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Debate: Capitalism vs socialism

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Which is the superior system, capitalism or socialism?

Background and context

Capitalism is the world’s dominant economic system. Within it, the means of production and distribution are owned by individuals: private ownership and free enterprise are believed to lead to more efficiency, lower prices, better products and rising prosperity. Socialism advocates the ownership and control of the means of production and industry by the community as a whole: the community is believed to be both more just and more efficient through central planning, or participatory planning. In Marxist theory Socialism represents the stage following capitalism in a state transforming to communism; for many, however, it is a goal in itself. This binary view of potential political and economic systems may be thought simplistic, but it is a debate that is extremely common. Necessarily, many other systems are not touched upon.

Contents

History: Does history demonstrate potential of capitalism/socialism?

Yes

  • Capitalism is more successful than socialism historically Richard Ebeling. "The Failure of Socialism and Lessons for America." The Future of Freedom. March 1993: "Earlier in this century, the Austrian economists demonstrated that socialist planning would fail. Ludwig von Mises and Friedrich von Hayek showed clearly and irrefutably that when private property was nationalized and market competition eliminated, economic irrationality would result. [...] The arguments of the Austrian economists against socialism have been proven correct in every country in which central planning has been instituted. Whether it has been in Russia, Cuba, Vietnam, Ethiopia, Poland, or Mongolia, wherever the planning model has been imposed and has supplanted the market economy, economic disaster has occurred. The types and varieties of goods and services produced by the state have borne no relationship to the types and varieties of goods and services actually demanded by "the masses" in these people's republics. Store shelves have been empty of the things people wanted; and they have been stocked with what no one desired. Resources and labor have been misallocated and wasted. And the customers, who are "always right" under capitalism, have been reduced to a life of long lines at state-retail stores and to a daily hunting for the essentials of everyday life in these socialist paradises."
  • Soviet Union demonstrates failures of socialism. Richard Ebeling. "The Failure of Socialism and Lessons for America." The Future of Freedom. March 1993: "Socialism's failure in the former Soviet Union and in the other socialist countries stands as a clear and unquestionable warning as to which path any rational and sane people should never follow again. Government planning brought poverty and ruin. The idea of collectivist class and ethnic group-rights produced tens of millions of deaths and a legacy of civil war and conflict. And nationalized social services generated social decay and political privilege and corruption."
  • Best ideas have come from individuals, not govt directive. Milton Friedman: "Columbus did not seek a new route to the Indies in response to a majority directive. [...] The greatest advances of civilization, whether in architecture or painting, in science and literature, in industry or agriculture, have never come from centralized government."[1]

No

  • Genuine socialism has greatly improved societies One example of this is the Spanish revolution. Even though it only lasted for 2 years before it was violently destroyed by a counter revolution conducted by a combination of fascists and statist republicans, the revolution was responsible for many successes. In Aragon, Levant and Castile there were about 1,650 collectives and more than a million people (Sam Dolgoff has estimated that 10 million participated wither directly or indirectly in the Spanish revolution) and 70% of the rural population of Aragon lived in Collectives (organised voluntarily). According to Dave Markland "agricultural production and deliveries were strongest in the anarchist areas" of Spain ("Spanish Anarchist through a Participatory Lense" in Real Utopia: Participatory Society for the 21st Century - edited by Chris Spannos). For example, In Aragon productivity rose 20% during the time of the revolution. [see extended argument on argument page]. Another case is Kerala, at state of 30 million people in southern India, that has been socialist for many years, getting progressively more socialist, and since 1998 has had an experiment in decentralised participatory planning. This has all been a massive success and in terms of social indicators, Kerala is beginning to look like a first world country, even though it began as one of the poorest regions in impoverished India - [see extended argument page for details].
  • Capitalism has fostered imperialism, exploitation, and suffering The economic rational behind this is simple. In order to make profit and achieve enough growth to outcompete opponents both capitalist nations and corporations have had to subjugate and exploit people in what are now unkindly called third world countries. In an Interview with L'Humanite, economist Samir Amin describes the relationship between capitalism and colonialism thusly: "Capitalism has been colonial, more precisely imperialist, during all the most notable periods of its development. The conquest of the Americas by the Spaniards and Portuguese in the 16th century, then by the French and the British, was the first modern form of imperialism and colonization: an extremely brutal form which resulted in the genocide of the Indians of North America, Indian societies in Latin America thrown into slavery and black slavery through the whole continent, north and south... During all the stages of capitalism, the plunder of the resources of the peripheries, the oppression of colonized peoples, their direct or indirect exploitation by capital, remain the common characteristics of the phenomenon of colonialism." See also here for a short overview of why capitalism fosters imperialism. (see extended argument on argument page)
  • Examples cited as socialism are usually not socialism Socialism, in it's purest form, means a classless society where everyone owns the means of production. To argue that this was the case in the Soviet Union would be ridiculous. The Soviet Union was more akin to a military dictatorship. Examples of true socialism include the Spanish revolution, the Zapatista revolution in Chiapas, southern Mexico, the Israeli Kibbutzim and examples of things that have got, or are getting, close to socialism include the recent Venezuelan and Bolivian revolutions involving large federations of communes etc., the recent democratic planning experiment in Kerala, India and many others. If you look at all these examples you will see that they have, at least partially if not greatly, improved the lives of the people in them.
  • Failed attempts at socialism do not disprove its potential. It is incorrect to say something doesn't work just because it doesn't work in one small experiment (i.e. the Plymouth Plantation). There are certainly cases in which socialism has failed, but there are also many examples in which it has succeeded, such as as the Spanish revolution, the Zapatista revolution in Chiapas, and in southern Mexico.



