2019-03-13 / Editorial

CAPITALISM VS SOCIALISM

Michael N. Searles

To begin this discussion some definitions are in order. Capitalism is described as an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. Socialism is described as a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. Communism is described as a political theory advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs. The defi- nition of communism has been included since many conflate socialism and communism as the same system.

There seems to be a war afoot in America: Are you a capitalist or a socialist is the question of the day? The issue of capitalism vs socialism has captured our imagination recently with Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez claiming the title of Democratic Socialist. President Trump announced in his State of the Union Address that we will never be a socialist country to the applause of many in Congress. For the 2020 presidential election, it appears that the litmus test will be tied to this question.

If the discussion were honest rather than political, everyone would agree that a pure laissez faire capitalist society has NEVER existed. In the late 19th Century, we experienced what unfettered private business can and will do. While tremendous progress was made in technology and economic growth during the era, it was done at a very high price. Political corruption both private and public was the hallmark of the age as business leaders used their wealth to keep government from regulating their activities to the public’s detriment. Graft and bribery of government officials was so commonplace that it was conducted in the open. Ida M. Tarbell, the critical chronicler of Standard Oil Company summed up her sentiments with the statement: Standard Oil did everything with the Ohio Legislature except to refine it. It was that blatant corruption that spurred the formation of the Progressive Movement, the Labor Movement, Workers Compensation, the Fair Labor Standards Act, Social Security, and anti-trust legislation.

The United States has a “mixed economy” that features capitalist and socialist features. In our system, private businesses and government both play important roles. Americans value private ownership based on the concept that it will likely operate more efficiently than government ownership. However, there are limits to free enterprise with some services better performed by the public rather than the private sector. In the United States, government is primarily responsible for the administration of justice, public education, transportation, statistical reporting, and national defense. While there are some who believe that the best solution is based on market conditions where supply and demand determine price, this system works well in some areas of our economy, but in other areas the market solution falls short. About 6 million people currently take insulin in the United States and without this life saving medicine, they get sick and die. For no apparent reason other than profit, the cost of insulin skyrocketed in 2002. Those without insurance conservatively spend from $120 to $400 a month with some spending $1,000 or more a month for their insulin. If you live near the Mexican border or if you are willing to travel there, it is possible to legally purchase a three month supply of insulin for about $600. The insulin sold in Mexico is the same medicine sold in the United States for about $3,700. Market conditions allow pharmaceutical companies to charge whatever they want. The argument is not capitalism or socialism; it is what will promote the general welfare of the people as a Constitutional promise.

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