Wednesday, October 29, 2014

Can socialism coexist with capitalism or are they oil and water?

I was asked to retweet the above if I agreed with it. I didn't, because I don't. I don't like the adversarial nature of it and the presumption that political choice is between two ideological extremes. For those of us of the Left the underlying presumption is that we are against capitalism and for socialism. It ain't necessarily so.

Modern economies are all mixed. They combine free enterprise with State intervention. Even that, on the face of it, most capitalist country, the United States, is a mixed economy as is every European state. The arguments surround the nature of the mixture - we are all to a greater or lesser extent Capitalists. Even the "People's Republic" of China is increasingly economically wedded to free enterprise.

Can socialism coexist with capitalism or are they oil and water? Successful social democracies, like Britain, show that you can operate well with private enterprise and public service working together. Sometimes there is overt cooperation, sometimes the two sectors work in parallel. Capitalism is part of the process of wealth creation. It allows for free enterprise, competition, innovation, market forces, investment, profit, dividends and so on. But for this to happen the State has to provide many things - a legal system, infrastructure, education, security and so on.

The State regulates capitalism. It creates standards within which private sector employers must work. Nobody would argue that the State shouldn't do this, it has that duty to its citizens. The State also does things that private enterprise could do but Government elects not to permit it to. Britain's roads could be privatised with tolls charged. The BBC could be sold off. And so on. Ideological capitalists would argue that the State should only be involved where a private sector solution is not possible. Ideological socialists argue for greater State ownership. The debate is not really "Either/Or" - it is where along the continuum from total Laisser-Faire, at one end, and total State control at the other a Nation sets itself.

Ed Miliband equates capitalism with injustice and argues that socialism is the response. This can happen and history teaches us that the State has frequently had to intervene to protect its citizens. But injustice can come from the State as well and sometimes it's free enterprise that has to intervene. It is over simplistic to chant the rather Orwellian "Socialism Good, Capitalism Bad"! Modern politicians tread the "Third Way" because they have to - although only Tony Blair claimed it as his own. Mr Miliband would do well to remember this unless he really does want to be seen as "Red Ed". 


At 2:12 am , Blogger Socialist said...

In my learned opinion you are wrong Paddy.

First it is clear the third was has failed. A good look at history and where we are now shows that. All the problems of capitalism (neo-liberalism) around inequality, poverty, crime, austerity, workers exploitation , alienation, the drug problem, wars, debt ,growth, economic crises and failing economies are getting worse. Capitalism is a system that produces all that, as well as any good benefits you attribute to it.

Because even under 3rd way capitalists and banks rule supreme and the system trickles money to the top 1% (wealthy). Any benefits previous social-democratic parties have introduced have been virtually eliminated. They are still capitalist economies run by Govts for capitalists and bankers. Its necessary for Govt to run schools, hospitals, roads, and welfare in third way or the capitalist would end up with no workers as they could not afford those services and therefore be unable to work or by the capitalist goods. The majority of workers can barely afford necessary living costs.

Second while capitalism is based on capital, competition and exploitation of the worker having created the benefits attributed to it , they are also the problems with capitalism. These attributes will always lead to injustice.

Capitalism can never be reformed it must be replaced with something different. Private ownership of wealth must be eliminated and a social form installed in whatever form the people decide.



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