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Socialism vs. Capitalism: Which is the Moral System?
On Principle, Vol. 1, No. 3

by: C. Bradley Thompson

Throughout history there have been two basic forms of social organization: collectivism and individualism. In the twentieth-century collectivism has taken many forms: socialism, fascism,
nazism, welfare-statism and communism are its more notable variations. The only social system commensurate with individualism is laissez-faire capitalism.
The extraordinary level of material prosperity achieved by the capitalist system over the course of the last two-hundred years is a matter of historical record. But very few people are willing to defend capitalism as morally uplifting.
It is fashionable among college professors, journalists, and politicians these days to sneer at the free-enterprise system. They tell us that capitalism is base, callous, exploitative, dehumanizing, alienating, and ultimately enslaving.
The intellectuals' mantra runs something like this: In theory socialism is the morally superior social system despite its dismal record of failure in the real world. Capitalism, by contrast, is a morally
bankrupt system despite the extraordinary prosperity it has created. In other words, capitalism at best, can only be defended on pragmatic grounds. We tolerate it because it works.
Under socialism a ruling class of intellectuals, bureaucrats and social planners decide what people want or what is good for society and then use the coercive power of the State to regulate, tax, and redistribute the wealth of those who work for a living. In other words, socialism is a form of legalized theft.
The morality of socialism can be summed-up in two words: envy and self-sacrifice. Envy is the desire to not only possess another's wealth but also the desire to see another's wealth lowered to the level of one's own. Socialism's teaching on self-sacrifice was nicely summarized by two of its greatest defenders, Hermann Goering and Benito Mussolini. The highest principle of Nazism (National Socialism), said Goering, is: "Common good comes before private good." Fascism, said
Mussolini, is "a life in which the individual, through the sacrifice of his own private interests, realizes that completely spiritual existence in which his value as a man lies."
Socialism is the social system which institutionalizes envy and self-sacrifice: It is the social system which uses compulsion and the organized violence of the State to expropriate wealth from the producer class for its redistribution to the parasitical class.
Despite the intellectuals' psychotic hatred of capitalism, it is the only moral and just social system.
Capitalism is the only moral system because it requires human beings to deal with one another as traders--that is, as free moral agents trading and selling goods and services on the basis of mutual consent.
Capitalism is the only just system because the sole criterion that determines the value of thing exchanged is the free, voluntary, universal judgment of the consumer. Coercion and fraud are anathema to the free-market system.
It is both moral and just because the degree to which man rises or falls in society is determined by the degree to which he uses his mind. Capitalism is the only social system that rewards merit, ability and achievement, regardless of one's birth or station in life.
Yes, there are winners and losers in capitalism. The winners are those who are honest, industrious, thoughtful, prudent, frugal, responsible, disciplined, and efficient. The losers are those who are shiftless, lazy, imprudent, extravagant, negligent, impractical, and inefficient. [What about the role of luck being in the right place at the right time or the wrong place at the wrong time? R. R. Pope}
Capitalism is the only social system that rewards virtue and punishes vice. This applies to both the business executive and the carpenter, the lawyer and the factory worker.
But how does the entrepreneurial mind work? Have you ever wondered about the mental processes of the men and women who invented penicillin, the internal combustion engine, the airplane, the radio, the electric light, canned food, air conditioning, washing machines, dishwashers, computers, etc.?
What are the characteristics of the entrepreneur? The entrepreneur is that man or woman with unlimited drive, initiative, insight, energy, daring creativity, optimism and ingenuity. The entrepreneur is the man who sees in every field a potential garden, in every seed an apple. Wealth starts with ideas in people's heads.
The entrepreneur is therefore above all else a man of the mind. The entrepreneur is the man who is constantly thinking of new ways to improve the material or spiritual lives of the greatest number of people.
And what are the social and political conditions which encourage or inhibit the entrepreneurial mind? The free-enterprise system is not possible without the sanctity of private property, the freedom of contract, free trade and the rule of law.
But the one thing that the entrepreneur values over all others is freedom--the freedom to experiment, invent and produce. The one thing that the entrepreneur dreads is government intervention. Government taxation and regulation are the means by which social planners punish and restrict the man or woman of ideas.
Welfare, regulations, taxes, tariffs, minimum-wage laws are all immoral because they use the coercive power of the state to organize human choice and action; they're immoral because they inhibit or deny the freedom to choose how we live our lives; they're immoral because they deny our right to live as autonomous moral agents; and they're immoral because they deny our essential humanity. If you think this is hyperbole, stop paying your taxes for a year or two and see what happens.
The requirements for success in a free society demand that ordinary citizens order their lives in accordance with certain virtues--namely, rationality, independence, industriousness, prudence,
frugality, etc. In a free capitalist society individuals must choose for themselves how they will order their lives and the values they will pursue. Under socialism, most of life's decisions
are made for you.
Both socialism and capitalism have incentive programs. Under socialism there are built-in incentives to shirk responsibility. There is no reason to work harder than anyone else because the rewards are shared and therefore minimal to the hard-working individual; indeed, the incentive is to work less than others because the immediate loss is shared and therefore minimal to the
slacker.
Under capitalism, the incentive is to work harder because each producer will receive the total value of his production--the rewards are not shared. Simply put: socialism rewards sloth and penalizes hard work while capitalism rewards hard work and penalizes sloth.
According to socialist doctrine, there is a limited amount of wealth in the world that must be divided equally between all citizens. One person's gain under such a system is another's loss.
According to the capitalist teaching, wealth has an unlimited growth potential and the fruits of one's labor should be retained in whole by the producer. But unlike socialism, one person's gain is everybody's gain in the capitalist system. Wealth is distributed unequally but the ship of wealth rises for everyone.
Sadly, America is no longer a capitalist nation. We live under what is more properly called a mixed economy--that is, an economic system that permits private property, but only at the discretion of government planners. A little bit of capitalism and a little bit of socialism.
When government redistributes wealth through taxation, when it attempts to control and regulate business production and trade, who are the winners and losers? Under this kind of economy the winners and losers are reversed: the winners are those who scream the loudest for a handout and the losers are those quiet citizens who work hard and pay their taxes.
As a consequence of our sixty-year experiment with a mixed economy and the welfare state, America has created two new classes of citizens. The first is a debased class of dependents whose means of survival is contingent upon the forced expropriation of wealth from working citizens by a professional class of government social planners. The forgotten man and woman in all of this is the quiet, hardworking, law-abiding, taxpaying citizen who minds his or her own business but is forced to work for the government and their serfs.
The return of capitalism will not happen until there is a moral revolution in this country. We must rediscover and then teach our young the virtues associated with being free and independent citizens. Then and only then, will there be social justice in America.
C. Bradley Thompson is Assistant Professor of Political Science at Ashland University and Coordinator of Publications and Special Programs at the John M. Ashbrook Center for Public
Affairs.
http://lilt.ilstu.edu/rrpope/rrpopepwd/articles/socvcap.html
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Cursed

