“Capitalism vs. Socialism” finally and permanently discredited.

Sign – Say No to Socialism Photograph taken at the Idaho State Capitol Building in Boise, Idaho during the April 2009 Tea Party Rally. The “socialism vs. capitalism” rhetoric is more damaging to our grandchildren’s future, including the idea that we could “say no” to one or the other.

What could be more important to us than organizing human behavior? Well perhaps pure abstract knowledge and discovery. However, leaving that aside for now, lets focus on organization of human behavior. Companies, nations, universities, institutions, economies, and ecosystems. Families and communities. Foundations and corporations. How should they be run and what should they do? How can we work towards responsible stewardship of our resources? How can we ensure the survival of our body, life on Earth, and voyage to the stars? How can we best enable the pursuit of happiness?

All this is important stuff I imagine you agree dear reader. Well then, we ought to be discussing these things and thinking about them, and making progress in our ideas. Sometimes however, we are prone to get stuck. These discussions run into dead ends and despite pushing and pulling on the ideas and systems we simply stop making progress. Scary stuff. The rhetoric of “capitalism vs. socialism” is one of these instances, where it seems we have been stuck for a century or so, and so we will endeavor to finally and permanently discredit this type of rhetoric here, and point towards a better way forward.

You’ve probably been exposed to this rhetoric, from “both sides”. You’ve seen people whose identities have been formed around these words as somehow being enemies, whose platforms and textbooks and classes are structured around pushing or pulling in one way or another as though there were really a struggle between two ends. We blame one of these two categories of schools of thought for problems of misallocation of resources and mismanagement, poverty and destruction, and also we raise one of them as hope for salvation, crediting it for great works of humanity. Because of all the century of history of supposed conflict in intellectual discourse, we may be somewhat afraid to see this rhetoric of C vs. S tumble and fall, but don’t fear! In fact the meanings of these words can stand strong and the work which has been accomplished in laying out foundations and philosophy of these concepts is important useful work towards a better future. It is only the perceived struggle between them that must fall.

So lets get started.

If a physics theory were wrong, would we hold signs saying “physics doesn’t work”? How about “lets fix capitalism” instead? And physics too while we’re at it?

Some of you might guess that we will attack this C vs. S rhetoric on the basis of its ambiguity. While its true that there is quite a lot of ambiguity in these terms, and many argue their grey area and precise definition, that is not the final discrediting we seek. Nearly all identifying words and symbols have some ambiguity in use, and yet still this does not stop us from using them to create useful labels and fight battles. The ambiguity of these terms is a start, and the different definitions used by different authors is telling as to some of the problems with this story, but there are two much stronger logical issues which make up the bulk of our argument.

1 – All institutions, economies, corporations, and nations contain and always will contain elements of both capitalism and socialism, both crucial to their survival and efficiency.

Many people say “nobody’s ever tried pure socialism” or “nobody ‘s ever tried pure capitalism”, and of course they are right. Humans are social animals and individuals at the same time, and always will be. While many refer to the United States as “A capitalist nation” (a phrase which is arguably oxymoronic), we all understand that the United States also is in a large part shaped by socialist institutions, like the military, the coast guard, the national parks, the department of education, the federal reserve, NASA, and so on. Even if we adopt a definition of these terms for which we disagree that one or another of these institutions is really socialist, we cannot deny that “We the People” has a very socialist ring to it, especially seeing as government has some influence on means of production. Meanwhile China is referred to by many as a socialist nation, but we also all understand that many parts of the infrastructure are run by capitalist institutions. Markets, investors, wealthy individuals, real estate developers, and economic freedom to open a billion storefronts every day, with an incentive present of personal wealth, are crucial to the survival and success of the nation and the people. In fact I believe most Americans after spending an hour in a Chinese city would believe China to be more capitalist than the US, because of the much greater freedom to start and run businesses without licenses, zoning permits, and the like.

There cannot be any denying that elements of both socialism and capitalism are essential in good governance and organization.

That being said, though perhaps not digested, lets move on to a second logical blow to our battle over a false dichotomy:

2 – Every individual human behavior or act can be viewed as motivated both by capitalism and by socialism.

This point is perhaps more subtle, but it is worth making, as it represents pulling out the roots of this stuck rhetoric so it cannot grow again. So we consider a few examples.

