Capitalism vs. Socialism

The initial usage of the term "capitalism" in its modern sense has been attributed to Louis Blanc in 1850 ("What I call 'capitalism' that is to say the appropriation of capital by some to the exclusion of others") and Pierre-Joseph Proudhon in 1861 ("Economic and social regime in which capital, the source of income, does not generally belong to those who make it work through their labour"). This was however a miscarriage of language that needs to be called out.

Capitalism - Most people have capitalistic traits. We want to get rich with our labor, earn a profit on trade or be compensated for advice. Others are willing to rob banks, bribe the bureaucracy, accept bribes in the bureaucracy or become lavish dictators of the poorest countries.  The harm from unbridled capitalism is well alluded to in the literature. But what is the best means to tame and bridle this selfish tendency? I would propose that the Free Enterprise system is the best bet against such harmful capitalism. In such a system, numerous free enterprises are forced compete to do good for individuals and other enterprises and offer services with minimal wastage of resources. Enterprises that cheat are exposed and can be boycotted (because there are alternatives). Inefficient enterprises emulate more efficient enterprises to succeed. This leads to bounty, generosity and the best social outcomes. A free enterprise system is antithetical to unbridled capitalism. While capitalists demands government protection and special operating privileges at the expense of the consumer, a Free enterprise system ensures that none are granted. It is therefore ironic that the free enterprise system came to be called capitalistic when it is the free enterprise that best protects a society from unrestrained greed and corruption of the few.

Socialism - Most people also have socialistic traits. They help their neighbors move, watch out for other children, help employees in difficult circumstance, give to charity and food banks and scholarships and volunteer in disasters.  Helping our society and moderation of consumption is noble in all societies. Collectivism, on the other hand, is a system that forces people to part with the fruits of their time and labor and concentrates it in the hand of few bureaucratic managers who have scant incentive to utilize it efficiently (and no clear repercussions if they don't) and where any competing enterprise is crushed. People have no alternatives to government run services - no matter their cost or quality. History dictates that tyrants coalesce at the helm of such societies, abet one another and live lavishly while the vast population lives in abject poverty. It is an irony of all ironies that collectivism christened itself socialism; when collectivism itself serves to destroy the ability and incentive of people to serve others in a society.

Capitalism and Socialism are poor word choices for terms given to economic systems (the free enterprise and collectivist systems respectively). Because they attribute an intent to various systems. Economic Systems don't have intents - people do. And the people are the same whether they are  in the free enterprise system or the collectivist system - they have similar intentions. The question is which system maximizes the capitalistic traits of people and which maximizes the socialistic traits.

 

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