Capitalism versus socialism: it’s a knob setting, not an either/or.  Bernie probably didn’t help himself by stating his party as “Democratic Socialist” because the average voter here sees the word “socialist” and thinks “commie atheist mother hater.”

This just in: our society as a blended stew of capitalism and socialism.  Let’s discuss.

What’s in a name?

Socialism in its purest form as a type of government is often conflated with Communism and likely for good reason.  There are few truly socialist states remaining in the world, most notably China, Cuba, Lao, and Viet Nam and these are all run by parties called “something something communist party.”  There is in fact a blurry line between where socialism ends and communism begins.

The varied forms of pure socialism tend to respect democratic process for establishing the rules, whereas as communism is probably more authoritarian in those determinations.  But in all forms of socialism, the goal is for the government to spread the income around for the benefit of all, or as we pigeon-hole it today “wealth redistribution.”

Socialism in America

He have very many things which are currently socialized: police and fire protection, roads, parks, libraries, schools, the armed forces, the FBI, CIA, the census, social security administration, various bureaus, etc.  That said, we are also a capitalist economy in many other ways, and we’ve been taught “capitalism good socialism bad” with not much more nuance than that.

So what we need to decide is not whether we’re one or the other because we’re both.  We need to decide where to set the knobs.

Let’s take education. Currently the first 13 years are free.  After that you pay and pay dearly.  Why is 13 the magic number that we all accept?  Why not make the first couple years of college (or tech school) free too and set the knob at 15?  Or how about 17 free years and make university level schooling available to everyone?

It’s a point worth discussion.  Let me play devil’s advocate.  When I first got to college I was impressed with the higher level of competition.  Folks were there because they wanted to be, because they (or their parents) had paid for it, and things were much fiercer and competitive than high school. So I see a benefit in it costing money: you appreciate it more.

Now there’s always the possibility that it could be free but not be required like high school.  That might split the difference, not sure, we would likely have to try it for a couple generations.

Capitalism in America

Capitalism is widely viewed as a “no downside” economic engine and there’s a lot to recommend it.  But there are in fact many downsides.

We had to institute various laws against monopolies, laws regarding how to manage workers, laws regulating investments, and more, all to keep the playing field level and benefit the average guy.

We needed environmental regulation to keep businesses from dumping stuff in the rivers and air.  We needed regulations on cars to constrain their emissions.  If you don’t think this stuff is important, there are plenty of countries that do not have this yet and the air and water in certain cities is awful.  Look at Beijing (China), Santiago (Chile), and Mexico City to name the top 3.  When I was in Santiago in the summer the air burned our throats and the government had instituted the ham fisted program of “even number license plates drive on Monday, Wednesday, and Friday and odd number plates on the other days.”  It was crude but they knew they needed something.

It’s easy to forget how things used to be here because most of us have enjoyed a relatively clean environment in our lifetimes.  But it was not all that long ago (1969 to be exact) that the Cuyahoga River in Cleveland caught fire because it was so polluted.

So maybe, while capitalism is definitely an engine, it needs some checks and balances to protect the average guy from corporate greed and opportunism.

But Reagan was not a socialist!

Getting down to nuts and bolts and important issues, let’s take our own President Reagan.  He certainly wasn’t a traditional socialist.  He didn’t steal from the rich to help the poor, but he did dabble extensively in “wealth redistribution” which is one of the hallmarks of socialist governments and economies.

Oddly, he went the other way, increasing the tax burden on the poorer sectors of society and reducing the tax burden on the wealthy, a clear redistribution.  The wealthy continued to receive the same socialized benefits, police and fire protection, roads, libraries, etc.  But they paid less and less.  Small businesses suffered mightily and the top tax of 28% on the wealthiest was regressive compared to the top tax rate of 33% on the bracket below.

So while he was hardly a traditional “socialist”, his theories were quite socialist: by this wealth redistribution he was going to help the economy for the benefit of all.  He believed taking from the poor would counter-intuitively eventually better the situation for everyone.

His so-called “trickle down” economic policies continue to be tried today but there’s no evidence that they work and quite a number of cases where they apparently have not worked.  This doesn’t stop politicians from thinking “oh we just need to do them harder and then they’ll work.”  So trickle down economics is unfortunately not going away anytime soon apparently.  And neither is this uniquely American form of what I’ll call “reverse socialism.”

Where to set the knobs

In summary, let’s try to understand that’s it’s not some magic all-or-nothing either/or dichotomy.  The levers that control society have an infinite number of possible settings and the correct settings, as with most complex machinery, vary over time.  That’s why they are levers and not buttons.

Let’s have an intelligent, informed discussion about where to set the knobs and quit acting like “oh socialism makes people lazy” and “capitalism benefits everybody” and other overly simplistic statements.

There are many sides to each issue and there’s maybe an appropriate new knob setting we should try for specific things in our society.  Likely our military knob setting is too high.  We spend more on military then the next dozen countries combined.  Our public schools settings could probably get moved back up.  Everyone has strong feelings about education but the nut of it is we de-prioritize it when it comes to budget.

If one of these new knob settings doesn’t appear to be working, let’s adjust it, but not throw out the idea entirely and revert to a black and white worldview.