Classes: Which is better at dealing with class in society?

Pro

  • Socialism wrongly incites antagonism b/w classes. Richard M. Ebeling. "The Failure of Socialism and Lessons for America." The Future of Freedom Foundation. March 1993: "2. Collective or Group Rights. For the advocate of socialism, the idea of individual rights has been a bourgeois prejudice and deception. For socialists, human relationships in society are defined and determined by class relationships and antagonisms. The idea of individual liberty has been considered a smoke screen to blind those who are exploited and oppressed from understanding the 'true' nature of the social order. It was for this reason that Martyn Latsis, a senior officer in the newly founded Soviet secret police, said in 1918 that, in judging the guilt or innocence of an accused, 'the first questions that you ought to put are: To what class does he belongs What is its origin? What is his education or profession? And it is these questions that ought to determine the fate of the accused."


Con

  • Capitalism divides people into classes By creating the vast earning inequalities capitalism divides people into classes whereby some people are born into more privileged positions than others. Classes are also created in capitalism by some people owing the businesses and hiring others to be wage-slaves for them - the division between the capitalist class and the working class. A third class division that occurs in capitalism is the division between people who get empowering jobs and have a say in the running of society (coordinator class) and those who don't (working class). For a short analysis of class in capitalism see here and for economic analysis, including class and its creation, see Economic Justice and Democracy by Robin Hahnel. For more analysis of class in society see The Makings of the English Working Class by E. P. Thompson, Economic Apartheid in America by Chuck Collins, Felice Yeskel and Class Action, and The No-Nonsense Guide To Class, Caste & Hierarchies by Jeremy Seabrook. On the other hand, socialism is classless so it doesn't suffer from these inequities and problems.

Private property: Is private property important?

Pro

  • Private property is essential to the human race. The right to own property is central to man’s existence. Private ownership of property (including land, businesses and goods) gives individuals security and a means to control their own affairs. Ownership brings responsibility and allows individuals to plan for the future so as to provide for themselves and their families. For example, owning a house, a business or some land makes it possible to borrow against that property so that individuals can invest for the future. The lack of private property rights in much of Africa makes such borrowing and investment impossible, and is one reason for the continent's lack of economic growth.


Con

  • Private property is not essential Focusing only on the very narrow aree of Europe, the most prosperous time for ordinary people was a time without private property. This time was the 11th to 13th centuries. During this time there was no private property and everything was run by local currencies in local egalitarian economies (much of the aristocracy was losing control, hence why they invented corporations), not centralized currencies or large corporations. In Life Inc. Douglas Rushkoff writes that at this time "quality of life for most Europeans was better than at any other time in history, including today; The working class enjoyed 4 meals a day, usually of 3 or 4 courses. They worked 6 hours a day, and just 4 or 5 days a week. In addition to metrics such as demographic expansion and urban development, measures of health and well-being also surpassed our own."


Rights: Which system better protects rights, democracy?

Pro

  • Capitalism relies on righteous belief in freedom. Milton Friedman: "Underlying most arguments against the free market is a lack of belief in freedom itself."[2]
  • Capitalism is necessary condition for political freedom. Milton Friedman: "History suggests that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition."[3]
  • Without rights and property, tyranny of majority reigns One basic problem with socialism is that it raises "the public good" over many individual rights, such as the right to private property (or at least socialism tends to infringe on the right to private property to a higher degree that capitalism [and maybe less so that communism]). The larger problem is that the idea of "the public good" can be used to justify various kinds of abuses and infringements, and even possibly human-rights abuses. For example, the majority may decide to punish former wealthy land and business owners in order to discourage inequality in the future. The problem is that there is no limit to the ways in which abuses can be justified in the name of "the collective good". Individual rights, such as the right to private property help protect against such abuses, which can range from minor injustices to full-blown human-rights violations.
  • Capitalism is guided by people's "invisible hand." In Wealth of Nations, Adam Smith argued that capitalism had a "guiding hand" which drove people working for their self-interest to help society as a whole. On the other hand, socialism creates a certain guiding hand that drives people for the greater good to acutally help the special interest who hold the power.
  • Socialist leadership cannot protect human rights effectively. This type of utilitarian framework neglects appeals for human rights and any other framework of deontology, morality, ethics, etc. Capitalism is able to embrace the utilitarian framework while not precluding any form of decision calculus in policymaking to protect human rights.
  • "Collective Good" is a category error. In that who benefits from any situation or policy is an individual. Ascribing a benefit or right to a group can only be done (as a shorthand) if that group is defined by the criterion of holding the benefit or right. Socialism holds the rights of the fictional collective above the rights of an individual just as theocracies place the rights of their proclaimed divine above that of individuals.
  • Capitalism divides and diffuses the power to oppress. Socialism places both the control of wealth and the control of coercive force in the same hands, the state. A truly capitalistic state places wealth and its means of production in private hands which do not have the authority to use coercive force, while placing the authority and means use of coercive force exclusively in the hands of the state which does not have the authority to directly involve itself in economic enterprises. The private sector can then oppose state tyranny by financing opposition while the state may oppose private sector inequity with force backed law and the threat of confiscation of property.
  • Capitalism exists under constraints of democratic govt. Capitalism isn't a monolithic system - capitalism can have elements of control in it. After all, taxation is a capitalist creation and almost all capitalists accept a role for state regulation to prevent market rigging and to help those in absolute poverty. More broadly speaking, capitalism exists within the constraints of a democratic system, in which the people decide collectively - through their government - to place certain constraints, laws, and regulations on capitalism. Capitalism is ultimately subservient to the democratic system and the collective (and hopefully compassionate) will of the citizenry.


