Here are some simplistic reflections about the fairly common black and white characterization of capitalism vs. communism/socialism. Sometimes simple perspectives, if we keep in mind that the omitted details are what people actually live, can provide some useful insights.
The core ideas of capitalism are that unrestrained supply and demand will naturally lead to lower prices, better products, and a small but persistent level of unemployment. Some small level of unemployment is necessary, otherwise scarce labor will lead to a “seller’s market” inflating the cost of labor which decreases profit and increases prices for consumers. High unemployment doesn’t allow people to buy enough products and services to fuel the economy. So over time a capitalist economy supposedly stabilizes itself with relatively low unemployment and prices. Intervention by those with a particular economic interest will tend to de-stabilize the natural balancing of supply and demand of market capitalism. A “free market economy” is a “natural” process.
One irony of this view is that a “free market economy” supposedly operates successfully so long as we don’t intervene by making choices about the economy, only about what we make, sell, and buy. We are supposed to relinquish control of the economic processes of the market, placing our faith in the long-term processes of “the silent hand of capitalism.” But we can’t buy or make whatever we want, nor count on being employed. We are restrained by supply and demand and a certain amount of unemployment is necessary, according to the basics of classic capitalist theory. So in a “free market economy” we are restrained as producers and as laborers by the economic system itself and there is nothing we should change about the system even if we find ourselves at a disadvantage. Since it is a “natural” process we should accept it like we accept the weather. In ideal “free market capitalism” we aren’t free as buyers, sellers, producers, or laborers. Neither are we free as democratic decision-makers when it comes to the basic operation of the economy. Our choices are restrained by an autonomously operating system that by design we shouldn’t make choices about.
Nothing initially could seem more opposite than the communist ideal of a centrally planned economy. If capitalism is a “natural” process then communism is the extreme of an “unnatural” process, i.e., one that operates according to deliberate rational “free” choices made by people rather than the “natural” forces of competition and supply and demand. One irony is that for these choices to be made and implemented, only those in a position to make economic choices are free decision-makers. The more the decisions are made democratically the less central planning can be implemented. The freedom of being a rational choice-maker about the economy cannot be extended to everyone. For most, the economy will operate as if it is as autonomous as a capitalist system.
Both pure capitalism and pure communism have failed. Capitalist systems have had to protect the system against monopoly interests and avoid the desperation of those thrown out of work due to the “natural” and inevitable processes of success and failure of businesses. Markets quickly became so complex that producers can manipulate supply and demand. The products that sell are often the ones chosen by producers to distribute and advertise rather than the products that are the best. The innovation supposedly stimulated by competition can be stifled by the difficulty of introducing new products into established markets, and by the lack of resources of small producers. So some control over the economy is necessary to stabilize the society, protect innovation, and ensure competition doesn’t become squashed before it begins.
Likewise, communism has led to the corruption that can come from the centralization of power. The ability to predict and control economic processes erodes as economies become more complex and varied. Innovation can be ruled out by central planners who aren’t in touch with the changing needs of the people. It is too easy for economic classes to divide into affluent decision-makers and poor laborers. Capitalist mechanisms have been necessary to introduce into communist systems to increase incentive, innovation, and to avoid all economic decisions being made by an elite social class.
The black and white, capitalism vs communism (or socialism, which for expediency I won’t go into here) view of the world did not work nor have countries actually tried to maintain them in their pure form for decades, in some cases for nearly a century. The political right in the U.S. cannot and does not advocate for pure capitalism. The political left in the U.S. cannot and does not advocate for pure communism or socialism. Which policies work best under what conditions changes over time and are better decided by looking at practical circumstances than ideologies. Most people know this, yet many also seem motivated to forget.
Advocating for strict capitalism or communism/socialism is like saying you’ll only have one relationship to which you will devote all your time and resources, or you’ll be a hermit. Family, friends, or aquainces to which you might have varying commitments are out of the question. If we tried to follow such a plan we’d go mad and be alone whether we wanted to be or not. Yet many people seem to reject the possibility of a blend of capitalist and communist ideals, as if unconditional and exclusive love for one or the other are the only political commitments possible. Obsession with capitalism or communism is like believing that stalking someone and making a shrine to them in your bedroom is the only way to have a healthy relationship.
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