Socialism vs. Capitalism: Which is the Moral System?

http://www.ashbrook.org/publicat/onprin/v1n3/thompson.html

The extraordinary level of material prosperity achieved by the capitalist system over the course of the last two-hundred years is a matter of historical record. But very few people are willing to defend capitalism as morally uplifting.

It is fashionable among college professors, journalists, and politicians these days to sneer at the free-enterprise system. They tell us that capitalism is base, callous, exploitative, dehumanizing, alienating, and ultimately enslaving.

The intellectuals’ mantra runs something like this: In theory socialism is the morally superior social system despite its dismal record of failure in the real world. Capitalism, by contrast, is a morally bankrupt system despite the extraordinary prosperity it has created. In other words, capitalism at best, can only be defended on pragmatic grounds. We tolerate it because it works.

Under socialism a ruling class of intellectuals, bureaucrats and social planners decide what people want or what is good for society and then use the coercive power of the State to regulate, tax, and redistribute the wealth of those who work for a living. In other words, socialism is a form of legalized theft.

The morality of socialism can be summed-up in two words: envy and self-sacrifice. Envy is the desire to not only possess another’s wealth but also the desire to see another’s wealth lowered to the level of one’s own. Socialism’s teaching on self-sacrifice was nicely summarized by two of its greatest defenders, Hermann Goering and Bennito Mussolini. The highest principle of Nazism (National Socialism), said Goering, is: "Common good comes before private good." Fascism, said Mussolini, is "a life in which the individual, through the sacrifice of his own private interests…realizes that completely spiritual existence in which his value as a man lies."

Socialism is the social system which institutionalizes envy and self-sacrifice: It is the social system which uses compulsion and the organized violence of the State to expropriate wealth from the producer class for its redistribution to the parasitical class.

Despite the intellectuals’ psychotic hatred of capitalism, it is the only moral and just social system.

This is one of the clearest, simplest, and most thorough essays on the difference between Capitalism and Socialism I have ever read. It also is an excellent defense of the morality of Capitalism - a defense that few intellectuals have ever proposed (other than Ayn Rand).

Celebrating Income Inequality

http://capmag.com/article.asp?ID=5005

Democrat and Republican candidates for President are debating one another on nearly every issue--but nearly all are united on one thing: America faces a crisis of "income inequality." The rich are getting richer, the refrain goes, while the poor and middle class are held back by stagnating wages, lousy schools, and growing healthcare costs. The solution, we are told, is more government intervention: spend more on education, provide "universal healthcare," and force employers to raise wages through minimum-wage increases and union protection legislation.

But all of this outcry is based on a false premise--that income inequality is bad. While some of the problems critics point to are legitimate concerns, income inequality is not. Income inequality is a natural and desirable part of a free, prosperous society.

In America, equality should mean only one thing: freedom for all. If business and wages were deregulated, we would see a dramatic rise in economic opportunity. If education and medicine were left free, with America's businessmen, doctors, and educators liberated to offer education and medicine at all different price points, we would see quality and price improvements like those for computers or flat-panel television sets. But these benefits of freedom require that we recognize the moral right of each individual to enjoy whatever he produces--and recognize that none of us has a right to something for nothing.

Great essay from Alex Epstein of the Ayn Rand Institute. I love topics like this that catch people in the contradiction of their thoughts. Most people instinctively condemn "inequality", but in this case, when they apply their minds to why that inequality exists and what is being proposed to "fix it", they find some difficult pills to swallow. This is yet another example of the two paradigms: one that is risk averse, wanting protection from one's own weakness, and the other that embraces risk and the responsibility that comes with it (and its ensuing rewards).

Too many people see only the rewards gained by some, and covet them. Not understanding why they have those rewards (e.g. proof of their profitable actions), they take on the mentality of the victim, saying that they were unfairly gained, either by unfair competitive circumstances or at the expense (exploitation) of the poor victim.

Walking Through the Looking Glass

http://www.freecapitalist.com/columnists/koerber_archives.php?id=13

What's the difference between failure and prosperity? How can you be sure you are headed in the "right" direction? Is it even possible to chart a course to live the abundant and prosperous life? Is it just an age-old gimmick to trick the naïve and unsuspecting entrepreneur into believing that the American dream is still a possibility? Can an honest person actually make it "big" in the business world?

