Friday, 7 February 2014

Capitalism or Communism?

The polarisation of this question generally provides only the answer the particular protagonist wants and that is an absolute. Sadly this always masks several important points, one being that neither is actually 'perfect' for everyone or for every economy. Both have serious flaws in practice. So I was recently very pleased to see the following answer to an online debate.
Eivind Kjørstad, 
Communism and Capitalism are abstract ideas. None of them can function in a hypothethical "pure" form, because both of them carry in them the seed to their own destruction: "pure" capitalism unhampered by restrictions or government oversight would lead to crises and excesses that makes the current financial crisis seem like peanuts; you'd have people starving on the streets, and a handful of people owning everything. We already live in a world where the wealthiest 85 people on the planet own more than the poorest 3.5 billion. A world where it instead was the wealithest 10 people on the planet owning 99% of everything would not be desirable. 
But pure communism is also unworkable: attempting to remove the profit-motive never works, and if it did, the result would be a catastrophic fall in productivity and a world of poverty as a result.
Real economies are a mixture of ideas from many different inspirations, including communism and capitalism. Good governance is not about finding the ONE TRUE ANSWER and then implement it in it's purest form. Good governance is about finding a reasonably good balance between the many competing priorities.
Enough capitalism to make people productive. Enough communism to avoid having people starve on the streets. Enough capitalism to make it worthwhile to start businesses, yet also enough of a social security-net that even if the business fails, you'll still not need fear for your basic nessecities.  
It's not always a conflict, sometimes there's synergies: A good social security-net makes it easier to start a business, because that's always going to be a risky thing to do (most businesses fail in their first 5 years), and knowing that you'll still be fed even if you fail, makes it easier to accept that risk. 
So the question should not be: What is better, capitalism or communism ? 
The question should be: What is the right balance of ideas ? What are the good parts of communism, and how can we incorporate them, while minimizing the downsides ? What are the good parts of capitalism, and how can we benefit from them while reducing the downsides as much as possible?
I find this writer has summed up my own feelings on this question perfectly, the only problem is that, at present, both the 'capitalist' and 'socialist' political party types are too close to, if not in thrall too, the absolutist proponents of both philosophies.

1 comment:

  1. Slim Jim says: Yes, very interesting, but not much to see here I'm afraid. The problem is the political classes. There are two things that they get wrong most of the time: Priorities, and Governance. In the UK, the political class may appear to have their ideological differences, but they are a smokescreen. There isn't much to choose between them, viz. their determination to prevent us having a say on membership of the EU for example. Why? It's all about gaining and retaining power, I would suggest. About the only thing the UK coalition government have prioritised correctly is rebalancing the economy after the Brown Disaster; and even then, thanks to the dreadful perfidious Liberals, they haven't done nearly enough. At least things are better than they would have been (or will be) under Labour.

    The other thing the writer above forgot to mention was that previous attempts to promote communism is the deaths of millions of people. You could argue that capitalism has been behind the power struggles that have led to World Wars, but I'm not aware that it has been as deadly on a national level.