Capitalising on Socialism

In the early days of my venture into the study of political theory, perhaps naively, in a trademark sitting-on-the-fence stance, I considered I would be in favour of a society which was ‘capitalist with a socialist smile’. For the stereotypes with which these opposing camps are identified, including in the eyes of those with capitalist leanings, capitalism is demonised, in the sense it is seen to be an uncaring way to organise society even if it is in truth a more efficient way to run the economy.

If we focus on the stereotypes for a moment, capitalism is seen to promote entrepreneurial success, but, the socialist will argue, neglects to reverse the fortunes of poorer sections of society (and some capitalists will agree with this, however claim it cannot be helped for the sake of a thriving economy.) The stereotype which comes down hard on the capitalist view implies it sustains a society in which ‘to those who have more will come’, or ‘money follows money’. Meanwhile socialism is perceived as redistributing wealth around the country fairly, compensating for disproportionately rewarded labour, but at the expense of wealth creation, since the competitive aspect of industry is lost, there being little incentive to work harder than ones neighbour when it is all distributed equally in any event.

I’m concentrating on the theory, because in practice I don’t think we can say either ideology has been proven successful or brought to its ideal despite what economists say about socialism having failed and had its day, or capitalism being said to be the reason for the ever-persistent chasm between rich and poor. There is something positive to be said about both stereotypes, and I can’t be the first to say ‘why can’t we have a balance?’ I assume the capitalist who cares would argue wealth trickles down and makes for a better society seeing as there is more wealth to trickle. But even if a communist or socialist utopia is an impossible dream, I wonder whether certain elements are still in some sense something to aim at, as a scientist might aim to create a clock which keeps time precisely with no room for error, even though this may be a physical impossibility. On the other hand, the strict socialist might concede it is unrealistic to force equality upon society as a whole with immediacy; and real incentives, a huge factor in business, depend upon the inequality of reward in some respects.

If you agree with the idea of balancing the two ideologies, the question is how does such a synthesis translate into economic policies? I think three main factors the answer could be based around are living standards, the state or government’s role in society, and money. Living standards are the greatest consideration of political endeavour. We can do without government and we can do without money, if living standards are high. Such a scenario may be unrealistic, but it stands to reason – it’s a bit like happiness, what is the value of your emotional health in the absence of the element of happiness? Similarly, I might ask if you had to do away with two of the three concerns I have suggested, which would you choose? I know I value my living standards above power or money. And the arena is politics, which is all about society’s wellbeing. In the meantime we need, or perhaps have to accept, political institutions because society is disorganised, and we have to accept money as a part of our lives because it is integral to the way we exchange goods and services.

But consider this: is government not a little bit like a police force? It only exists to counter something. We would prefer not to have a police force, because we would prefer there was no crime to prevent. Society only needs a powerful organisation such as a government to counter the disorganisation in society. I stress, I am not an anarchist, I don’t think we should do away with these organisations, they serve a purpose, its only I don’t think you can argue with the fact they only exist to solve problems, problems we would rather were not there, in which case we would not need to control them. Money has a slightly different role, but is equally unnecessary in the grand scheme of things. It’s very futuristic, or you might say outdated, to imagine a world without money. Without feeling you have to abandon the concept of finance completely, just ponder for a moment the essential purpose of money. It is a guarantee. It compensates for a lack of trust, or to clarify the precise value of goods and services. Without the existence of cash living standards would not be affected per se, because money does not contribute to wealth, it merely safeguards it. The value of a silver coin in a world without products or services is whatever jewellery you can melt it down to create. Money is theoretical wealth. The product or service is the important part.

So if higher living standards is the goal, money is the mechanism and the state is in control, then perhaps we can put political ideologies in perspective; money and power are not the guiding principles of a successful society, they are by-products of disorganisation. What we want are policies which put products and services higher up on the agenda than control of finance. Yes, finance is a practical aspect of the system, but it isn’t the end or objective, and neither is power, not at the expense of living standards. How do we place the product at the forefront of politics? The present gross inequalities of wealth suggest compensation for those with low living standards is only fair, therefore redistribution of a variety by a government is desirable. Money is an indication of, but only transient as a source for, actual wealth, because it only has a value with respect to a product, which implies capital gain is dependent upon goods and services, not the other way around, therefore wealth should not follow wealth as a matter of course. Markets enable people and businesses, though a system of finance, to barter for goods and services, and we would not want to do away with them, because they maintain the competitive element crucial to entrepreneurialism and lively industrial activity. There is no need to get rid of the economic mechanisms. The solution to societal economic inequality without causing stagnation in the market is to apply pressure to the mechanism in the right places, in the right manner, to the right extent.

A tool in the process of the correction of unequal economic circumstances is the tax system. In the absence of an ability to improve living standards with a wave of a wand, the government can only control the way the economy works by affecting the mechanism. But this is the important thing, it is with respect to the product or service revenue should be apportioned to businesses or organisations, not the financial achievements or the power held. The money has to go to the right places, in the right amount, on the basis of the quality of the product, and with an aim to provide incentives which tie services to other services, and motivate the creation of higher quality industries. Not higher taxation, but a more lively criteria for redistribution. Since the product is assumed to be the end, in theory we could lower taxes and still improve living standards, because high standards are the result of good labour, and good labour is encouraged by appropriate incentives. As long as people are living ‘below the poverty line’, to counteract where living standards are seriously adversely affected, money should be earned, not won, in the marketplace. Riches shouldn’t follow riches, but equally money shouldn’t follow poverty, it should follow goods and services, and proportionately to their practical value and standards of quality. Incentives bridge the gap between socialism and capitalism, by both levelling the playing field, and rewarding individuals' actions.




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