Socialism
Categories: Tax
Some countries are considered “socialist,” but what does that term really mean...as it is so reviled on the Right and gently embraced on the Left?
Socialism implies common ownership of the means of production. Take a factory, for instance. Instead of the hard-working, motivated gal who went to business school, got a loan from the bank, and built her awesome glassware-etching-company owning the factory, the machines inside the factory, and all the tools the workers use...the public owns it. Doesn't matter who took risk or worked hard or was lucky or whatever factors came into play, all the business is owned by "everyone."
It’s a political economy term, since it has to do with both politics (the government) and the economy (sharing the wealth).
In today's reality, that implies that the government owns the means of production. Switch out Hard-Working Penny with Uncle Sam. This is where socialism stops short of communism: communism is where the means of production are publicly owned, but there is also no government, since communism is a classless, stateless (no Uncle Sam), and moneyless society (and we mean no stores of wealth, unlike a Bitcoin Society).
In a strictly socialist system, production and distribution of all goods and services are planned. People would work according to their abilities, and they would get what they get according to their needs. But most “socialist” countries in Europe fall short of this, since global capitalism is what makes the world go around these days. Instead, the government owns the means of production of some industries or companies, but market forces are still determining production levels.
Governments don't pre-plan production volumes and then just build to them as if the government bureaucrats are, in fact, "smarter" than the markets. Common ownership of the means of production under socialism can be done different ways: a technocratic system, a democratic one, oligarchic...we could go on.
What’s the point of public ownership of the means of production? In a word, equity. If everyone’s working their butts off, then everyone should get an equitable share of the pie. This notion, often supported by the Left, ignores the fact that people are...different. They are born with different levels of talent and brains; they are born with different levels of entitlement; they are born with different levels of drive and willingness to sacrifice for future success.
Promoters of socialism see capitalism as the exploitation of the working class for the wealthy. They point out that, with today’s resources and output, world poverty could be solved...if only we were more share-y and less exploitative. And they presume that governments will act in a non-corrupt manner. Hi there, Old Soviet Union! We're winkin' at ya.
Critics of socialism see it as antithetical to market forces. They ask, "What’s the incentive to create new stuff and work hard if there’s no chance of moving up the corporate ladder?" We would never have gotten to the dominant technocracy under which the U.S. lives today without the incentives capitalism provides.
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Finance: What is capitalism?7 Views
And finance Allah shmoop What is capitalism Oh well there
are really two faces of capitalism you know kind of
like Aria on game of thrones Yeah or like any
little kid trick or treating in Halloween or you know
two face So let's start with what capitalism is not
Hello Communism Yes your darkness our old friend Communism is
all about the government being quote smarter than the market's
unquote that is Communism believes that via central planning in
estimating and bureaucratic controls the markets for pretty much anything
can be run better fairer and more efficiently than by
its polar opposite cousin capitalism That's the economic application to
the political will that under a communist system politically everyone
is equal fish you know two cellphones good for cellphones
bad Something like that Whereas communism is a frank instant
ian attempt at cloning in or reproducing life in a
lab and then copying it market by market locale by
locale capitalism is well financial Darwinism Survival of the financially
fittest More or less Communism failed globally in hindsight that
so much for its ideology of governments controlling things But
for the one little element that was never addressed in
the Soviet laboratories where communism was at that element Yes
corruption Yeah When central planning happens enormous power is concentrated
among a very small number of individuals usually individuals who
came to power through Machiavellian means often military or other
yes men Grey flannel suit wearers not through believers in
a cause innovators visionaries or business runners So the very
powerful became very corrupt and the ideology of political communism
I'LL never really came to be tested on a global
stage fairly and squarely where it has been tested and
works has been in tiny enclaves with rare compositions Take
the Kibbutz in Israel Well a kibbutz is a collective
farm Everyone shares equally and well pretty much everything The
farm produces one for all and all for one like
Israeli Musketeers or something like that The big diff Well
they're all equally well educated They're all from the same
background same culture same unfortunate run ins with boils So
it's easy to divvy things equally when you feel like
the guy or gal across the table was truly equal
to you In talent and drive and other natural gifts
you get two cell phones and you get to cell
phones and you get two cell phones Yeah all equal
And yeah a kibbutz structure would never work in a
large city where the disparity and talent is usually massive
from top to bottom So where does that put capitalism
Well structurally capitalism refers most directly to a frictionless set
of transactions No controls no governing no government just perfect
markets where supply and demand intersect here and prices live
within nana meters of here There isn't the kind of
one person can change everything kind of corruption that you
get in a central bank or central allocation system The
capital markets the brutal Darwinism of companies competing in the
marketplace gives a kind of truth or honesty or really
quote fair unquote price that applies more or less everywhere
in the system At its most extreme we witness capitalism
at work in the stock market At any given moment
tens of thousands of investors are inspecting what Amazon is
really worth and letting their investing dollars speak for themselves
The trading of stocks is almost a perfect market with
no central government dictating what it thinks Amazon should be
Trading at two thirty p M On a Tuesday in
a communist stock market While the government might dictate that
well today Amazon should trade for fifteen hundred twelve dollars
a share and for a ten dollar fee per share
trade paid to the government trader you too can be
a proud owner but that's the price Fifteen hundred twelve
bucks Take it or leave it Communism in this sense
runs is a kind of command economy That said the
U S Is not a perfect capitalistic set of markets
either It's just a relatively capitalistic approach to transacting in
mark but when compared with other systems of commerce in
the US we have laws they're actively in fourth and
violators are punished severely and this has been going on
for centuries The positive result Trust in general Investors around
the world trust in the American capital market system They
trust that accounting and financial disclosures are fair and full
and honest Just remember that capitalism is financial Darwinism under
the fair rubric of laws and structures analogous to what
biology and physics and geographic location due to the evolution
of species of animals cos that best fit their contemporaneously
environment thrive and those that don't well don't and somewhere
Toys R Us and the Dodo Bird are living happily
ever after together you know along with Sears and soon
target in a whole bunch of others that'LL be Amazon