Con

  • Capitalism often subverts human rights for profits. These rights that are subverted include the right to life, the right to live adequately, the right to earn a fair wage, the right to liberty etc. In fact, looking through the UN declaration of human rights it is hard to find a single right that isn't either constantly subverted or subverted in poor countries in order to achieve prosperity for rich countries, under capitalism. For some big examples of human rights that have been subverted for profit see the argument page on how capitalism fosters imperialism and for some reasons why see the sections on inequality, individual desires, market prices, and charity.
  • Capitalism subverts genuine political freedom. Capitalism can tolerate democratic forms but not democratic substance. The reason for this is that capitalism requires that a small group of elites (the capitalist class) rule society with the collusion of a larger group of elites (the coordinator class), but if there was genuine popular democracy the people would not allow these elites to maintain their privilege. This is why no capitalist society has ever passed beyond polyarchy (see Democracy and its Critics and Polyarchy: Participation and Opposition by Robert Dahl for definitions. In brief, a ployarchy is a society ruled by a group of elites where the public gets to decide on certain intervals which elites have more or less power and which elites get to rule but where the public has not effective participation). The economics of capitalism provide the elites also with an excellent tool for the subversion if genuine democracy (see extended argument page). See Democracy for the Few by Michael Parenti for the best account of how capitalism subverts genuine democracy in practice (with the example of America - the freest polyarchy) and see the first 4 chapters of Economic Justice and Democracy by Robin Hahnel for a more economic analysis.
  • The only genuinely democratic societies have been socialist. Examples include the Spanish Revolution, the Zapatista Revolution, Kerala, the Partisan republics of the various anti-fascist resistances at the end of WW2, and smaller examples. This is because unlike capitalism, socialism is not ruled by an elite that must stay in power.
  • Capitalism impairs the right to food/life. According to the UN "The Right To Food: Commission on Human Rights Resolution 2002/25” 36 million people starve to death every year despite the fact that the world currently produces enough food to feed everyone and according to the Food And Agricultural Organization Of The United Nations' 2008 report the world could produce twice as much food. That means that because capitalism has such an unfair system of distribution and of rich countries stealing resources from poor countries, the figures for deaths from starvation that could easily be prevented is the equivalent of 6 Nazi Holocausts every year! The reasons capitalism causes this much starvation can be found in Late Victorian Holocausts: El Niño Famines and the Making of the Third World by Mike Davis and Making Poverty: A History by Thomas Lines, among others, and for the root causes in capitalism of the exploitation that leads to hunger see the extended argument for Capitalism has fostered imperialism, exploitation, and suffering. In brief, since the people and communities in the peripheries ("the third world") of the capitalist world-system are so exploited (this exploitation is one of the main features of capitalism) and are paid so little for what they produce they cannot afford to buy food. As a result of this food is allocated unevenly, favouring the core ("first world") of the capitalist system, where people have profited from the exploitation and can afford to pay for the food and thus make a profit for the food sellers. This means that the people in the peripheries do not have access to food and they cannot afford to buy it, so they starve. This is not protection of human rights in the slightest.
  • Socialism is ideal for protecting human rights. The argument that socialism cannot protect human rights since it seeks the good of the people is ridiculous. Surely, human rights is one of the most important aspects of the good of the people. Any truly socialist society would protect, and has protected, far more human rights than capitalism has in the best circumstances. And since major decisions would be made by everyone, not corporations or states, then they would obviously seek to promote their human rights. Socialism also protects from the tyranny of the majority (see the decision-making structure section for an overview of participatory planning which is an excellent method for protecting society from the tyranny of the majority).
  • Capitalism gives corporations tyrannical powers There are pure unaccountable tyranny, as well as the state. For the tyrannical structure of corporations see The Corporation: The Pathological Pursuit of Profit and Power by Joel Balkan, The Corporation (documentary), Life Inc. by Douglas Rushkoff or "Corporate Law and Structures: Exposing the roots of the problem" by Corporate Watch (follow the link of the title here. For the tyrannical acts of corporations see one of the NGOs dealing with corporate crime (such as Corporate Watch and many others) or many of the books and links given at the end of this debate. Corporations are less democratically accountable than almost every state and about the same as the worst ones. "Private Power" is really a euphemism for corporate power. Corporations are directly linked to the state and their power is extremely centralised (both internally and externally through the IMF, World Bank, WTO and similar structures). So putting more power into the hands of corporations is hardly diffusing the power to oppress.
  • Capitalism is very dictatorial. Firstly, capitalism is extremely dictatorial in the economic sphere. This was discussed in the argument that capitalism gives corporations tyrannical powers. But capitalism also fosters dictatorships in the political sphere. Ignoring the polyarchic capitalist societies (and the fact that capitalism cannot go beyond polyarchy and to democracy - as discussed in the argument that capitalism subverts genuine political freedom) the majority of capitalist societies have been dictatorships - such as Indonesia under Suharto, Burma under Than Shwe, the many juntas in Latin America, The Congo under Mobutu, and many many others. In fact, dictatorships are necessary in the peripheries of the capitalist world-system. This is because the people in the peripheral societies are unwilling to be exploited for the profit of the capitalists and so a dictatorship is needed to keep them in line (for explanation of the division of capitalism into the core, the peripheries and the semi-peripheries see the extended argument page on capitalism fosters imperialism, exploitation and suffering. For information on how capitalism needs dictatorships in the peripheries see Blackshirts and Reds: Rational Fascism and the Overthrow of Communism, The Washington Connection and Third World Fascism (The Political Economy of Human Rights - Volume I) by Noam Chomsky and Edward Herman and The Real Terror Network: Terrorism in Fact and Propaganda by Edward Herman and see here for a brief overview.
  • Capitalism only respects liberty of rich to stay rich. Bertrand Russell: "Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate."
  • Socialism seeks social justice. Socialism seeks to redistribute wealth and to ensure that the means of production are at the service of the whole of society, so that all can benefit and none will go without. This ensures social justice.
  • Capitalism is no "invisible hand", but a crushing foot. The term "invisible foot" was coined by E.K. Hunt. Explanations of how capitalism crushes human relations can be found in Life Inc. by Douglas Rushkoff and Parecon: Life After Capitalism by Michael Albert. The arguments are too long to make them here but this side has made a few of them in other parts of this debate, so you can look at them for a brief introduction to the idea.