One example is the behavior of people trading in a stock market. Certainly a capitalist behavior wouldn’t you agree? Well the stock market is also to some extent public ownership of companies (companies with shares on the stock markets are called “publicly owned companies”). Ownership of the means of production by the people. You can see that from another viewpoint it can be viewed as a socialist behavior.

Another example is that of giving directions to a stranger in the street who asks for help finding an address. Because no money and no promise of goods or services is offered, we might view the act of helping this stranger as a socialist behavior. However, we could also view the act as “selfish”, in that the person giving the directions is trying to feel better, or trying to strengthen the community so that their own life will be better, or even improving their own karma. Giving proper directions to a stranger improves the social well being which further improves our individual chances to survive and get ahead.

We might view a truck driver going north with Georgia peaches as doing so solely for the paycheck they will receive, a capitalist viewpoint. However we could also view their behavior as motivated by a social desire to help the community have better fruit and health, while the paycheck is a necessary and important gesture for the work to continue.

A landlord evicting her tenant might seem from one viewpoint like a very capitalist act. However one could also view this as a landlord trying to improve the health of their social community by replacing a less productive member of the community with a more productive member.

A capitalist viewpoint might point that people do things only for profit. A socialist viewpoint might be that most of real profit is social, as money is a social system – obtained for status, power, and material goods to be used in a social context.

Perhaps one or the other “viewpoint” in the above examples seems strained to us, but none the less we cannot deny that the viewpoint exists. In fact we can go still further and remain consistent with a stronger example of changing viewpoints as follows:

Capitalism is a type of Socialism.

Socialism is a system of governance or organization in which the means of production are controlled by the people; in which things are done for the good of society, with a view towards equality at some level. One way to carry out this ideal is to use a sub-system of trade, price discovery, and individual incentives to enable people to best participate in the socialism and make the logistics work (such as selecting prices for trade). We will call this sub-system “capitalism”.

Socialism is a type of Capitalism

Capitalism is a system of governance or organization in which individuals act on their own to better their own lives, taking ownership the means of production. To best perform said betterment, it behooves the capitalists to ensure that basic services and social structures are present, so that individuals can make their capitalist and consumer choices properly. They can employ a sub-system called “socialism” to improve and form a solid foundation for their capitalist system.

Do these two bold arguments seem inconsistent? They aren’t really. Consider that biology is a branch of physics, in that all the behavior of the atoms in a biological system are described by physics. And yet physics is a branch of biology, in that physicists study models of the world around them as observed by and as explainable by the human brain, a biological system. Proper categorization depends on context, and context can shift. We should not be tempted to fight battles of Physics vs. Biology in which we push for ONLY one or the other to survive. Those who choose to improve physics do not do so by holding signs saying “END BIOLOGY”.

Moving Forward

In some sense, our attempts to organize our behaviors have been like a driver of a car, with imperfect tires and gas tank not quite full. Rather than attempt to fill the tank, and improve the tires, we have aligned ourselves as “anti-tires” or “anti-gas” and put great effort into seeing a future car with no tires or no gas. This must be put to a stop if we are to progress in our governance and organization capabilities. We need our capitalists to focus on fixing our capitalism and our socialists to focus on fixing our socialism. There is much work to be done.

Capitalism is broken

If I said that physics was broken, would you assume that I meant that it was a bad idea to ever study physics? No, you would probably assume that I was talking about some specific theory in physics which didn’t work for some reason. After all, physics is a series of approximations. One can almost always find a place in which this or that law doesn’t quite work. In the same vein, we need our philosophers, leaders, educators, and teachers, to consider how to make our capitalism work better, not to eliminate it, as that would be an impossible and misguided goal.

The theoretical potential of individuals acting in their own interest to create an efficiency of resource allocation is real. Clearly, we seek and carry out trade, and clearly trade requires price discovery. I hardly need to reference the philosophers going back millenia who have stated this much better than I have. So how are we doing? Well pretty fucking terribly. Prices vary by orders of magnitude based on location and access, demonstrating that free market arbitrage is nearly nonexistent. It’s so bad that many people claim the black markets are the only free markets, an irony that merits reflection. People are prevented from moving goods and services and even their own bodies from place to place, by border orcs demanding “papers please”, in clear violation of the UN declaration of human rights. This has become so regular that we mostly just accept it as a fact of life. Investment shows promise of allowing intelligent people to allocate resources, but often people are pushed into “index funds” and investments go to the biggest companies removing the benefit of consumer choice in allocating resources and enabling gross mismanagement.

