Are Capitalism and Socialism Compatible?

By Patrick Brogan

On 4th May 1886, at least eight people died during a labour movement gathering at Haymarket Square, Chicago. The labour movement had been growing and industrial strikes were not uncommon at this time. It was proclaimed a couple years before that “eight hours shall constitute a legal day’s labor from and after May 1, 1886.” From our modern point of view, it is hard to imagine what general working conditions were like back then. Many workers didn’t see their 30th birthday as they were worked to death doing 12 and 14 and there are some examples of even 20-hour shifts. Children weren’t spared the rod neither. General conditions were appalling.

The calls for improved conditions were well over a 100 years-old by the time the proposals that 1st May was to be the start of the eight-hour working day. This is why May Day is so important for Socialists. It was neither the start nor finish of the ongoing battle for workers’ rights. During the ’86 riot, a bomb was thrown at police officers. Attacks such as this were something that would continue between the authorities and rioters. Blood split on both sides.

Henry Ford

There are many memes doing the rounds attributing to Henry Ford, the eight-hour working day, a five day week and weekends off. This is untrue. These were already brought in place after the Haymarket riot, but they were not properly enforced so the unions were still fighting for this to be a reality for millions of Americans. When Ford did bring in these policies, they were very much at his discretion and could be taken away when they no longer suited him or his company. They wouldn’t be enshrined into law for another two decades. Politifact has a great article on this.

Ford

However, what it did do was force a lot of companies to do something similar at that time. The Great Depression had a big impact on this and reversed a lot of what those companies implemented. This does show that unions and big companies can work together to improve worker’s rights when it’s in their interests. This can also benefit all of society. Capitalism and socialism are not mutually exclusive and actually benefit each other when done correctly. In order to understand this better, we must understand both concepts in their most basic forms, without the baggage both have been tarnished with.

Capitalism

Here is a short video explaining what it is in its rawest form;

 

Capitalism at its most basic level is about freedom and problem-solving. It leaves humans to their own devices. Humans follow their natural instincts and this leads to development and harmony in society. If society has a need for something, somebody smart or skilful enough will step in to provide it. The sometimes overbearing economic planning set out by governments is avoided, and problems are solved in a much more natural and fluid way. Everyone can own their own piece of property and thus avoid the serf system that undermined humanity for so long. There are principles in which Capitalism gives every member of society rights.

Critics and Corporatism

Capitalism has its critics. Most of this is focuses on the concentration of wealth. The theory is Capitalism will always lead to monopolies, much like we have today. This not necessarily the case. Laws could easily be introduced that prevent this from happening. Also, one of Capitalism’s most vocal cheerleaders, Adam Smith, was also concerned about this and warned measures would have to be taken to prevent greed over running the system. He wrote; “Society, cannot exist among those who are at all times ready to hurt and injure one another. What is the end of avarice and ambition. . . Wealth and greatness are mere trinkets of frivolous value no more able to procure ease of body or tranquillity of mind than the tweezers cases of the lover of toys.”

The main problem is that people confuse Capitalism with Corporatism, which is by and large the system we live under today. Everything is geared towards corporate interests. Trade deals like CETA and TTIP are a very obvious example of this. Capitalism has never really been tried for a prolonged period of time on a large scale. The best examples we have of societies using a purely Capitalist society are small scale experiments that had varying success.

If we look at human history, it has always been hierarchical. It went from a feudal system to one where corporations like the crown corporation and the East India Company became the dominant forces. From King to Corporation. This myth of a Capitalist society turning into a Corporatist one never happened. In fact, the opposite it has happened. We have gotten closer to what a truly Capitalist society looks like.

Socialism

Socialism has a similar branding issue to Capitalism. Many associate Socialism with Communism, and not just Communism, but the authoritarian Soviet standard. Socialism, like Capitalism, looks at the production and exchange of goods and services, whereas Capitalism says ownership should be in the hands of private individuals, Socialism says it should be in the hands of the state. There is a clear disconnect between what one of Socialism’s main proponents, Karl Marx, said and what is modern Socialism. Marx was clearly against the idea of humans being weighed down by bureaucracy and was no statist in that regard.

