Brianna Crysler Contributing Writer
Americans seem to confuse the terms communism and socialism, and often erroneously use them interchangeably. Since each of these put some level of constraints on capitalism, the terms have been demonized by the wealthy and powerful. Americans have been taught to fear them pretty much since the Red Scare during the Cold War.
Is there reason to fear the terms? Pure communism has been tried and appeared to have failed as an economic system, although it worked well for the Soviet Union for a while. Communism has been said to be incompatible with basic human nature in that it doesn’t provide specific rewards for one’s work. There are good reasons to reject this system although, in theory, it’s very appealing. On the other hand, socialism is presently functioning well in many European nations, such as Norway, Spain, France, and Sweden to name a few. It does not seek to supplant capitalism, but only to put reasonable constraints on it.
Is there a reason to constrain capitalism? It turns out that free markets are not free. The larger devour the smaller until all competition is eliminated. Instead of the market being free, it becomes a dictatorship of monopoly in which, for example, the only railroad in the country can charge whatever it wants. Furthermore, it is the specific business of businesses to enrich the shareholder. Benefit to humanity is a by-product, the shareholder comes first. The United States already engages in a form of socialism, although they refuse to call it such, by constraining business for the benefit of its citizens.
Basically, capitalism can’t exist without the existence of a poor labor class or “proletariat.” Pure capitalism is often sold on a romanticized vision of a complete meritocracy where those who work honestly and earnestly will succeed without government regulation to hamper their business and their growth. Logically speaking, it isn’t possible for everyone in the world to rise to the top on their own merit because there is limited seating at the winner’s table. You always need someone to do the actual work.
When it was originally proposed, capitalism’s shortcomings were accounted for by Adam Smith— he basically founded capitalism in his book “The Wealth of Nations”—who said that the compassion of the rich would lead them towards charitable ventures, because no one needs or wants that much money, right? Well, Mr. Smith had perhaps too much faith in the human condition, because what actually happens is that, in a free market without proper regulation, business owners cut corners and mistreat workers to turn a profit. The middle class becomes thin while the poor, labor class and the wage gap become large, which is exactly what is happening in the U.S. The alternative to this is the institution of socialist policy to tax the rich and redistribute that money to programs to benefit the poor as well as instating regulation that imposes fair labor standards for all workers.