Market prices: Do market prices make sense?

Yes

  • No transaction happens in capitalism unless both parties benefit. Milton Friedman: "The most important single central fact about a free market is that no exchange takes place unless both parties benefit."[4]
  • Market prices are always fair prices. In capitalism, the market determines price, including pay - the price of labour. If some people are paid huge sums, that is because other people believe they have unique talents which are worth paying for. If they fail to perform, then they will stop being rewarded so highly. This is all part of a dynamic capitalist system which values individuality and rewards ability and risk-taking.
  • State guaranteed prices lead to shortages. In real socialism, the prices of goods were guaranteed. Too bad that there usually were not many goods in stock, including such 'basic' stuff like toilet paper (widely substituted by newspapers at that time) and sanitary napkins (widely substituted by whatever was suitable for the purpose). The small amount of goods that was there was usually sold "under the counter" at - well - market price.


No

  • Market prices do not reflect social cost Market prices do not include any costs to third parties, including anything from individual people all the way up to the ecosystem as a whole (these are called externalities). These costs could be negative, such as pollution, or positive, such as pollution cleanup. Negative externalities are overproduced (on a scale of what is socially acceptable) and positive externalities are underproduced - since accurate prices would make actions with negative externalities more expensive and actions with positive externalities cheaper, meaning more positive externalities would be produced and less negative externalities (it would about approximate the social cost). That would be accurate pricing. But social costs are excluded from pricing in the capitalist marketplace (they affect a third party) so it is economically rational to produce more negative social and less positive social cost cost than is socially rational.
  • Payment schemes under markets are unfair. When people are paid more in the market it doesn't mean that people believe in what they are producing more. It means that they own more property, have more bargaining power or are better at making other people pay the bills (often by exploiting them). So the best way to make money under capitalism is not to produce something good that we all love, but to already be rich or to be a thug. The more money you have the more money you will get in the future, do to payments for property, increased bargaining power due to having lots of money. And the less money you have, the less you will get in the future, for the inverse of the same reasons. Rewarding thugs and people who are lucky enough to already have alot of money (that they usually got by extracting value from other people's labour) hardly seems like a fair method of remuneration. In fact, it seems like the exact opposite. And the idea that transactions in capitalism do not harm either party is a myth. See the argument on exploitation (in the inequalities section) and the argument on imperialism (in the history section) for a rebuttal. For more problems of capitalist markets see here.
  • Markets often go against human interests and values. This is because of the way that they measure success. The way that markets measure success is through GDP. But the values that this gives to things is depraved in human terms. It under-appreciates things like using less gas (and thus polluting less), walking to work instead of taking a car, eating with friends, sharing, playing cards and doing a service for a neighbor without asking for money in return. In fact, many of these things subtract from GDP. Conversely, getting cancer, being in a car crash, being diagnosed with schizophrenia, getting a divorce and murdering someone can all, unfortunately, add to GNP. And, yet, despite the frequently counter-human nature of GDP, it is the popular capitalist measure of whether human societies are advancing or regressing.


Economics: Is capitalism more economical/efficient than socialism?

