Capitalism vs. Socialism
by Will Armstrong
Thomas Jefferson said “ Still one thing more, fellow citizens -- a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government”.
In comparing economic systems one must first look at the governmental system that makes it possible. So the initial question that needs to be answered is, what is good government? Jefferson’s’ quote starts with the emphasis of protecting individual rights, not interfering with commerce and the avoidance of wasteful spending.
“The most important the role of government is to secure the rights and freedoms of individual citizens.”(Benson 1968) What rights and freedoms are we talking about? I can’t think of a better place to look than in the US Constitution and Declaration of Independence, since they are the blueprints of our government.
In The Declaration of Independence, Thomas Jefferson wrote, "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed."
It vital to realize that the source of our rights are not from the government but given by our creator. We already possess the unalienable rights and we charge the government to protect those rights. “Government has no innate power or privilege”(Benson 1968) only what “we the people” choose to delegate to it. Therefore the government is to be the servant of the people not their master.
One must also discern that we can’t delegate power that we ourselves do not possess. Another words we can’t empower government to do what we have no right to do. An example of this principal is that, since I don’t have the right to take what doesn’t belong to me how can I empower the government to redistribute the wealth of another.
One of the greatest benefits of capitalism is the freedom of choice. The choices of career, purchasing and investment decisions, to takes risks and reap the rewards. For capitalism to exist, the rule of law must protect property rights, individual rights, the right to start a business, and to invest. The rule of law is a fixed law that set definite limits on governments and individuals but can’t be changed at the whim of government or leaders. The concentration of government power, typical
in socialistic governments causes them to seldom respects the rule of law because it interferes with the power needed to implement their massive programs.
Capitalism allows the freedom to earn your way and the opportunity to be your best. It offers rewards for excellence, creativity, innovation and hard work. Your production improves the lives of others. Investors and business owners create opportunities for others. The rights of the individual are not sacrificed for special interest groups that empower government i.e. affirmative action, some eminent domain rulings, a tax code supporting redistribution of wealth, suppression of religious freedom through political correctness.
In a capitalist system, prices provide accurate information and incentives about how resources need to be allocated, thereby maximizing efficiency. Profits reward companies that are the most efficient and best serve the public. Companies that are inefficient and provide poor service are penalized. Profits provide strong disciplinary measures to businesses, and investor’s continually funnel resources into stronger companies continually creating more wealth and higher quality of life for everyone. (Mark J Perry 1995)
Some of the goals of socialism have merit. There is much value in collective enterprise; life and society has a social not just an individual facet. (Martin Luther King) Sometimes what works doesn’t fit in to our narrow political ideology. But the practice of socialism seems to range from bad i.e. much of Europe; to terrible i.e. the former USSR, Cuba, China, and North Korea
One of the problems with socialism is that whatever the noble intentions are to give power to the people, the power always ends up in the hands of an all-powerful elitist government. Socialist governments cannot trust the common man with power or freedom. Socialist’s tend to see corporations or corporate power to be the greatest threat to the freedom and advancement of the common man but have a naïve view that government can be trusted.
Think about this; if man can’t be trusted to govern himself why trust government to govern him, since those in government are subject to the same weaknesses as all of us?
Corporations are subject to the disciplines of the free market, if they fail to serve the public a competitor will replace them. Governments, on the other hand have no competitors, they have a monopoly, if they don’t serve us well its much more difficult to remove them. In the marketplace we are free to do business with who we want, the government, on the other hand can enforce their policies by force of arms. (Ross1997) Good examples of the dangers of concentrated government power are the roughly 100 million government- sponsored murders in the former USSR, China, Cambodia, Japan and Nazi Germany.
We need to consider the wise words of George Washington- “Government is not reason, it is not eloquence - it is force! Like fire, it is a dangerous servant and a fearful master!"
Thomas Jefferson also says "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated."
Socialist policies runs counter to the principles of limited government and to the enumerated powers given to government specified in the ninth and tenth amendments to the Constitution. Our courts have usurped legislative powers and abused the Constitutions general welfare clause to justify massive social programs, excessive regulations and a tax system that redistributes wealth and buys votes.
Another troubling side effect of socialist economic policy is the lack of incentives. If people don’t produce, there is nothing for the government to distribute, no matter what promises the government makes. Since there really isn’t a powerful reason to produce and innovate in a socialist system, poverty is the inevitable result. I mean why work hard if your hard work and ideas won’t significantly improve your living conditions.
The inevitable result of removing peoples incentives to produce and God given rights to run their own lives, is that people will do next to nothing and the state will be compelled to create a coercive enforcement mechanism whose extreme forms include i.e. secret police, Gestapo ect. Coercive enforcement is necessary to support the unpopular policies that keep the socialist ruling elite in power.
Since this country has become more socialistic, you can see some examples of mild types of political oppression in the form of political correctness. People are now afraid of speaking out on issues such as homosexuality, race relations, child discipline and religion for fear of ridicule, losing your job or even legal action.
Much of the criticism of capitalism is actually the result of corporatism or state sponsored capitalism, which is a form of socialism not genuine free market capitalism. Corporatism includes “direct handouts, corporate bailouts, eminent domain, licensing laws, antitrust regulations, or environmental edicts (Gregory2005) More recent examples of corporatism include Enron, who powerfully lobbied for the strangling regulations in the Kyoto treaty. Why would a large corporation want expensive environmental regulations? The answer is the promise of lucrative government energy contracts and of course the elimination of their competition through huge start up expenses. This may explain why many, if not most of America’s wealthiest corporate leaders are socialist leaning liberals.
As long as economic systems involve people there will always be problems but capitalism has consistently out preformed socialism by any objective measure. No matter how wise a system of central planning is, it can never exceed the collective wisdom of millions buyers and sellers in a free market. Any system that restricts the freedom of choice, private property rights, disregards incentives and looks to government, as its savior will eventually fail. With all its faults, there is no economic system that holds a candle to free market capitalism.
References:
The Proper Role of Government by Ezra Taft Benson 1968
http://wwwwww.zionsbest.com/proper_role.html
Why socialism failed by Mark J. Perry PHD. June 1995
http://www.thefreemanonline.org/featured/why-socialism-failed/
How Should A Christian View Communism? Martin Luther King Jr.
http://www.redmoonrising.com/AmericanBabylon/christandcomm.htm
Human Nature, Anarchy, and Capitalism by Kelley L. Ross, Ph.D. 1997 http://www.friesian.com/fallen.htm
Corporatism and Socialism in America by Anthony Gregory, February 23, 2005 http://www.fff.org/freedom/fd0411e.asp
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