From our very beginnings of our nation, our society has been built on a foundation of capitalism, an economic system based on the private ownership of the means of production and their operation for profit. The same economic model developed in all nations of western Europe. Inevitably, some people fell behind in the competition, and a large underclass began to develop. In the 19th century Karl Marx attacked capitalism in his seminal work, Das Kapital, and later his disciples attempted to apply his socialistic theories of government as they established communist states around the world. None of these nations evolved into the sort of workers’ paradise envisioned by Marx. Instead, most of them became brutal dictatorships.
Despite the bad aroma associated with the communist version of socialism, there are many on the left who rail against our capitalist economy and insist that we turn to some form of socialism. Their voices are particularly loud among some academics and left-wing politicians. Unfortunately, as the philosopher Santayana wrote, “Those who cannot learn from history are doomed to repeat it.”
Winston Churchill once stated that the chief problem with capitalism is “the unequal distribution of wealth.” But ending capitalism will not end poverty. No matter what economic system we devise, there are some individuals who cannot make it. Somehow, for whatever reason, they fall by the wayside. As Jesus said “You will always have the poor with you . . .” As a humane society, we must reach out to these unfortunate individuals with a helping hand.
As stated above, there are those who believe that capitalism itself is the problem and that we should seek a more equitable economic system to ensure fairer division of the fruits of our labor. Socialism is usually touted as the solution. But, as Churchill wisely observed, the chief problem with socialism is “the equal distribution of misery.”
Socialism is contrary to human nature. What a man earns by the sweat of his brow or through his intellect he likes to think of as his own. He is willing to share a portion of his earnings to help a neighbor or to further the common good, but he believes that portion should kept reasonably small – perhaps no more than 30%. On the other hand, socialists tend to think of all income and all goods as being products of the state and therefore subject to equitable distribution by the government. This means taking from the high earners and adding to the income of the low earners, and the only way to ensure that happens is to increase the size and power of the central government. In true socialistic systems, the Government takes over the factories, railroads, power companies, etc., and virtually everyone becomes an employee of the state. Of course, there are gradations of socialism, but all such systems tend in the same direction. There is a gradual loss of freedom.
Capitalism is based on human nature. People work harder for themselves and for their families. They are driven to accumulate wealth and goods, whereas communal endeavors are not as attractive. A state economy based on capitalism is far more productive than a socialistic economy of a similar size, and capitalistic innovation often runs rampant. A leisure class can develop, leading to a flourishing of culture and the arts. Inevitably, because of the difference in ambitions, abilities, and circumstances, some persons acquire great wealth, whereas others fall behind. Graduated income taxes, social welfare and other programs are required to ease social tensions created by the disparities in income; and even greater adjustments may be needed from time to time.
For socialism to work, citizens of a state would need to be totally unselfish individuals fully committed to the commune – virtual automatons. That is an unrealistic and frightening vision, and in real life it does not happen that way. Instead, power gradually accumulates in the hands of the strong, and the socialist masters become the dictators.
Capitalism has its problems, but it has been more successful than any other economic system in creating more wealth for more people. And, when leavened with the Christian ideals of kindness and charity, it promotes freedom and social progress.