Defining socialism (and related terms)

I have written twice about socialism without taking the effort to define my terms. That shortcoming needs to be corrected.

Briefly, socialism describes a society in which the means of production are controlled by the government, or the state. This distinguishes socialism from capitalism—in which the means of production are privately owned—and communism—in which the means of production are commonly owned without control from the government or the state. Based on nineteenth century European philosophy and its aftermath, the idea of socialism can be further divided into three categories.

Means of production include any source of wealth and any production of items that are needed and wanted by members of the community. Farms are the primary means of production for most of history. Factories and businesses have become means of production in more recent times. A shoemaker’s shop, a pharmacy, and a railroad are all examples of means of production. If the government owns and operates these means, socialism is present. Mere regulation by the government of these means is not, strictly speaking, socialism (but see further development of this thought below).

Utopian socialism occurs when a group of people establishes a business or a set of businesses within a community and places them under a governing authority. Several small-scale attempts to establish utopian socialism were tried in the nineteenth century. Even some twenty-first century companies retain elements of utopian socialism—when workers are given stock in the company or other ways of receiving a share of the company’s profits, and when workers are invited to take part in the decision-making process of the company’s boards.

In many cases, utopian socialism remained dominated by the owners of the company, leading to the further subjugation of the workers. In the Pullman neighborhood of Chicago, the Lee Wilson & Company plantations of northeast Arkansas, and various other establishments and businesses, the company owners not only built factories and storehouses. They also built homes for the workers, stores where the workers shopped, schools for the children of the workers, and even churches for the workers and their families. Company owners controlled prices charged in the stores and messages delivered in the schools and churches. Company currency was paid to the workers instead of money that could be spent off company property. The detriment to workers is illustrated by the song “Sixteen Tons,” in which a worker sings, “Saint Peter, don’t you call me, ‘cause I can’t go—I owe my soul to the company store.”

Revolutionary socialism sought to prevent that lack of control by overthrowing the company owners and placing control of the companies directly into the government’s hands. A class of capitalist businessmen, politicians, and other leaders was to be attacked and stripped of power so the workers could gain full control of the means of production. The government, it was thought, would run the farms and factories and other businesses more fairly, giving more of the wealth to the workers since it was keeping less of the wealth to itself. Some revolutionary socialists, including Karl Marx, viewed revolutionary socialism as a temporary condition, one that would become communism (see below) as the government withered away, granting more control of the means of production to the workers. Other revolutionary socialists expected the government to remain, to continue to control the means of production, but to treat the workers more kindly than the capitalists had done in earlier times.

Gradual socialism hoped that the government could assume such control over the means of production without a violent uprising by the working class, and without a violent overthrow of businessmen and politicians. Through increasing government regulation, advocates of gradual socialism hoped, the government could strip capitalist businessmen of their control of the means of production, effectively placing that control in the hands of the government. Not all regulation of businesses is done with the goal of gradual socialism; much legislation has intentions that are not at all related to socialism. But proponents of gradual socialism use government regulation as a means to remove control of the means of production from business owners and to give the government full control of the national economy.

Communism differs from socialism in that the workers directly control the means of production without a government interfering with their control or making decisions on their behalf. Karl Marx wrote that revolutionary socialism would be a temporary step on the road to full communism. Because of his theories, revolutionary socialists in Russia, China, Cuba, and other places identified themselves as a Communist Party, holding out the promise that their government would concede control to the workers over time. That never happened in any of those places.

Communism can be practiced by a small group of people who combine their resources to meet all of their needs. The early Christian Church practiced that kind of communism. Wide-scale communism on a national level has never been achieved. When a revolutionary government established control of the means of production, it retained that control unless and until it was overthrown by a second revolution.

Capitalism teaches that control of the means of production must remain in the hands of the investors, who conduct their businesses for their own profit, but who compete to offer the best conditions for both workers and customers. Capitalism was historically expressed by Adam Smith in his Wealth of Nations. People used to believe that wealth was limited, that one person could gain wealth only if other people lost wealth. Smith demonstrated that labor increases value and wealth is not stagnant. If a person finds a diamond, that person has received wealth. If a person pays a jeweler to cut and shape that diamond, the gem is smaller but much more valuable. Both the finder and the jeweler become more wealthy.