Pro

  • Efficiency isn't the major goal of capitalism as a whole. It will by its very nature provide checks and balances to its working system. Efficiency is a by-product of a good idea, ideas that are faulty will collapse as long as corruption is held at bay.
  • Capitalism allocates capital/resources most efficiently. The reason for this is that capitalism gives individual investors the highest of personal incentives to choose wisely where they put their money: putting it where (to that individual's best knowledge) it can make the most money, which is where there is the greatest demand for a service and the greatest ability of a company to provide that service efficiently.
  • Capitalism provides people with what they actually want. Capitalism is based on the idea that services and goods will exist only because there is a demand for them. They will not exist if individuals do not want them, as demand will fall, and a company providing a good or service will simply go out of business. Resources will not be wasted on the good and services not wanted, and instead will, eventually, be put behind those that are wanted. And, the system constantly adjusts itself to make sure it supplies exactly what people actually want, in exactly the amounts that are actually demanded. This is because a company will not generate enough revenue to sustain supplying more than is actually demanded. Socialism, conversely, relies to a greater extent on the government (theoretically the collective body of people), struggling to supply goods and services on the speculation of whether those goods and services are desired, but without a direct feed-back loop that kills supply of goods that are not wanted. Under socialism, a government employee may have the power to continue a service because it is considered to have the potential to meet future demand, or because it is believed to be important and in the interests of the public good. But, this program can be supplied for months and even years by tax revenues, and without the restraints of revenue to hold-back spending. Programs can continue for months, years, and even decades that should have died, with many resources being wasted in the process.
  • Competition produces more valued goods more cheaply. Competition yields better products and more efficient processes in all fields of man's activities.
  • Planned economy is never as effective as free markets.
  • Socialist governments slow progress of markets. The guiding hand of government is too strong in a socialist system; it means that change is slow – which means that innovation is missed. This isn’t just pro-business, it has real effects on the lives of citizens - people are poorer because of it. In a capitalist system, economies are diverse enough that when problems happen in one sector, others are often insulated by their differences. In a socialist system, where everything is centrally controlled and diversity is non-existent, when government gets things wrong, everyone suffers. Ultimately, socialist systems are so inefficient and corrupt that labour has to be forced for the state to continue functioning (though this may also be a logical outcome of thinking less of the importance of individual freedoms compared to some abstract communal good). The failure of the USSR and other command economies shows the poverty of socialism and the failure of central planning, as on a smaller scale does the failure of nationalised industries in many western countries.

Con

  • Socialism has shown itself to be very efficient. A prime example of this is the Spanish Revolution. Information and explanations are given on the Spanish revolution in the argument (and argument page) genuine socialism has greatly improved societies (in the history section) and information on how socialism in the Spanish revolution not only brought prosperity and improvement of life to the Spanish people, but also economic efficiency is given. To take a few examples, In socialist Aragon, in which 70% if the rural population had voluntarily collectivised (the rest had chosen not to and were given the freedom to do so), productivity rose 20% during the time of the revolution. According to Dave Markland "agricultural production and deliveries were strongest in the anarchist [socialist] areas" of Spain (see extended argument page for more examples). And all of this was achieved while fighting a civil war and a against a counter-revolution, both of which caused massive drains on the resources of socialist Spain. More information can be found in the argument page of socialism has greatly improved societies (in the history section).
  • Capitalism has shown itself to be inefficient. For example, by 1995, after neo-liberal deregulation which brought a purer capitalism than the social democratic era that preceded it, 95% of financial transactions were speculative and only 5% were related to the real economy. That means that only 5% of transactions actually involve production and trade of goods and services and bring tangible improvements, affecting the lives of ordinary people. On the other hand, 95% of economic transactions in capitalism just go into setting prices and bringing profits to the capitalist class, or in some cases the upper middle class, generally at the expense of the working or peasant classes since they are excluded from financial speculation. The speculative transactions waste time that could be spent working on production and consumption which affect the ordinary people, and the profits made through speculation are coming from their wages - which goes part of the way to explaining the decline in real wages during the neo-liberal period of capitalism. That figure is the generally accepted figure but the source used here is Profit Over People: Neoliberalism And The Global Order by Noam Chomsky.
  • Capitalism grossly mismanages resources. According to the UN "The Right To Food: Commission on Human Rights Resolution 2002/25” 36 million people starve to death every year despite the fact that the world currently produces enough food to feed everyone and according to the Food And Agricultural Organization Of The United Nations' 2008 report the world could produce twice as much food. In other words, we produce enough food to feed everyone, and we could produce twice as much, but someone still starves to death every second. If that is not mismanaging resources then what is?
  • Socialism provides people with what they actually want. In collective socialism workers' and consumers' councils interact through the participatory planning process to determine what is produced and consumed. This means that what is produced is exactly what the consumers demand. And since people take part in decisions to the degree they are affected, what is produced moves even closer to what is socially wanted and responsible. Mutualist socialism is dictated by supply and demand so it provides in the same way that capitalism does. However, advertisements in capitalism are designed to brainwash consumers into buying things that they do not want by creating subconscious attachment to the product. This means that the things are produced and sold do not reflect what people want per say, but they reflect what will make profit for the top corporations that control capitalism. In short, socialism provides people with what they actually want, and need, much better than capitalism does.
  • Centralized currency is biased toward scarcity and hoarding. This is, in part, because it appreciates in value when it is not spent. And centralized currency is an integral part of capitalism. This bias slows down the rate at which money circulates and means that instead of being spent on boosting communities and stuff like that, money is spent on increasing individual consumption or just making yourself already richer, so society suffers.
  • Socialism has control, unlike capitalism Socialist economies are very well planned and has control over all the industries, thus providing a guiding hand in building and contstructing its economy. A government wants its country to succeed, however a corporation only wants itself to succeed, even if its country is going to be doomed. The government doesn't care for money. It doesn't care for greed. It only cares for its country's status and for the country's own good. So, which would you choose? A greedy corporation or a government that only cares for the country's good? The government will be choosen of course, and that's what socialism means.
  • Unplanned capitalist economies undergo dramatic volatility. Economies in capitalist systems are essentially unplanned, so they often crash, producing depressions that damage the lives of millions. Socialist economies are planned, which means that problems can be foreseen and prevented. Ultimately, socialism guides with the aim of human happiness in mind, rather than the glorification or gratification of a particular individual or class.

