I was in a debate on Facebook recently, and was challenged on my definitions of capitalism and socialism. I wanted to be fair to the Marxist idiot I was debating, so I asked him to define ‘capitalism’ and ‘socialism’ in his own terms. His response was to post a link to the above video, which I encourage everyone who reads this to watch (it’s only a few minutes long…). The remainder of this post represents my response to the Marxist I was debating.
Dr. Wolff makes some good points regarding the nature of the employer/employee relationship, but he goes into full ‘propaganda mode’ once he calls the Soviet Union a ‘state capitalist’ system.
You cannot call government ownership under a planned economy ‘capitalism’, and to the degree that the people of the Soviet Union elected their government officials (and those government officials then hired people to run the means of production), the Soviet Union was very similar to the Marxist utopia Dr. Wolff wants implemented. Calling the largest communist state in world history a bastion of free market libertarianism is a joke, so let us call the system the Soviet Union used a ‘Socialist Republic.’ ‘Socialist Republic’ is a far more precise term than is ‘State Capitalism,’ as it reflects the fact that elected officials acted on behalf of the public, to manage both the economy, and the individual workplace.
Capitalism is the opposite of central planning. Nothing that uses central planning can be called ‘capitalism,’ and the use of the phrase, ‘State Capitalism’ is nothing but a ploy to blame the hundreds of millions of people that died trying to implement Dr. Wolff’s dream, on something other than Dr. Wolff’s dream.
Let us be very clear – if the United States follows Dr. Wolff’s advice, the death toll will be incalculable. You won’t have to worry about me telling you ‘I told you so,’ however, as this blog will ensure that I am one of the first people sent to the gulag. And I believe in standing up for what is right, so I would be insulted if I was not sent to the gulag.
Dr. Wolff, in fairness, does not want a Socialist Republic. What Dr. Wolff suggests is that we move to a direct democratic socialist system in which the people within a particular company democratically decide every aspect of the company operations through an actual vote on every decision.
That’s actually been tried a number of times under free markets, and the companies that used direct democracy go out of business very quickly. They cannot compete in a free market.
There was a Marxist restaurant in Grand Rapids, Michigan, a few years ago. You can read about their story here. The employees would vote over such things as their wages, hours of operation, and who would do what jobs. The result was that it took forty minutes to get a sandwich, and could not make enough to pay its workers, in spite of the fact that patrons loved the food.
There are other companies, such as Harley Davidson, in which the employees own the company, and collectively hire a board of directors to run the company. This is more like a socialist republic at the micro level, but operating within a free market economy at the macro level, and there is nothing stopping a company from being operated that way. Those companies that operate that way have a mixed record. Some, like Harley Davidson, do well, but many others do not do well.
The point is that there is nothing stopping companies from running under Socialist Republic or Democratic Socialist rules, in free markets, other than the efficiency (or lack thereof) of those systems.
If you were to have a socialist system, as Dr. Wolff defines the word ‘socialism,’ you would have to have an election both to hire and to fire each employee in every company. Employees would be free to voluntarily leave the company they work for, to find work in other companies (and those other companies would have to vote on whether or not to hire them). Every aspect of business operations would also be subject to a vote – hours of operation, what products to make, who will perform each job (each day), etc..
The country would also have to vote to decide what companies to make – each new idea for a new company requiring an election. Whenever someone does not like a company, there would have to be a vote to decide whether or not to get rid of that company. And you would have to have some sort of enforcement mechanism to make sure people follow the mandates of the majority, both within individual companies, as well as at the macro level. Not only would the country as a whole need a gulag, but each company would need one as well.
That sounds somewhat cumbersome to me, and every attempt to create such a system fails, stalling at what Marx called the ‘Dictatorship of the Proletariat,’ which is supposed to be a temporary structure. The Dictatorship of the Proletariat has proven to be a permanent necessity of communism, as thus far no communist leader has been able to kill enough people to complete the transition. People, it turns out, are not ants…
Free market republics, with very limited governments. seem like a much better idea.
The Marxist I was debating continued the debate, but with ad hominem attacks. I was accused of misrepresenting what Dr. Wolff said (anyone who watches the video and who reads this article will see that I misrepresented nothing), and of debating in bad faith. I would have liked to have continued the discussion, but since we could not even agree on the definitions of the terms we were debating, and every attempt to find common ground, at least with regard to what those terms meant, turned into ad hominem attacks, I’m afraid the debate fell apart.
It seems that Marxists don’t like being pinned down with definitions. Doing so reminds them that they killed hundreds of millions of people, and apparently that hurts their feelings.
I still say that free market republics, with very limited governments, seem like a much better idea. We can have rational debates about how to take care of people who cannot work, and how to provide a minimum life style to those who do work. We can have rational debates about externalities – situations where the government may have a role in regulating the markets. The discussion, however, needs to be centered on free market dynamics, and not Marxism. This new rise of Marxist popularity should scare the hell out of every one of us, and we should fight it with everything we have.
Marx is considered an economist. As an economist, the defining line between socialism and capitalism is “the level of government control and ownership over the means of production”. Socialism and Nazism lean towards the same direction, greater government control and ownership over production. The fact that Nazis hated Socialists was an issue of a power struggle for government control between two factions on the same coin.
I do not know what someone needs in terms of credentials to be ‘considered’ and economist, but in Marx’ case, he had a law degree and a PhD in philosophy. He never studied economics, and made his observations without anything resembling a background in economics.
Karl Marx knew less about economics than did Groucho Marx.
Capitalism seems to simply refer to whom or what is utilizing the means of production which is the capital(whatever has the ability to be used in the production of the necessities and wants by the people under whatever type of society they may be living.) If they live under a ‘socialist State’ society then it would of course be the “State” utilizing the ‘capital’ in the operation under that system…thus the origination for the term State capitalism. If it were a ‘corporate State’ society the term Corporate capitalism might descriptively apply. The United States seems to have begun with a ‘free market capitalism’ largely operated by mercantilism, bankers and aristocrats of a landed gentry. So long as there was plenty of land to be developed as the population was increasing the ‘free market capitalism'(growing Middle class) seemed to provide economic opportunity for the people. Once the land was mostly owned, developed and limited…the original system began to morph into a combination of competitive capitalism increasingly regulated by growing government, which seemed to be a mixed economic system. Today it looks as though there is an increasing struggle between a long growing government(State capitalism) and the almost unnoticed increasing development of monopoly corporations(Corporate capitalism) as managed through Wall Street with increasing population aggravating the struggle.
Capital exists under any system, so i guess you could call communism ‘state capitalism’ if you want to, but using the word ‘capitalism’ To describe its opposite seems intentionally misleading.