Marx’ main motivation was to free humanity from the constraints that shackled it, be they social, economic or personal. What happened in Communist USSR in his name would have horrified him. As Erich Fromme wrote; “Socialism, for Marx, is a society which permits the actualization of man’s essence, by overcoming his alienation. It is nothing less than creating the conditions for the truly free, rational, active and independent man; it is the fulfillment of the prophetic aim: the destruction of the idols.

“For Marx, the aim of socialism was freedom, but freedom in a much more radical sense than the existing democracy conceives of it-freedom in the sense of independence, which is based on man’s standing on his own feet, using his own powers and relating himself to the world productively. “Freedom,” said Marx, “is so much the essence of man that even its opponents realize it…. No man fights freedom; he fights at most the freedom of others. Every kind of freedom has therefore always existed, only at one time as a special privilege, another time as a universal right.””

As this site points out; “Any analysis of society and its problems must, according to Marx, start in an examination of its processes of production. All human societies have to be concerned, before anything else, with the production and distribution of the means of life. By using tools and instruments to effect changes in nature, humans are able to satisfy their material and other needs through productive labour. It is this activity which Marx saw as being at the base of all societies.”

Compatibility

Capitalism is often depicted as a system that leaves the most vulnerable in society behind to destitution and dereliction. We are told that Marx’ ideas are overbearing and negate basic human emotions. Neither of these are true because what we have in their stead are corrupted versions. Both of these ideas are based on bringing out the best in the human experience. Both proposed to make people responsible for fulfilling human needs. When we look at it in this way, both are far from at odds with each other. In fact, both offer the same solution, but in a varied format. Human cooperation is the best course of action.

The major problem is the gatekeepers. The standard bearers of these ideologies became corrupted long ago. A middle-class that doesn’t understand the challenges of poverty. Consider trade unions. They act as a business and forgot about workers’ rights long ago. They have become the very institutions they were set up to protect people from, i.e. a profit driven organisation. The incompatibility issue is easily addressed. As socialism tries to take control of production, it becomes authoritarian and Orwellian in nature. Why does the State need so much control?

The socialist part of the State should be used as a base. All the key needs that Marx spoke of should be provided. Food, clothing, housing. We can add in education and healthcare to the mix. If some private entity can offer a better alternative it should be allowed to so, but the State should provide the very basics to the highest of standards. If people have the means to pay for more, so be it.

This will act as a counter balance to anyone Capitalism leaves behind. Then it can concentrate on what it does best, problem-solving. Any additional needs that may arise, entrepreneurialism can solve without state interference. Basic regulations would be put in place to protect worker’ rights, food quality, environmental issues, et cetera, et cetera. This would create jobs and a tax base to provide for State run needs.

Accountability and Money Control

Like all systems, it is only natural that somebody will seek to come in and bend it for their own gains. We have seen this numerous times with both of these systems. The only way a hybrid, or any other system, can work is with proper accountability. The best way of doing this is a direct democracy system, something like they have in Switzerland. Also, another interesting method is something the ancient Athenians did. Any member of the public could stand before an assembly and report anything they felt was corruption and it would have to be investigated.

Money creation is also very important. The people who create money use it as a means of control and power. Money isn’t issued to those that may challenge the status quo. This may be overly simplistic, but it is hard to argue against more transparency being used in the creation of capital.

Co-op

A symbiosis of these would be akin to a co-op. If we take a supermarket for example. Everyone working there would be a member, thus, everyone has equal rights and pay in the store. There is no hierarchy. Everyone is incentivised to work hard for their own needs, but also for the greater good. If everyone was given an equal stake in society, everyone would work hard for the betterment of that society. This clearly isn’t the case. We have the worst of both. The greedy society Adam Smith warned of, a world of the 1% on one hand and the grinding central planning of the State on the other. Whereas we could have a society where the State prevents people rummaging around for food in bins and from a stable base people contribute their skills and ideas not only for their own benefit but for that of the wider society, too. It is impossible to argue against that sections of society need a hand up. Capitalism has lifted billions out of poverty. Why can’t we mix the best of that with a system that looks after the basic needs of food, shelter, education and so on?

 

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