I have heard the debate for my sixty plus years on this planet, regarding Capitalism and Socialism, and would be left adrift by the black and white, absolutisms, defining the characterizations of these two economic systems – if it were not for my own presumptuous common sense. Note: I am not an economist, save my own personal common sense. Which many will no doubt object too!
I will be very pithy in this blog, compartively speaking, based on my past ramblings: America is both capitalistic and socialistic within its approach to running economic policy. Neither economic position, i.e., Capitalism or Socialism is in and of itself is a panacea for perfection. Both systems fail miserably when implemented as standalone economic policies.
America has chosen wisely, to operate with the best of both economic philosophies as a hybrid of socialism (regulation) and capitalism. We have private enterprise, and ownership, but regulated to allow for competition from the startup’s and small ownership operations.
If any of you remember, when the J.P. Morgan’s and the Rockefellers nearly owned this country or complete industries, we had a situation that was true capitalism, whereby the most powerful could economically crush the small and the weak.
During the riotous times of establishing unions at the beginning of the 20th century, and with the help of the U.S. Congress in the 1930’s we implemented “Regulations” that subsidized the small businesses and rural land owners in order that they could both be provided services, i.e., telecommunications, and other utilities at rates far less than a free market would have allowed for. This regulated approach allowed for expansion and growth of so-called free markets within our great country. Free-markets are a misnomer, as they only exist because they are subsidized by the wealthier and more robust commercial operations, such as urban cities or highly consolidated industries produce.
In fact when the old “Ma Bell”, (telecommunications industry) said they would submit to regulation in the 1930’s, it was thought to be “capitalism heresy”, but it helped create a country with universal communications and services, not seen anywhere else in the world. Which by the way improved our national defense and overall security and fairness as a nation. As an example: It may have cost 10 million dollars to set up a communications switch in a rural town of only 200 people, which could never afford to pay for such a communication system in a life time, but due to “regulated monopolies” being established that took greater revenues from the business and urban clients and used the money to support “universal national communications” we succeeded with a socialistic methodology tied hand in hand with capitalism.
In a pure capitalistic society we would not of achieved the success we have produced, and would still be a land of King’s and Paupers. In equal contrast: In a socialist economy, we would be a lazy, un-incentivized and a mediocre society at best. It takes two to tango, and we did so by working with both economic models, those of capitalism and socialism. Taking the best of both worlds and philosophies…
To live with belief systems that are only black and white, to believe one system, or political party or economic philosophy is sacrosanct and always better than the other, is misguided and myopic thinking. We as a sound nation of sound values – are a coalition of taking the best of all worlds, philosophies and economics to find a stable, productive and realistic world. It is not always fair, but fairness is the objective, never a completely satisfied end.
Pragmatism is the order of the wise, just as absolutist, or black and white thinking – is the order of ignorance and of the self-serving.
Thank goodness we took the path of common sense, and not ideology, through much of this countries improved growth and development.
Both our capitalism and socialism are what has made this country great economically. Even so we are now faced with globalization, and that means consolidating our larger industries to become soundly and resolutely competitive abroad. This will put a wrinkle in our previous histories economic growth, but as long as we use both our heads and our hearts with liberty as our backbone, I hope we find the right mix of economic formulas to help lead the world to even better days of universal freedom and a fairer economic playing field for all.
If any of you reading this have an amplified view, I fully encourage you to enlighten me and others in amplifying both your knowledge of finance and your perspective… I certainly do not have all of the answers to fairness, which is probably a misnomer, in a world that feeds the strong off of the weak. But I can always hope we work towards a better model for all…
The world is a project in motion. To believe that a single philosophy will be an end-all – in an imperfect world – is to hope for the impossible. Even though that is the utopian goal we should always work towards. Albeit ubiquitous fairness and utopia, are not of this world… We should still – never quit trying.
At any rate, we are a combination of economic practices in this great country, and to deny that is to be naïve. Just as supporting any one or single economic philosophy is just as equally naïve…