Biotic · Level 34: Masked Menace **Posts:** 8538 **Timestamp:** Mon Apr 28, 08 6:29 PM

Must. Show. This. To. My. Mother.
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Kennisiou · Level 21: Purple Prophecy **Posts:** 1541 **Timestamp:** Mon Apr 28, 08 6:41 PM

In capitalism, the winners are the lucky. The rich get rich because they've learned how to work the system. Capitalism is a system that works very well in theory, but in practice leads to large gaps between the upper and lower classes. Also, as Cursed pointed out, capitalism is all about who's going to buy the product, not about whether or not the product actually contributes anything to society. In unregulated capitalism, nobody would do medical research. Before government regulations of the medical industry, companies sold flavored water as a "miracle tonic to cure illness" (this is actually how Coca-Cola got its start). Even if someone actually did make a working medicine, other companies would immediately begin to produce generic versions of that medicine at lower prices (because they didn't have to do the invention, just the production) to destroy the competitors. Without our medical regulations, it would be a much more exploitive and unprofitable business. And, no, socialism is not better. It does not suffer from these problems, nor really from the problems you outlined, either, but instead tends to face different problems not on the production end but on the distribution end. Any well-informed economist will tell you that the greatest advantage of the capitalist system is how efficient a distributor of goods the price system is. A government cannot handle regulating both supply and demand. It just cannot be done. But in the price system the supply and demand ends will naturally work to regulate eachother in a way that a government cannot accomplish.