To anyone with any substantial ambition whatsoever, these questions-and many related to them-are very important. To me, it has been very surprising indeed how I have come to learn the answers to these questions over the last few years.

I have learned that prosperity is not about some external event or some lucky opportunity. Prosperity is about a choice and the subsequent change that starts from within. It is literally like "walking through the looking glass" and seeing a world that so many people never see because of their own fears. I add my voice to those who have gone before me and say, "I too have walked through the looking glass and see a new way of life."

So what happened that enabled me to walk through the looking glass? Did I get lucky? Was I in the right place at the right time? Did I find a partner with a lot of money? No. None of these have anything to do with my success. The fact that I used to think in a way to even conceive such possible explanations for success is almost frightening to me.

This a great essay by Rick Koerber, where he outlines the journey of his failure and success, and describes what made the difference between the two. An excellent introduction to changing you perspective from scarcity to prosperity.

Socialism, Free Enterprise, and the Common Good

http://www.hillsdale.edu/imprimis/2007/05/

In chapter 21 of St. Matthew’s Gospel, Jesus proposes a moral dilemma in the form of a parable: A man asks his two sons to go to work for him in his vineyard. The first son declines, but later ends up going. The second son tells his father he will go, but never does. “Who,” Jesus asks, “did the will of his father?” Although I am loath to argue that Jesus’s point in this parable was an economic one, we may nonetheless derive from it a moral lesson with which to evaluate economic systems in terms of achieving the common good.

Modern history presents us with two divergent models of economic arrangement: socialism and capitalism. One of these appears preoccupied with the common good and social betterment, the other with profits and production. But let us keep the parable in mind as we take a brief tour of economic history.

This essay is adapted from a speech delivered at Hillsdale College on October 27, 2006, at the first annual Free Market Forum, sponsored by the College’s Center for the Study of Monetary Systems and Free Enterprise.

It makes a thorough argument about what I have often observed in the struggle between capitalism and socialism - that of the difference between the public perception of a philosophy and the actual consequences of the same.

In Defense of Income Inequality

http://www.capmag.com/article.asp?ID=4940

Income inequality used to be a rabble-rousing issue of the left. Now it is being raised by mainstream figures, from the head of the Federal Reserve to President Bush, who are apologetically trying to offer solutions. But what is the actual problem they wish to solve? Certainly, it is not a growth in poverty. To the contrary, between 1979 and 2006--the period during which income inequality has supposedly become more acute--real wages for the median worker rose 11.5%. Even workers in the lowest tenth percentile had an increase of 4%.

No, the alleged problem is not that some are becoming poor--but that others are too rich. The complaint is that while the bottom tier enjoyed a 4% rise in income, the top tier enjoyed a 34% increase. The complaint is that over the past 25 years, the share of income of the top fifth of households climbed from 42% to 50%, while that of the bottom fifth fell from 7% to 5%.

But this development represents an injustice only if we use a perverse standard of evaluation. It is unjust only if we measure someone's economic status not by what he has, but by what others have--i.e., only if he benefits not by making more money, but by making his neighbor have less.

This is the standard of egalitarianism--the standard that demands a uniformity of income, regardless of anyone's ability or effort. It is the standard of envy, whereby a problem exists whenever some have more, of anything, than others. And the egalitarian's solution is to eliminate all such inequalities.

Egalitarianism is the antithesis of the valid tenet of political equality, under which we have equal rights. That is, we have the right to achieve whatever our ambition and talents allow, with no one permitted to forcibly stop us. Egalitarianism, however, is a denial of the individual's right to be left free. It is an abhorrent demand that some people be punished for achieving what others haven't. It is a brazen declaration that an equality of condition must be attained.

Highly recommended essay on the fallacy of egalitarianism, and its role in the public clamor over income inequality. This is only an excerpt - click the link above the quote to read the whole article.

"Do we need money to live the life we love, or is prosperity the consequence of learning how to live the life we love?

What do you want? Do you want money, or do you want to love your life?"

-- Rick Koerber