Smith wrote that capitalism thrives when governments do not interfere with the economy. He defended the idea of laissez-faire, or “leave it alone.” Pure capitalism would insist that the government exercise no form of control over the means of production in the national economy. But even Smith understood that some government regulation is good, beneficial, and necessary. The result of a capitalist economy with some government participation is called free market capitalism.

In the free market, the government does regulate the means of production to a certain extent. Pollution of the air, land, and water is limited through regulation. Safety of the products sold to consumers is regulated through inspections. Safety at the workplace and other benefits for the workers are also regulated by the government. Workers and consumers both benefit from some government regulation, while investors continue to benefit from their part in the means of production and the growth of the economy.

In free market capitalism, business owners and investors benefit from competing with each other for workers and for customers. They choose how much to pay their workers and what other benefits to offer their workers. They choose how much to charge for their products, and they also make choices about the quality of their products. All of these choices are shaped by the availability and cost of raw materials, the availability of workers, and the interest of customers in their products. Workers and customers also make choices among the options offered to them. As long as businesses compete for customers and for workers, good jobs continue to be offered, and affordable, good-quality products continue to be bought and sold.

To preserve the free market, governments sometimes act to prohibit or break apart monopolies, trusts, and cartels. Such business practices limit choices for workers and customers by placing control of the means of production into the hands of too few people. Standard Oil and AT&T were divided by the government for the benefit of workers and customers; social media providers may face similar legislation in the near future. The government acts slowly and deliberately when it considers challenging a monopoly in free market capitalism. On the other hand, no agency exists to police the government when it holds control of the means of production in a socialist system. J.

Labor Day

The industrial revolution changed the world. One thousand years ago, Chinese technology created a new and better version of steel. Over the centuries that recipe spread, until it reached the British Isles, where iron and coal were abundant and were near each other, and where transportation by water made it easy to distribute what was manufactured. Labor-saving devices such as mechanical spinners and looms allowed increased production, and what happened in Britain began to happen in other European countries, in North America, and eventually throughout the world.

Capitalism had already begun to develop in medieval Europe. Workers formed guilds which controlled each craft, putting the power of production into the hands of workers. Along with the guilds came financial leagues which led to modern banking and a new financial system. With the industrial revolution came a new form of capitalism. Only those who had access to wealth could buy the new machines. Now workers came into the factories and worked for the investors instead of working at home and controlling their own careers. Following the precepts of capitalism, investors and factory owners paid as little as they could to workers and got as much work out of them as possible, thereby keeping prices low for their customers which allowed them to gain a profit.

Many people realized the problems implicit in the system of capitalism. Even Adam Smith, who wrote the book defining and defending capitalism, explained that workers needed to be treated well to produce a better product—and to be the customers that the factories required. Karl Marx was not the first thinker to attack capitalism, but he offered the most dramatic solution. He complained that the system was rigged to keep the many workers under the control of the few people who had wealth. Government and even religion, he said, always took the side of the wealthy few against the many workers. Marx predicted that the workers would rise in revolt. They would overthrow the wealthy few, along with government and religion, and create a new and fairer system. For a time, the government would own and control the factories and farms on behalf of the people (socialism). After a while the government would wither and die and the people would own the factories and the farms. They would distribute the wealth they produced according to the workers’ needs, and each worker would willingly labor according to his or her ability (communism).

Marx said that the revolution would begin in the countries where the industrial revolution began and would spread as industry had spread. When it had reached the entire world, then the conversion from socialism to communism could happen. Marx did not foresee any way the workers could achieve their goals of proper wages and decent working conditions without violent revolution. He did not foresee any way that capitalism could be preserved.

Marx was wrong. Workers in Europe and North America found ways to organize themselves into unions which could speak to the owners of factories on behalf of all the workers. Christian sensibilities took the side of the workers and implored factory owners to treat them better—fair wages, fewer hours of work, better and safer working conditions. Swayed by Christians and by the growing power of the labor unions, governments began making laws to require the workers in factories to be treated properly. Child labor was gradually abolished, work hours were regulated, and inspectors were sent into factories to guarantee the safety of the workers. Although there were exceptions, generally governments required factory owners to permit their workers to form unions that would negotiate with the owners for the good of the workers. Socialism and communism were not necessary. Capitalism, under limited government regulation, could be preserved, with investors and customers and workers all benefiting from the system.

