Communism vs Capitalism

Today, a coworker–a young aspiring man–asked me about the book he can read that discusses and compares socialism and capitalism. Apparently, the interest in this topic was triggered by the coming need to choose between Mr.Sanders and Mr.Biden–the two candidates for the Democratic presidential nomination.  Sanders is often called a socialist or even a communist by the rival party, thus the question: what is wrong with being a socialist?

We talked a bit and I have realized that there is confusion between the terms “socialism”, “communism”, and “totalitarian system.” My colleague and his friends seem to mix them up quite arbitrarily, so the basic terms of the discussion need clarification. Here is goes. 

The primary difference between socialism and capitalism is not “totalitarian” or “democratic.” Each–”totalitarian” or “democratic”–describes a certain form of government, whether the country is socialism- or capitalism-based.  If the power in fact (not just on paper) is concentrated in one pair of hands or one institution and does not tolerate opposition (always, “for the benefit of the people,” because the opposition is “evil,” or “corrupt,” or “incompetent” at least), that is a  totalitarian form of government. It can exist along with socialism (as in the USSR) or capitalism (as in Nazi Germany). In both–the USSR and Nazi Germany–the declared form of government was democratic, but in fact, each had a totalitarian system where power was in the hands of one political party.

By the way, in the US, the power of corporations recently has grown so much that the current representative (also called constitutional) democracy may become just paper democracy. If the trend will continue, then no matter how many parties there are out there (they all will be–I hope not!–controlled by the same money), it may become a totalitarian form of government in fact. The saving grace for the US was, so far, the balance of power between three branches of the government set up by the founding fathers. If a similar system were set up for the USSR (instead of a “dictatorship of the proletariat” declared from the very first days), it may fare much better (or worse, we will never know).

A few words about the merits of a totalitarian system. It can be quite good for the majority of people (if the caring folks are at the top of the system), but more often than not, such a system is not caring (because it is not easy for the caring people to get to the top of any political system). Also, a totalitarian system is much more effective in the short term when a set of quick decisions is needed.

By contrast, the democratic system requires negotiations and coordination with all the affected parties. That is why in the military, democracy is quite limited. And that’s why there is probably no leader of any country who loves democracy, which is always on the way of the implementation of his great ideas. Many leaders respect the rule of the existing laws and work in the provided framework, but some try to break it and become a single-handed ruler – the head of a totalitarian system.

The problem of a totalitarian system–in addition to typically being suppressive of various freedoms–is that the decision making is in hands of fewer folks, all looking up at their leader and all scared of losing their lucrative positions. The fewer decision-makers with different points of view are involved, the higher is the chance of an error in judgment. That is the biggest weakness of any totalitarian system. And that was exactly the weakness of the Soviet system, the western critics pointed out correctly. But is not any big capitalistic corporation a totalitarian system? And what happens when a few big corporations take over and start controlling the government, elected or not? 

So, the form of government does define the difference between socialism and capitalism. What delineates them fundamentally is the ownership of the means of production. Who owns production sites, the state or private citizens? Under socialism, there is only one owner of the production means – the state. There may be some small private businesses allowed even under socialism. But the share of such private ownership in the overall capital of the socialism-based economy would be negligible.

Now the question. Does Sanders call for the nationalization of property (moving the ownership of the means of production from private citizens to the state)? Obviously, no. Why is he called a socialist then? It is done with a single purpose – to scare the voters away from him. Sanders proposes to enhance the existing and establish new social programs to help the young and the poor. So, some unscrupulous Sanders’ opponents call him a socialist. They use the fact that the words “socialism” and “social” sound similarly. The proposed programs are oriented on the big sectors of society–they are socially oriented. But they have nothing to do with socialism. 

I am not calling to vote for Sanders. I am just saying that one should not avoid voting for him for the wrong reason.

In the same way, Sweden is called “socialistic” but does not have socialism either. It has well-established capitalism, and its form of government is a “parliamentary representative democratic constitutional monarchy.” But people call it “socialistic” because its internal policies are much more socially oriented than in many other capitalist countries.

So, here you have it–the differences between socialism and capitalism, and between totalitarian and democratic systems of government.

As for communism, there was never such a system established anywhere. Communism is socialism with free access to any goods for everybody. When socialism-based (without private property) society achieves such production power that everybody can have for free whatever they want, that is communism. Sure, to achieve such a state of affairs, not only the economy has to be very effective, but the people have to be educated enough not to have excessive greed. So, it is an ideal never achieved anywhere, so far. It was declared the goal in the USSR. That is why the party that took on itself to achieve this goal was called the Communist Party.   

As a kid, I was thinking, “Why should I work hard if in the future there will be everything in abundance?” I just could not wait until I could have as much ice-cream as I wanted. I am not kidding.

Unfortunately, the Soviet Communist Party and much of those in the position of power got corrupted before any significant progress on the path of achieving the lofty goal.

Is it possible to achieve Communism at all? I think the jury is still out. The fact that it was not achieved yet does not mean it is not possible. To have people motivated mostly intrinsically and not being greedy, working for the common good instead, sounds very attractive, isn’t it? I hope one day somebody will figure out how to do it. The idea of the American system of balance of power was also questionable in the 18th and even in the 19th century. But founding fathers managed to build one. It has survived many turmoils and I hope it will survive the current calamity too.

That’s it. If some terms are still not clear or you think I got it wrong, send me a message. I love thinking about these things.