Sunday, 20 July 2014

Do I need to oppose capitalism?

This is a question to all to the scholars and the layman alike – do the socialist necessarily oppose capitalism in the current economical and social conditions? A perceived irreversible opposition is existing between these two dominant philosophical concepts in the national and international political arena over 120 years. This paper aims to investigate this question and deconstruct the supposed opposition. This paper will put effort to find an answer to the question that do socialists inevitably oppose capitalism or are there any grey areas where their approaches overlap.  
            Instead of analyzing every model of approaches, this paper will instead focus primarily on socialist opposition to laissez-faire, or free-market capitalism. This kind of capitalism has rarely been present in undiluted form, but dominated largely in the 19th century at United States and Great Britain (Rand 1982, p 66), and in the British colony of Hong Kong before the return to Chinese rule - and can be seen to have been advocated by Adam Smith, Friedrich Hayek, Ayn Rand and Murray Rothbard, and among others. The main tenets of laissez-faire capitalism are the protection of private property, and the limitation of government intervention to only situations where some conception of individual rights are deemed to be infringed (Rand 1966, p19). Ideologically, capitalism was initially justified in a more utilitarian way, and was portrayed as a pragmatist economic delivery vehicle; only later was capitalism defended on individualist moral grounds (Rand 1966, p19-40).
Measuring differences in socialist thought proposes the use of the state as a delivery vehicle (Bradlaugh 1887, p3-9). “The distance between the poles of the purely free market, on the one hand and total collectivism on the other, is a continuum involving different 'mixes' of the freedom principle and the coercive, hegemonic principle. Any increase of governmental ownership or control, therefore, is 'socialistic', or 'collectivistic', because it is a coercive intervention bringing the economy one step closer to complete socialism” (Rothbard 2004, p 1274).  According to Mueller (1982, P60), profit-oriented, private ownership equals the paradigm of laissez-faire capitalism; profit-oriented collective ownership creates the market-socialist, 'cooperative' model; want-oriented private ownership creates 'state capitalism' finally, want-oriented collective ownership leads, at least in theory, to the totally monopolised, centrally-planned communist model. Socialism has been shown in broad terms to be a collectivist approach to social organisation which stresses the domination of the group over the individual.
         From an ethical standpoint “capitalism focuses on production as a means to make profits, whereas socialism regards satisfaction of needs as the end production must serve” (Mueller 1982, p156). “Society is fully entitled to agree or alter any particular right of property which on sufficient consideration it judges to stand in the way of the public good” (Sarvasy 1985, p315).
Many on the socialist side of the argument can be seen to oppose capitalism primarily because of the perceived evils of 'abuses by competing firms' (Krisztics 1935). Corporatism might be better suited as a description of the cause of such abuse. Unless coercive force is being used, what constitutes 'abuse' is a subjective matter, state-capitalism or market socialism, all involves the forceful intervention of government power into the economy, in opposition with capitalist principles.
Empirically, the very existence of the most widespread current political  ideologies – that of the 'mixed market', the 'progressive society' and the 'welfare state' - is unquestionable evidence that socialism and capitalism can mix in some way. In fact, many commentators have indicated that the line between state socialism and state capitalism (corporatism) is very blurred (Mueller 1982, p158).
However, the argument can also be made that even Mueller's crossover models are mythical contradictions. There does appear to be a large amount of contradiction (and opposition) inherent in the models, which Mueller himself acknowledges. “The contradiction remains that in state-capitalism production is social, i.e., designed for society as a whole, while the profits flow to private owners without any moral justification such as risk, innovation, etc. In the long run, therefore, this type of monopoly tends to degenerate into a combination of greedy capitalism and lifeless bureaucracy (Mueller 1982). Ultimately, Mueller posits, of two things only one is possible: either a market mechanism and competition, or regulation (planning) and monopoly.
However, at this historical juncture, it would perhaps be immature to claim purposeful certainty as to which system – capitalist, socialist or a mixed-market system - may have the greatest longevity, since all three paradigms have appeared at different times and then collapsed.
Anish Alex MSW
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