Socialism and capitalism are opposites. Socialism is an economic
system in which
the government owns or directly controls the means of
production. Socialism is based on force. Capitalism is an economic system in
which the means of production are privately owned and operated. Capitalism is
based on voluntary exchange. Some say that a blend of these two economic
systems is the solution to the world’s problems. They call for a “mixed
economy.” But mixing opposites is a recipe for disaster. Socialism (force)
and capitalism (voluntary exchange) are like oil and water, they do not mix.
Capitalism is the economic system that has created more
prosperity for more people than any economic system ever tried in the history
of mankind. Socialism, even when expertly administered has never created
prosperity. If you mix Capitalism (voluntary exchange) with Socialism (force)
you get a dysfunctional, special interest favoring, poor people exploiting,
unethical "third way" hybrid called Crony-Capitalism.
Broadly speaking there are two main types of socialism. Marxist
Socialism and National Socialism (and there are countless variations of each).
Marxism is the form of socialism in which the government assumes ownership of
the means of production, i.e. nationalization. This is the model that the
Soviet Union (Union of
Soviet Socialist Republics ), Cuba, North Korea, and
many other nations have embraced. Marx and Engels wrote about socialism as a
stage between capitalism and communism but in my opinion communism is simply a
political name for full-blown Marx-Style socialism.
National Socialism is the form of socialism in which the
government assumes control of the means of production without formally taking
ownership (think Post Office, Fannie Mae before it was nationalized, The
Student Loan Industry, the Federal Reserve, General Motors, and ObamaCare).
This is the type of socialism that was employed by Mussolini
in Italy and by Hitler in Germany. Mussolini didn’t want to call
his system socialism. He used the terms Corporatism and Fascism. Hitler’s party
was the National Socialist German Workers’ Party or NAZI Party for short.
Hitler also used the term Fascism to describe his version of socialism.
“We are socialists, we are enemies of today’s capitalistic
economic system for the exploitation of the economically weak, with its unfair
salaries, with its unseemly evaluation of a human being according to wealth and
property instead of responsibility and performance, and we are all determined
to destroy this system under all conditions.” —Adolf Hitler, [144] 1927 speech.
On paper socialism looks great. It looks like utopia. You simply
put a benevolent philosopher king into power and let him and his chosen few
centrally plan all things toward the “the greater good.” Unfortunately for
socialists everywhere socialism does not work in the real world, just ask the
North Koreans. The greater the percentage of the means of production that is
controlled by the government the lower the level of prosperity the people enjoy
(see Index of
Economic Freedom).
Those who argue for a “mixed economy” (a third way) are arguing for an inherently unstable and corrupt economic system because
capitalism and socialism are like oil and water. Capitalism is based on voluntary exchange. Socialism
is based on force. Liberty and force don't mix.
Capitalism (voluntary exchange under rule of law) is not perfect
but capitalism, even when poorly administered, is the economic system that has
created more prosperity for more people than any system ever tried in the
history of mankind. Socialism, (force) even when expertly administered had
never created prosperity. Socialism, whether Marxist or National has done more
harm to more people than any system ever tried in the history of the world. Our country is suffering, some say falling apart, because it is rapidly sliding down the slippery slope of socialism.
Mark VanSchuyver