Competition: Does capitalism foster competition? Is this better?

Pro

  • Capitalism actively breaks monopolies to foster competition. Whilst it is true that monopolies sometimes form, these are combated by regulatory methods like monopolies commissions (witness attempts to break up Microsoft, or regulators forbidding the merger of some airlines on competition grounds). So capitalism actively tries to stop monopolies. On the other hand, monopolies are inevitably a part of every aspect of activity in socialist systems - the monopoly of the state.
  • Capitalist competition continually improves with technology. Bill Gates: "The Internet will help achieve 'friction free capitalism' by putting buyer and seller in direct contact and providing more information to both about each other."[5]


Con

  • Capitalism is characterized by monopolies, not competition. As everyone knows, monopolies are often formed under capitalist systems. Corporations were first chartered with the aim of gaining a monopoly over whatever area the monarchs chartered them in. So the need to monopolize is built into the basic logic of capitalism. The giant conglomerates that dominate world trade are proof of this. On the other hand, no monopolies exist in genuine socialism so there is no transfer of wealth to the centre or the pushing out of small, local groups - two important characteristics of monopolies.
  • State monopoly is not present in a socialist system. A truly socialist system is classless and everyone owns the means of production. That is hardly a state monopoly. There are no monopolies. The productive resources are owned by everyone collectively (or no-one if you like).


Charity: Which fosters greater charity?

Pro

  • Capitalism fosters, does not prevent, charity. Just the opposite. There are lot of rich people in capitalist society who provide grants for charity funds, student fellowships etc. After all, anybody in a capitalistic society can take some of his own money or goods today, out of his/her free will, and go and give them to other (poorer) people, if he or she feels it's the right thing to do. Capitalism doesn't prevent that; nor does it prevent you from keeping your earned goods/money if you want to. Some examples of rich people who donated to charity are Bill Gates, Oprah, and others. On the other hand, socialism actively and rather aggressively restricts the amount of riches one can have. So, out of the two, capitalism clearly offers more choice.


Con

  • Capitalism has a systemic bias against helping others. Since third parties are externalised from prices in capitalism, it is economically inefficient to consider the effects that something has on others. And since this exclusion of third parties leads to the overpricing of positive externalities and the underpricing of negative externalities, it is cheaper to exploit someone than it is to be fair towards them (see the section on market prices for more detail). This is compounded by the selfish pursuit of profit that capitalism encourages (see the section on individual desires for more detail) . These combine together to mean that it is economically inefficient in capitalism to consider others and so charity and solidarity is punished, whereas anti-social behaviour is rewarded with profits. A perfect example of this is fair-trade: since workers are treated equitably in fair trade products, they become more expensive (the overpricing of positive social costs) and are thus rare and often unaffordable except for the well-off.
  • Socialism provides motivation of aiding fellow man. The impulse to share wealth and material amongst the community, to support all, leaving none behind, is one of the purest among humankind. Socialism harnesses this impulse effectively, whereas capitalism tends to squash it in favor of individualism and competition.
  • Charity is not meaningful in a capitalist system. Charity is invalidated in capitalism because if you steal a million pounds from someone and then give them a pound of charity because they are starving then that is not increasing their living standards.


Decision-making: Which offers superior decision-making apparatuses?

Pro

  • Socialism poorly adapts to change. Well, life is unpredictable. Socialism promises predictability - or what else is there to imagine under this "right to live"? But there is nobody who can tell what tomorrow will bring, nobody and nothing that can guarantee well being. The basic premise of socialism is therefore as realizable as perpetuum mobile. Sometimes, the crops may be bad, natural disasters can strike, new technologies can emerge so your knowledge or skill is no longer valuable. Capitalists usually quietly and peacefully (though, of course, not necessarily lightheartedly and easily) accept these changes or losses as a thing that life brings, and learns how to adapt to the new circumstances. Socialists, on the other hand, usually begin a fruitless and absurd search of whom to blame for (not predicting) these abrupt changes, with the "outcome" of this "search" usually being "the capitalist behaviour" of some individual or a group of people, against whom the aggressive anger of the "common people" is subsequently senselessly turned.