In the United States we celebrate workers and their contribution to the nation and the world with a holiday called Labor Day. Unlike Memorial Day (which was originally May 30, until it was moved to the last Monday in May), Labor Day has always been celebrated on a Monday, the first Monday in September. Originally that Monday was meant to be a time when workers would parade through the streets of the city to be recognized by their fellow citizens. It was, naturally, an extra day without work for the laborers, a day when they could gather with their families and those of their coworkers in picnics and other festive occasions. Labor Day weekend has become the social end to summer, as Memorial Day weekend is the social beginning of summer.

Every Memorial Day a few people speak out about the importance of recalling the reason for the holiday. Memorial Day is not just about cook-outs and the beginning of summer. On Memorial Day we remember soldiers who lost their lives fighting for their country. I have written such reminders myself. Scolding Americans because we have forgotten the meaning of Labor Day happens far less often. Of course we should be grateful to those workers whose labor improves our lives. We might not go into factories and shake the hands of laborers there, but each of us can mark this Labor Day weekend in some appropriate way. Be kind to the restaurant workers and grocery store workers you encounter. Thank them for doing their jobs. Think of those other laborers who do not get time off for the holiday—police officers, fire fighters, hospital workers, pastors, and all those expected to continue working on a holiday weekend.

Labor Day recognizes workers. It also reminds us of a process—the way labor unions, governments, and Christians concerned about the lives of factory workers combined to assist those workers. Along the way, they rescued capitalism from the danger of revolt. We continue to debate how much regulation is necessary and which laws hinder capitalism excessively. We should debate these things. On Labor Day, though, we also rejoice and are glad for the good things we have because of the work of our neighbors. J.

Bluster and North Korea

Nobody would be worried about missiles fired from North Korea if the Yalta Conference of February 1945 had turned out differently.

The Yalta Conference was the second of three meetings involving the heads of state of the United States, the United Kingdom, and the Soviet Union during World War II. President Franklin Roosevelt, Prime Minister Winston Churchill, and Premier Joseph Stalin had met in Tehran, Iran, in 1943. All three also attended the Yalta Conference on the Crimean Peninsula in the Black Sea. The third meeting, held in Potsdam, Germany, also included Stalin, but Roosevelt had died and been replaced by Harry S Truman. Churchill was still alive, but Clement Attlee had displaced Churchill as Prime Minister.

These meetings had two purposes. They helped the allied governments cooperate in their war against the Axis powers, and they also helped those governments plan for the post-war era. For example, as the United States and the United Kingdom planned their D-Day invasion, they were able to persuade Stalin in Tehran to launch an invasion of German-held territory at about the same time to pin German troops on the eastern front. The partition of Germany following the war was also determined at these conferences.

Probably the most important agreement made in Yalta was that each of the allied powers would set up governments in the lands that they captured from the Axis. Aside from eastern Germany, the Soviet Union also formed governments in Poland, Czechoslovakia, Romania, Bulgaria, and Hungary at the end of the war. Churchill and Roosevelt had insisted that free elections be held-especially in Poland-and Stalin promised that such elections would be held. Instead, all those countries were placed under governments following the Soviet system, and they remained under Communist Party rule until 1989.

Stalin also promised that the Soviet Union would enter the war against Japan roughly three months after the surrender of Germany. This promise he kept. In the beginning of August, Soviet troops entered Korea and began battling the Japanese forces occupying the country. This Soviet invasion factored into President Truman’s decision to rush the end of the war by dropping atomic bombs on two Japanese cities, although his fear of the loss of life that would be caused by a conventional invasion of Japan was a larger concern. When Japan surrendered, Soviet forces had captured the northern half of Korea, and they invoked the Yalta agreement to create a Soviet-sponsored government there as well. Roosevelt and Churchill had never intended Korea to be divided, but Truman and Attlee were not about to concede all of Korea to the Communists. Korea was split into two countries, and today it remains two countries under separate governments.

North Korea is the only Communist nation to be ruled by a single dynasty. Three generations of the Kim family have ruled North Korea since 1945. In 1950 North Korea invaded South Korea, setting off a three-year war which would later spawn an eleven-year television show called MASH. The United Nations condemned the invasion. Soviet representatives in the UN were absent that day, so they failed to veto the UN’s decision to send troops to support South Korea. (This is generally offered as proof that Kim and North Korea were invading on their own and not under instructions from the Soviet Union.) When the UN forces prevailed against the North Korean army, Chairman Mao sent reinforcements from the Peoples Republic of China, and the war became a stalemate that was settled by treaty in 1953, leaving things much as they had been before 1950.