Capitalism regulated by a duly-elected government in an informed democracy is one of the best economic systems. What you call a "mixed-economy" is a basic term for what is essentially more complex. The economic theory behind the American's specific brand of mixed economy is called "regulated capitalism." It's what keeps kids from working in a factory. It's what keeps workers from dying in factory fires.

Also, I love your bit about incentives in socialism. There were case studies in Soviet Russia way back when. There were Americans living in Russia working in their semi-socialist-but-still-mostly-capitalist system, and the "socialist" Russians proved to be the most efficient workers despite their lack of "incentive." The drive for reciprocation for work done is, in fact, not a universal human norm: only a cultural norm of America and much of Europe.

Studies have shown that, when asked to do things, Americans and most Europeans base their decisions on "what's in it for me?" or "what's the guy who's asking me done for me recently? What will he do for me?" In Russia, the question asked was usually "what authority does this person have? Are they in charge of me?" Russians are more likely to do something just because "the boss said so" than because of what they'll get out of it. It's possible that this is still a lingering feeling from the soviet era, or it could be a societal norm that pre-dates it. Either way, it goes to show that either the desire for reciprocation can be overcome, or that it is not a universal human norm and only applies to our society. Also, it's interesting to note that Hispanic people operate more on the basis of "How friendly is this person with me?", Japanese people ask "is this person a part of my team/class/group of co-workers?", and Germans ask "what is the information that went into the making of this decision?", showing, basically, that Americans respect rewards, Russians respect authority, Hispanics respect friendship, Japanese respect group mentality, and Germans respect knowledge. This isn't a race thing, it's a culture thing. Russian-Americans still tend to act like Americans, just like Japanese-Hispanics still tend to act like Hispanics and German-Russians still tend to act like Russians.

I'm not saying that socialism is a great system. It's not, and it cannot work in a global economy. I am, however, saying that it does not "instantly fail" like you say it does, and that, when it does fail, it isn't for reasons as superficial as the ones you pointed out. You're doing the equivalent of passing out a poorly-xeroxed capitalism pamphlet. It looks stupid when the communists do it and it looks stupid when you do it, too.
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BigNig · Level 43: Monk **Posts:** 20801 **Timestamp:** Mon Apr 28, 08 6:50 PM

The Man · Level 24: Sore Fingers **Posts:** 2795 **Timestamp:** Mon Apr 28, 08 8:28 PM

In socialism a person with a great education and worked as hard as they could through school gets paid as much as a construction worker who dropped out of high school. nuff' said.

In capitalism you are completely free in the economy. If you work hard through high school and maybe college. You will do better than the lazy bum who dropped out of highschool and works at Mcdonalds. Bill gates earned his money. There was no luck in making a buisness and becoming rich. Most people fail when trying to make a buisness. It is education, and hard work that got them there. Something socialism would ruin.

Capitalism isn't flawless and sounds bad in theory. It is the only practical system there is though.
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Kennisiou · Level 21: Purple Prophecy **Posts:** 1541 **Timestamp:** Mon Apr 28, 08 8:43 PM

Biotic · Level 34: Masked Menace **Posts:** 8538 **Timestamp:** Mon Apr 28, 08 10:22 PM

Time for a debate. Yay. As usual I take no sides but still prefer my fellow conservative.

Very interesting rebuttal.
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Cursed

To be fair, Nuke didn't write this. It was copypasta.

MetalMessiah · Level 41: Metal Blade **Posts:** 16725 **Timestamp:** Tue Apr 29, 08 7:09 PM