Despite the supposedly total universal knowledge of basic economics such as supply and demand, there are almost no shops which adjust prices rapidly with supply (airline tickets being one notable exception). People use fiat currencies to price goods, currencies which are issued at no cost, giving issuers to ability to control any prices they wish – eliminating the potential of capitalist systems to function. Monopolies form and enforce price structures with violence. How is that for some problems with our capitalism? We should get cracking on that. Not easy problems, but worth addressing don’t you think? Oddly enough, many of the best commentaries on the problems of capitalism have been published by people considered as “socialist”, an odd situation where deep and intense study of one field makes people call you an expert in another field.

Obviously we have only begun to scratch the surface here of problems in our attempts to implement capitalism and free markets.

Socialism is Broken

The tragedy of the commons. Well one tragedy is that there aren’t enough commons. Another is that people are quick to mess them up, thinking they can get away with it because the commons don’t belong to anyone. It’s nonsense of course, and our society needs to shun such actions as taboo, but we aren’t quite cutting it, as you can tell by the messes we are making. Do we need regulations you think? Well yeah, but there’s the problem of regulatory capture. Everything we try to regulate requires selecting a regulator, and now the regulator “captures” or controls the activity they were supposed to regulate, enabling the activity to continue with new bosses. In other words: corruption is rampant. A lot of our socialist systems are plagued with corruption, and playing whack-a-mole catching this or that corrupt politician or embezzling official doesn’t seem to be working. We need to use public systems that don’t allow the embezzling and secret corruption to occur. Are we doing that? Not really. We are using privately issued currency to pay bribes to regulators working with policemen who forbid use of cameras. Even attempting to allow the people to know the law is illegal, as Aaron Schwartz found out. Pretty broken wouldn’t you agree?

Again, we only scratch the surface here. Good socialists need to examine the problems and define metrics to describe how we are doing and to decide how we can improve.

A final argument

Perhaps you are still with me, but holding on to some idea that maybe socialism or capitalism could win this fight, that the “merger” and “working together” nonsense in this article is wrong somehow. Great! Perhaps you are one who would like to “End socialism”. Very nice.

Now tell me what it will look like when socialism has been ended. What will be different? What will it look like? Perhaps nations are gone, all land and services are privatized.. no more public beaches.. no regulations? But wait, what will be using to organize our new private beaches? What will be our money? Our language? Seeing as we are using money, language, and beaches, could we perhaps argue that there is some socialism going on here? Those things after all are useful in that they are equal for all individuals, and not totally owned by any individual. Can you prove me wrong by somehow envisioning a society without socialism? Probably not, because it’s not socialism that is the problem, but broken socialism that doesn’t work. We need to fix it, not end it.

Or maybe you are the one who thinks we can end capitalism? Great! The argument works for you as well. What will it look like when we did it? How will we know we finally ended capitalism? Even in the star trek borg, there are individuals, who might seek to better their status, even if its just for the purpose of strengthening the collective. You can’t really have “no capitalism”. In the end, an individual needs to eat and the food therefore can be called theirs. Sure, there are huge problems with different supposed attempts to implement capitalist systems. There are problems with physics too, and yet it would seem strange to suggest “end physics”. We don’t need to end capitalism, we need to actually implement it correctly.


Now that we have this “captialism vs. socialism” nonsense behind us, we can move forward towards fixing our organizational structures. Capitalists will focus on analyzing capitalist systems, how to fix them, how to manage and understand and index them. Can we have some reasonable markets please? Maybe some rational price discovery pretty please? Maybe a measurement of how we are doing will help. Socialists will focus on analyzing socialist systems, how to fix them, how to manage and understand and index them. How much corruption is possible in our governance systems, can we quantify this? Maybe some shared spaces and basic support structures for life on earth to continue, pretty please?

Or we could just continue as is and half of us will say “fuck gas tanks” while the other half says “end tires” as we stand around next to a stuck vehicle. Well OK, there is a cooler of beer in the back so maybe that’s what we want to do here anyway?

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