive margin judged according to all standard criteria for success. They are bigger, grow faster, employ more people, have more powerful, popular and influential leaders, accumulate more capital, never go under (regardless of how good or bad current managers are), generate more money etc etc.
  2. That’s more than 5, but there’s more. They treat more patients, make more roads, give more housing to the homeless, teach more kids (after a fashion) and settle more legal disputes.
  3. More than 5 again, and there’s still more: Socialism does more for ‘creative’ arts, funds more research-as-an-end-in-itself, employs more academics, especially in social science and divinity, and supports more expeditions to weird places.
  4. And there’s more and more and more. By far the most impressive thing about socialism, what it does better than capitalism with by far the biggest margin, is generate revenue. As if that’s not sufficient for a fatal knock-out blow against capitalism, it manages to do so despite providing notoriously shoddy service. It’s better without limit.
  5. Small wonder 80% of the public vote for it (to a greater or lesser extent) and idolise its leaders.
Socialism is a truly awesome system. It beats capitalism hands down, no contest. The really tough question is whether you can think of 5 things capitalism does better than socialism.
I responded as follows:
1. Capitalism is honest.
2. Capitalism is moral.
3. Capitalism reflects reality.
4. Capitalism is consistent.
5. Capitalism is efficient.
All these propositions are intertwined, as such value statements invariably are. I guess they could all be summarised in the single statement that Capitalism is moral, but morality is a minefield.
I justify these statements as follows:
  1. Honesty. Unlike socialism, capitalism does not make promises that its adherents know cannot be fulfilled. It does not (or should not) promise universal wealth, happiness and fulfillment. It does not even promise fairness, or sympathy, or mercy, or forgiveness. It promises only the iron rule of the market. You will be rewarded only to the degree to which you provide a service to others. Effort, intention, beauty, genius are no guarantee of success. Poverty, need, desire, tragedy are no guarantee of support. Laziness, stupidity, greed are no guarantee of failure. Provide a desirable product or service, and you will prosper. Fail to do so, and you may perish. No wonder capitalism is a hard sell.
  2. Morality. If you define morality as respect for life and property and contract and freedom of choice, then capitalism is moral, and socialism is immoral. Capitalism does not require human sacrifices, nor does it require theft, nor does it require coercion. Each human being is treated as a sacred individual. No demand is made against any individual for any greater good. Goods are always to be exchanged with mutual consent. An individual’s choice is never constrained by another, but only by circumstances. The fact that capitalist morality results in service to others, prosperity for many, resources for the suffering, education for the masses, these are all indirect consequences of a particular world view. The fact that capitalist morality results in vast concentrations of wealth, in huge disparities between rich and poor, in the abject failure of those unwilling or unable to provide a useful service, these are also indirect consequences of this particular world view. All systems have benefits and costs. However, only some are moral.If you define morality as fairness, equity, safety, protection of the weak, community before individual interests, then capitalism is not moral, but socialism is. However, this socialist morality and the capitalist morality are incompatible. The socialist morality cannot be achieved without sacrificing the fundamental tenets of the capitalist world view. But the capitalist morality is not incompatible with the socialist morality, it just does not demand it. Capitalist individuals may choose to promote fairness, equity, community, using their own resources, without ever coming into conflict with their basic capitalist principles, while socialists cannot.
  3. Reality. People seek their own interests first. With very few exceptions, this is the reality. Then they seek the interests of their family, their local community, their country, and finally, the interests of the broader humanity. Socialism attempts to reverse this order. It is unrealistic, and it predictably fails to change human nature.
  4. Consistent. Capitalism does not ask one thing of some people, and a different thing of others. It does not have one rule for when you are poor, and another for when you are rich. It does not require any judgements as to who are poor, or in need, or more deserving, and another set of judgements as to who are rich, who must sacrifice their lives and property for others. Capitalism asks only that you respect the life, property and choices of others, and the contracts you make with them. It is silent on everything else.
  5. Efficient. Individuals disposing of their own resources tend to do so more efficiently than individuals or groups disposing of the resources of others. This is a reality. This reality leads to a more efficient use of resources generally, and the consequent prosperity of associated communities. Prosperous communities tend to have more resources available for activities like charity, education, healthcare, the arts, etc. They also tend to have more resources available for pleasure and thrill seeking, mindless entertainment, habitat destruction, etc. Capitalism has nothing to say about how the benefits of its greater efficiency may ultimately be used.
None of the above guarantees the success of capitalism as a world view. It is based on the primacy of the individual – by definition the least powerful component of any society. It is easily overwhelmed by larger groups with a common purpose. It requires the constant agreement of all participants to abide by a common set of rules. It is easily undermined by unscrupulous people involved in secret agreements. It is hardly ever allowed to flourish in its purest form.
So capitalism remains an ideal to strive towards, a better way for men and women to live together. Despite the many successes you list for socialism, capitalism is RIGHT.
I also believe that the efficiency of capitalism is not its greatest virtue. Many other systems are as efficient, or more so, such as an autocracy. Even socialism accomplishes many of its more respectable objectives, as you describe, if at the expense of morality.
I believe that the advantage of capitalism is its honesty, integrity, realism, and consistency. That is how we should sell it.

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  1. #1 by Stephan on October 26, 2010 - 2:59 pm

    Sure we should discuss isms more (monarchy is another ism which deserves more inspection)…but sometimes it feels to me that we dont have time for this. Lets just convert the world NOW.

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