Thoughts, facts, opinions

Snippets of thoughts, quick notes, sources of what might appear in a more complete way on my website - www.venedi.com

Sunday, January 30, 2011

Socialism and free-enterprise compared

A few weeks back at the Seattle Transpartisan meetup I was asked to compare life under the now-defunct socialist system in Poland and the capitalism of the United States. My speech was quite lucid and here it is more or less from memory.

First let me clarify the terminology. The term capitalism is rather outdated and would rather characterize the US system as free-enterprise market system. Capitalism refers to accumulation of capital occurring in the 19-th century that had produced rapid and disruptive industrialization in Europe and the US.

Let me begin with the political dimension, the dimension of the source of coercive authority. In socialism we are owned by the government, gov grants us our rights and nominates itself as their protector. We are subjects for the government which is taking care of the direction of the nation. The government arrogates to itself the right to determine our future as a nation and we are just the matter from which the nation is shaped. In the US we have rights which are inalienable - the government is owned by us in order to protect our rights. We are active constituents of the nation and decide to create the government as a common system of protection for us individuals and our goals. The government has no other independent goal than that. The way that it is implemented looks like execution of authority in situations requiring administration of justice, use of common resources, for example, while the source of the authority is the people.

As for the economic dimension, in free-enterprise system the individuals are free agents who conduct independent economic activity. The government is to ensure the honesty of economic relations and the market is the system of exchange of goods and work. The government is supposed to define and protect the markets for various types of exchanges. The individuals are the principal economic agents and are free to create associations dedicated to economic activity known as corporations. Internally such corporations can be organized in any way they wish as they are private entities and express the individual rights. However, they have a goal - typically economic and their employees and resources are subordinated to this goal unlike the citizens of a nation. In socialism the state is the principal economic agent and individuals in it are like employees of a huge corporation. The socialist state typically has a complex goal set somewhat arbitrarily by the government and its realization is subject to planning. The state is operating like a huge and complex corporation. As a kind of employees the individuals are a liability and cost of this corporation. They have to justify what they earn by arguing up the size of their contribution to the common goal. This creates a privilege distribution system with various trades getting their special favors - e.g. coal miners in Poland. Socialism gravitates to a feudal system while in practice it often looks that we must kiss up to or bribe someone higher up to grant us privileges.

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