Con

  • Socialism puts planning into the hands of the people. In collective socialism workers' and consumers' councils interact through the participatory planning process to determine what is produced and consumed. In this system of planning, each workers' or consumers' council (in their federations) make a proposal for what they want to produce or consume and other workers' and consumers' councils can approve or reject the proposal. If the plan of an individual council is rejected then it is responsible for editing and resubmitting it. This process means that what is produced is exactly what the consumers demand and what the workers are happy to produce. It means that each person takes part in a decision to the degree they are affected, solidarity is encouraged, democracy and self-determination is promoted, and a plan comes together that everyone is happy with. It means that social costs can be respected and plans can be made without domination. It also means that the plans will be fair since they have been made by everyone involved to the degree they are affected. See Participatory Planning for the best overview of this process and for more detail see Economic Justice and Democracy by Robin Hahnel and Parecon: Life After Capitalism by Michael Albert.
  • Socialism can effectively respond to crises. A truly socialist society would be far more versatile and flexible than any capitalist one. Since there would be no classes and decisions would be made by the people, they would be able to make decisions that would best avert the crisis for the average people, not the elites (like in capitalism or fake socialism). And since decision making would be truly democratic it would be easy to change things about the society if everyone wanted it.


Conflict: Which better manages and possibly prevents conflict, war?

Pro

Con

  • Capitalism grossly misdirects money to military According to the 1998 UN Human Development Report, the additional cost of achieving and maintaining universal access to basic education for all, basic health care, reproductive health care for all women, adequate food and clean water and safe sewers (in other words, ending poverty) would amount to roughly $40 billion a year. The current military budget for the entire world is $1.1 trillion a year. This is 27.5 times the amount that would be need to ensure universal access to all of those things. This is mismanagement, driven in large part by the profit-interests of the "military industrial complex". In other words, 1/27 of the amount of money that we spend on killing each other and working out how to kill each other could end poverty (the single biggest killer in existence) but that money doesn't go to ending poverty because the military is profitable but ending poverty isn't! This misdirection of money is also a result of the need in capitalism for imperial conquests to expand profit and power. This misdirection of money to the military and the arms trade fuels war and conflict and a grievous level.
  • Capitalism necessitates imperial wars of conquest. See the section (and the extended) argument of how capitalism fosters imperialism, subjugation and suffering for information and explanation on this. But for now, suffice it to say that imperial wars are necessary in capitalism to bring a flow of cheap resources from the peripheries to the centre and to create cheap markets for goods produced by the top corporations. This is why capitalism has never existed without wars, particularly colonial wars and the civil wars that result from a society wrecked by colonialism. See here for an explanation of how capitalism causes militarism and war.
  • Capitalism necessitates war for profit. In What is Anarchism Alexander Berkman spoke of "the capitalistic interests of the various countries fight[ing] for the foreign markets and compete with each other there" and when they "get into trouble about concessions and sources of profit," they "call upon their respective governments to defend their interests . . . to protect the privileges and dividends of some . . . capitalist in a foreign country." According to an article from create real democracy there are 6 ways that corporations profit from war: control of strategic resources, building weapons, waging wars, reconstruction, debt and privatisation/corporatisation of the conquered nation. (See the extended argument page for sources on how to find out about war for profit in capitalism and about the military industrial complex, as well as their effects. For example, the size of the military industrial complex in the US economy is so large that since 2006 over $889 billion ($889,918,604,053) worth of contracts have been handed out, all of which lead to vast profits for US based corporations (see [6]).
  • Capitalism does not peacefully accept losses. When capitalism is faced with troubles it's typical reaction (it meaning the elites who run the show) is to steal from the poor so as to offset the (minor) losses that the rich have experienced. A brief look at history will confirm this but here is a recent example that illustrates this point: One of the ways the rich countries have reacted to the 2009 economic crisis is to make massive land grabs in poor countries, mostly Africa. Now, most of Africa is in a food crisis but the rich countries have still bought huge amounts of land to profit off.


Environment: Which system is better for the environment?

Pro

  • Socialism could do great damage to the environment. Without private means of production there are no private citizens to hold responsible for environmental harm which certain industries may cause if not run conscientiously. Placing industry in the hands of the state equates to putting the fox in charge of the henhouse, i.e. putting government in a position of conflicting interests. If it is actually possible, stateless socialism might avoid this if we revert to pre-industrial technology and a world population with pre-industrial sustainability i.e. euthanize the majority of the current pop. This would of course (one would hope) invalidate the reason we worry about environmental disaster e.g. the people whom it may harm and it makes future survival of our species much less likely in the face of potential large scale natural disasters.

