In Part 1 we discussed how important it is to be able to define a term. This is really for two reasons:
- So you truly understand it yourself. You’d be surprised how many people tell me they are absolutely, totally and undeniably against Socialism . . . and then in the next sentence tell me their socialistic program that is going to fix our country.
- So you can logically discuss an issue with another person. If the two of you are discussing a certain concept — such as the one in this article — which you both define in different ways (without each other knowing it) than there is simply no way you can ever come to a legitimate agreement.
Remember the phrase, “Even the most logical argument — if based on a false premise — can never lead to a correct conclusion.”
And a correct premise begins with a correct definition.
So, let’s define Capitalism and Socialism:
Capitalism: An economic system in which land, labor, capital and other resources are owned, operated and traded by private individuals as opposed to through government control and/or central economic planning. Property is privately owned and goods are privately produced. Also referred as the Free Enterprise System. The individual has all rights to his/her possessions.
Socialism: An economic system in which labor, capital and other resources are owned, operated and traded by a central government and/or central economic planning as opposed to private individuals. Property is publicly owned (italics Burg’s) and goods are publicly produced. The individual has no rights to any possessions because he/she doesn’t actually own anything.
The italic is because “publicly owned” means the government actually owns and controls it 100 percent. The “public” (individuals who supposedly are the owners) have no say in the matter in any way, shape or form.
*Before we go on, please recall the fact from Part One of this series that the U.S., while at one time relatively close to being a pure capitalist society, is no longer such.
Let’s now look at the defining characteristics of each of these terms:
- Voluntary trade as opposed to force. Business can only take place through cooperation since, in a truly capitalistic society, one person cannot be forced to buy from another.
- Value rules. If the seller does not provide an equal or greater amount of value than the financial cost of whatever he or she is selling, the prospect probably will not buy.
- Businesses will be rewarded (by the consumer) for doing things right and punished (by the consumer) for doing things wrong.
- Government’s only legitimate functions are to protect the citizenry against force and fraud.
- Force as opposed to cooperation. Since the government controls everything, they decide who buys from whom, what they buy, what they pay, etc.
- Value is . . . well, not valued. It’s not important for a producer to focus on providing value when it’s not up to the consumer as to what they can or cannot consume.
- Business will typically not be rewarded or punished by consumers; they will be dealt with by bureaucrats and politicians however they see fit. Good for the consumer and good for bureaucrats/politicians are not necessarily the same thing.
- Government’s legitimate function is . . . everything. This, of course, probably means they are good at very little . . . except using force to keep the people in line.
- In truly capitalistic societies the standard of living is far better for the masses. The poorest in a capitalistic society is considerably better off than their counterparts in socialistic societies.
- There is a much larger middle class in a capitalistic society than in socialistic societies, where there tends to be, percentage-wise, a tiny amount of extremely wealthy people, a larger but still small middle class, and a huge amount of poor and desperately poor. (Unfortunately, this is exactly where our increasingly socialist society appears to be taking us.)
The key point — THE premise: Capitalism is based on cooperation while Socialism is based on force.
Sub-point — Any program (via legislation) that results in one person being forced to give up what he or she has earned in order to hand it to a centralized government which then re-distributes it to another is a socialistic program. Let’s not discuss here whether that is good or bad; let’s just agree that that is what it is, according to what you have read above.
In Part 3 we’ll look a bit deeper into this and see where some dangerous misunderstandings about these two concepts come into play.