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Capitalism and Socialism

The words "capitalism" and "socialism" are of recent origin in everyday speech -- as recent as the nineteenth and twentieth centuries. The words are generally misused by most individuals. One flagrant misuse occurs when no distinction is made between socialism and communism. Then the latter is used to designate state capitalism as contrasted with private-property capitalism.

The Soviet Union and the countries controlled by it (what was then East Germany, Poland, Czechoslovakia, Romania, and Hungary) were all capitalist countries in the descriptive sense. That is, they were all capital-intensive economies in the same way that the Western constitutional democracies are.

The difference between these two kinds of capital economies was that in the eastern bloc, state capitalism prevailed. As prescribed by the Marxists-Leninist doctrine, the private ownership of capital was abolished. All capital, agricultural as well as industrial, was owned by the state and was administered by the Communist Party. The political result was a totalitarian state -- no private economy and no private institutions. The economic aspect of the Western democracies involved the private ownership of capital and market economy.

Let us consider constitutional democracy as an ideal that the various countries in the West, as well as India and Japan in the Far East, approximate in different degrees. The ideal approximated can be stated as a society in which all adult human beings are political haves; all who have reached the age of consent are citizens with suffrage and have political liberty. They are governed with their own consent and have a voice in their own government. Citizens in public office have more political responsibilities to discharge and so have more power than ordinary citizens, but are equal as citizens.

The economic counter part of this political ideal is socialism. Socialism is an ideal, as democracy is, and it is approximated in varying degrees. As an ideal it is the economic face of political democracy. The ideal is approximated in a society in which all mature citizens are economic as well as political haves. It is a society with no economic have-nots -- no one deprived of a decent livelihood, to which every human being has a natural right.

In the same way that all citizens are political haves, they are all economic haves. That is why democracy and socialism are two faces of the same coin. Among the economic haves, some will have more and some less in terms of the contribution they make to the economy. But all are equal at the baseline in which all have enough to live a decent human life.

The mistake made by Marx and Lenin was thinking that abolishing the private ownership of capital was an indispensable step in the direction of the socialism ideal. On the contrary, private ownership of capital and a market economy are indispensable means to the socialism ideal. They are required for the production of enough wealth to distribute so that everyone's rights to a decent livelihood can be realized.

Though Marx and Lenin had the socialist ideal in mind, they took the wrong steps to realize it. They ended up with a totalitarian state in a failing, nonprosperous economy.

The End of the Conflict Between Capitalism and Communism
Haves Without Have-Nots (1991), Part One

Adapted from
Adler's Philosophical Dictionary (1995)



Revised 17 December 2000

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