Con

  • Socialism has inbuilt mechanisms to protect the ecosystem. Since through participatory planning (then planning mechanism for genuine socialism) everyone gets a say in decisions that affect them, the people most affected by an environmental decision would get the most say and would thus override decisions that harm the ecosystem they rely on. Since to destroy an ecosystem would need the permission of the people who rely on it, it is almost inconceivable that socialism could harm ecosystems. In fact, the main currents of the ecological movements have been socialist, such as social ecology or eco-socialism. There is much more to this but this is the basics. For much more detailed information on how socialism can, and would, protect the environment see chapter 8 of Economic Justice and Democracy by Robin Hahnel, The Ecology of Freedom: The Emergence and Dissolution of Hierarchy, Toward An Ecological Society and others by Murray Bookchin, The Ecological Revolution: Making Peace With Our Planet by John Bellamy Foster, [10] and others in the social-ecology and eco-socialist movements.
  • The argument that socialism could do damage to the ecosystem rests on two erroneous assumptions. The first assumption is that socialism is a statist society. This is completely false: as socialism (at its core) is a classless society where workers own the means of production it is very rare (if impossible) that socialism could be a state society - there are exceptions (such as Kerala, Bolivia, etc.) but that is because they are transitioning towards socialism, and in doing so are gradually taking away state power and putting it in the hands of the people. The second assumption is that stateless socialism can only exist in pre-industrial societies, a lá the ideas of Zerzan and other primitives. This blatantly false: the largest and best example of a socialist society was the spanish revolution, which was an industrial society, and most ideas for socialist societies (such as Prouhon's Mutualism; Bakunin's Collectivism; Kropotkin's Anarchist Communism; Bertrand Russell's Guild Socialism; Pannekoek's Council Communism; Rocker's Anarcho-Syndicalism; Albert's and Hahnel's Parecon; Shalom's Parpolity; and others') have been for industrial societies. So both assumptions that the argument that socialism could harm the environmnt are erroneous.


Public opinion: Where does the public stand?

Pro

  • People generally prefer capitalism to socialism. "Last November [2009] a survey of 29,000 people across 27 countries (almost all democracies) by GlobeScan and the BBC World Service found that only 23% agreed that capitalism is "fatally flawed" and needs replacing. Some 51% believed it had problems that could be addressed through regulation and reform, and a further 11% were happy with the system as it is." (The Economist, "Old dogs and new tricks", February 13th 2010)

Con

  • That poll shows that capitalism is not popular. More than twice as many people think that capitalism is fatally flawed and needs to be changed than people who think that capitalism is good as it is. It is very difficult to figure out the meaning of the majority for reforms because it is impossible to tell whether it is a result of the endless propaganda preaching that there are no alternatives to capitalism or whether it is a result of people thinking that reformed capitalism is the best system. No matter what that means, the fact that capitalism is so unpopular despite endless propaganda (through the mainstream media, all the corporate propaganda (see Taking the Risk Out of Democracy: Corporate Propaganda versus Freedom and Liberty by Alex Carey and see here for a brief overview), public relations campaigns, the internalised effects of advertising, and the way that people internalise their society) shows how deeply people are against capitalism. And the poll was from the rich countries, where the people have benefitted from the exploitation of others. Polls were not taken in the third world countries that have suffered the most from capitalism (a couple were and the results were obvious: in Mexico 38% of people think that capitalism is fatally flawed and that figure is 35% in Brazil - it is unlikely that that many people have felt their societies were fatally flawed (with all the factors mentioned earlier and with the prevalence of reformism everywhere) in many other societies and those figures represent massive dissatisfaction with capitalism. Capitalism is so unpopular that people in Russian (61%) and Ukraine (54%) would rather the utter tyranny of the Soviet Union. Results of the poll can be found here.
  • Other polls show that socialism is more popular than capitalism. For example, according to a recent gallup poll (found here) people in 17 out of 19 Latin American countries are more likely to call themselves socialists than capitalists - For example in Paraguay people are 5.37 times ad likely to call themselves socialist than capitalist (making a ratio of 5.37:1 in favour of socialism); that number is 4.33:1 in Nicaragua; 4.2:1 in Trinidad and Tobago; 3.33:1 in Uruguay; 3.27:1 in Venezuela; 2.74:1 in Costa Rica; 2.66:1 in Ecuador; 2.45:1 in Argentina; 2.22:1 in Peru; 2.12:1 in Bolivia; 1.71:1 in Dominican Republic; 1.69:1 in Chile; 1.69:1 in Columbia; 1.67:1 in Brazil; 1.65:1 in Guatemala; 1.29:1 in El Salvador; and 1.1:1 in Honduras. The only 2 countries that show greater popularity for capitalism are Panama, where the ratio of people describing themselves as socialist as opposed to capitalist is 0.87:1, and Mexico, where it is 0.81:1. It must be noted that both Panama and Mexico are dictatorships (with demonstration, but fake, elections) in which just being socialist is enough to get you arrested, or worse, as are Honduras and Columbia, so the support for socialism would probably be even greater there since people are afraid of speaking out. That all means that overall, a Latin American is 2.38 times as likely to consider themselves a socialist as opposed to a capitalist, despite the heavy repression of socialist in some countries and the history of it in others. The history of capitalist imperialism in Latin America provides ample enough reason why the Latin Americans feel like this. For information on the history of capitalist imperialism in Latin America see Open Veins of Latin America: Five Centuries of the Pillage of a Continent by Eduardo Galeano, Jungle Capitalists: A Story of Globalisation, Greed and Revolution by Peter Chapman, Year 501: The Conquest Continues by Noam Chomsky and Against Empire by Michael Parenti.


Pro/con sources

Pro

Con

See also

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