Capitalism vs. Socialism


Several recent polls, plus the popularity of Sen. Bernie Sanders, demonstrate that young people prefer socialism to free-market capitalism. That, I believe, is a result of their ignorance and indoctrination during their school years, from kindergarten through college. For the most part, neither they nor any of their teachers and professors know what free market capitalism is.

Free market capitalism, wherein there is a peaceful, voluntary exchange, is morally superior to any other economic system. Why? Let’s start with my initial premise. All of us own ourselves. I am my private property, and you are yours. Murder, rape, theft and the initiation of violence are immoral because they violate self-ownership. Similarly, the forcible use of one person to serve the purposes of another person, for any reason, is immoral because it violates self-ownership.

Tragically, two-thirds to three-quarters of the federal budget can be described as Congress taking the rightful earnings of one American to give to another American — using one American to serve another. Such acts include farm subsidies, business bailouts, Social Security, Medicare, Medicaid, food stamps, welfare and many other programs.

Free-market capitalism is disfavored by many Americans — and threatened — not because of its failure but, ironically, because of its success. Free market capitalism in America has been so successful in eliminating the traditional problems of mankind — such as disease, pestilence, hunger and gross poverty — that all other human problems appear both unbearable and inexcusable. The desire by many Americans to eliminate these so-called unbearable and inexcusable problems has led to the call for socialism. That call includes equality of income, sex and race balance, affordable housing and medical care, orderly markets, and many other socialistic ideas.

Let’s compare capitalism with socialism by answering the following questions: In which areas of our lives do we find the greatest satisfaction, and in which do we find the greatest dissatisfaction? It turns out that we seldom find people upset with and in conflict with computer and clothing stores, supermarkets, and hardware stores. We do see people highly dissatisfied with and often in conflict with boards of education, motor vehicles departments, police and city sanitation services.

What are the differences? For one, the motivation for the provision of services of computer and clothing stores, supermarkets, and hardware stores is profit. Also, if you’re dissatisfied with their services, you can instantly fire them by taking your business elsewhere. It’s a different matter with public education, motor vehicles departments, police, and city sanitation services. They are not motivated by profit at all. Plus, if you’re dissatisfied with their service, it is costly and in many cases even impossible to fire them.

A much larger and totally ignored question has to do with the brutality of socialism. In the 20th century, the one-party socialist states of the Union of Soviet Socialist Republics, Germany under the National Socialist German Workers’ Party and the People’s Republic of China were responsible for the murder of 118 million citizens, mostly their own. The tallies were: USSR 62 million, Nazi Germany 21 million and PRC 35 million ( No such record of brutality can be found in countries that tend toward free-market capitalism.

Here’s an experiment for you. List countries according to whether they are closer to the free market capitalist or the socialist/communist end of the economic spectrum. Then rank the countries according to per capita gross domestic product. Finally, rank the countries according to Freedom House’s “Freedom in the World” report. You will find that people who live in countries closer to the free market capitalist end of the economic spectrum not only have far greater wealth than people who live in countries toward the socialistic/communist end but also enjoy far greater human rights protections.

As Dr. Thomas Sowell says, “socialism sounds great. It has always sounded great. And it will probably always continue to sound great. It is only when you go beyond rhetoric, and start looking at hard facts, that socialism turns out to be a big disappointment, if not a disaster.”

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One thought on “Capitalism vs. Socialism

  1. Charles H. Walkup, Jr. says:

    The basic problem as I see it between capitalism/socialism was stated by Jesus (Matt.6) in the Sermon on the Mount. “You can’t serve 2 gods at the same time. You can’t serve God and money (or mammon/mateiral things) both.

    Those who choose socialism (as I see it in the world) are NOT choosing God.
    Though it may have good intentions, socialism cannot work because it is a system that imposes decisions on individuals – decisions that God gave individuals the right and responsibility to make. When we always put self-interest first, we are making a choice (good/evil) that God allows us to make (and suffer the consequences). When we choose the interest of others over self-interest (denying oneself), that is a free choice we make. Socialism doesn’t allow that free choice. It imposes choices made by human, self-appointed Gods on others. One seduction of this is that if someone else makes those decisions in my place, then I don’t have to feel guilty for the negative consequences. Thus, our avoidance of personal responsibility enslaves us..

    Capitalism/free market is rightly based on a voluntary decision by individuals. This accords with God giving man free choice – to decide for good or evil. The danger with capitalism is that of the individual who chooses money/material things as (a false) God. The contributing mindset to this choice of money as God is that the main purpose of business is profit. NOT! As Md developer James Rouse said years ago “Profit is not the main purpose of business. The main purpose of business is to provide a product or service that is needed, and do it so well that it is profitable.” If capitalism/free markets is to function properly, then providing needed products/services must take priority over profits. When profits become the #1 priority of business, then capitalism/free markets are being undermined. That is a choice for self-destruction.

    “Choose you, this day, whom you will serve.”

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