The problem with capitalism is that bad people are motivated to do bad things to good people while seeking profits and power for themselves. Of course, this has been a problem with every system of organizing civilization in the history of mankind. It is not a problem that can be solved by perfecting mankind. We will always be imperfect. Solzhenitsyn perhaps expressed it best: “The line dividing good and evil cuts through the heart of every human being.”
This is not a problem that can be solved by re-dividing profits. Those who produce profits would have less incentive to produce. Those who buy the fruits of production would have less to buy, less to buy with, and less to say about what is produced. All would be poorer, except those who decide how the profits are re-divided; they inevitably keep a little extra for themselves. If we look at experience, people do not get just a little poorer. Per capita income in Russia is 40% of that in the US. In China and Venezuela per capita income is less than one-third of that in the US. Data from Cuba and North Korea would surely be even worse if it were published. Many in the “Middle Class” in these countries live in poverty by US norms. There is no country in the world, Socialist or otherwise, that spends more than the United States to lift up the less fortunate among us because there is no country productive and generous enough to do so. The productivity and wealth results from a vibrant free-market economy. The generosity comes from the hearts of a free people.
There are only two means to limit the misuse of power. One is Freedom and the other is Law. Neither can survive without the other. Freedom by definition means the distribution of power to the people. It means making every individual responsible for his or her own pursuit of happiness. It means protection not of just the right to vote, but the protection of all the rights guaranteed in our Constitution. Preservation of Freedom requires that power be distributed among all people so that none are strong enough to seize or abuse the power of others. Law is the means of protecting Freedom from being abused. Law limits behavior uniformly among all people without limiting thoughts or ideas. Our founders recognized that if laws are to be applied equally to all, the legislators who make the laws and the prosecutors and the judiciary must be independent of each other. If these three powers are centralized, then law is whatever that central power says it is to any particular person at any particular moment, without any appeal. This is how laws work in Russia, China, Iran, Venezuela, North Korea, and Cuba today. This is how laws worked in Russia, Germany, Italy, and Japan before and during World War II. When all the power of government is centralized in the administrative bureaucracy, the result is laws without Law. The result is that all freedom is at the pleasure of the State; all property is private only at the pleasure of the State. The result is that there is no real power or freedom among the people. This is the definition of Socialism. Socialism always promises “Power to the people!” but it always delivers power only to people in control of the State.
It is possible to have State Capitalism. That is Socialism. That is Russia and China. The State controls all property. It is delusional to compare free-market Capitalism with Socialism. They are diametrical opposites. In the United States, government power is shared among three branches and fifty states. Economic power is shared by tens of thousands of corporations each competing for the approval of, and thus governed by, more than three hundred million customers. It is very messy, in a challenging and creative way. In Socialist nations people who defy the government disappear. That is quite efficient, in a very ugly way.
Those who compare Socialism to Capitalism do so either from naiveté or to deceive. Socialism is not an antidote or opposite to Capitalism. It is an opposite and antidote to Freedom and Democracy. Democracy vs. Socialism is a choice. “Democratic Socialism” is an absurd contradiction, an oxymoron. Freedom, especially free-markets, cannot co-exist with Socialism. Without freedom, Democracy is a sham.
Michael Moffitt
February 2020