The division of Korea became an interesting test case for different economic beliefs. With the support of the United States, South Korea built a capitalist economy, while North Korea built a socialist economy inspired by that of the Soviet Union. South Korea has blossomed into an economic power, while North Korea has remained stagnant economically. The government of North Korea has invested heavily in military equipment, including atomic weaponry and missile technology. With little opportunity to boast about anything else, the North Korean government regularly reminds the world of its power. The United States in particular has responded to these reminders with its own reminders of American military power.

I teach history classes. I am more qualified to discuss the past than to predict the future. I can say with confidence, though, that governments like those in North Korea and Cuba are doomed to failure sooner or later. No matter how hard they try, despots can only fool their people for a while. News of what people in other countries possess leads to discontent and a desire for change. At some point the mistakes made at the Yalta Conference will be upended and freedom will prevail, even in North Korea. J.

 

Definitions

As a history teacher, I must define a few words so that the students and I can use them properly in the classroom. I want my students to know to true meaning of words such as “conservative,” “liberal,” “capitalist,” “socialist,” and “communist.” When we all use those words the same way, our conversations are much more productive.

Conservatives want to conserve things. They want to keep things the way they are. A conservative is likely to say, “If it’s not broken, don’t try to fix it.” Liberals want to change things. They don’t think things are good enough, and so they want to fix what is broken. A liberal is likely to say, “We can make it better.”

Actually, conservative and liberal are two words that cover some territory on a broad spectrum. A conservative wants to keep things the way they are, but a reactionary wants to change things back to the way they used to be. A liberal wants to improve the system, but a radical wants to destroy the system and replace it with a new system. Moderates are between conservatives and liberals. They want to change some things, but they want other things to stay the same. Convinced conservatives and convinced liberals think of moderates as weak and indecisive. They find it hard to fathom why anyone would want to remain in the middle between two choices. Yet political opinions are generally shaped like a bell curve. I suspect more people are moderate than are either conservative or liberal.

People sometimes change their minds, becoming more conservative or more liberal because of different experiences and new perspectives. Ideas can also change, generally from liberal to conservative. A new idea is going to be liberal at first. To adopt a new idea is to want to change. Two hundred years later, that idea has become old. Conservatives want to keep that idea, not to change it; but liberals might reject that idea that used to be liberal, because they think things can be better.

Limiting the power of government was once a liberal idea. Now it is a conservative idea. Defending human rights, such as freedom of speech and freedom of religion, was once a liberal idea. Now it is a conservative idea. Abolishing slavery was once a liberal idea. Allowing women to vote was once a liberal idea. Even capitalism was once a liberal idea. Once an idea has been around for a while and people have gotten used to it, the idea is now a conservative idea.

Capitalism has its origin in the High Middle Ages of Europe. As an economic idea, though, it was not expressed clearly until the late eighteenth century. When people thought at all about economics, they assumed that a limited amount of value exists in the world. For one person to gain wealth, someone somewhere would have to lose wealth. Nations competed for limited forms of wealth, such as precious metals. Explorers claimed newly-discovered lands for European governments, believing that they had to compete to see who would be wealthiest and strongest and safest. Adam Smith was one of the first writers to show that value in the world can increase, benefiting all people. A diamond found in a mine has value, but after a jeweler has spent hours cutting and polishing that diamond, the gem is more valuable, even though it is smaller. Wool sheared from a sheep has value. After the carder and spinner and weaver and fuller and tailor have worked with that wool to produce garments, the wool is far more valuable, even though much of it has been lost in the process.

Liberals at that time, believing in limited government, also believed that the government should be uninvolved in the national economy. They were convinced that the economy would regulate itself and would become stronger, benefiting all people, if the government would just get out of the way and let things happen. Private owners would be motivated to do their best to succeed with their property. They wanted customers to buy their products. Some would try to improve the quality of their products to attract customers, while others would try to cut costs to attract customers. Those seeking quality would pay their workers more to attract the better workers; but those who tried to cut costs might not need to pay workers as much, since their expenses would be smaller. Competition would waver between the higher quality and the lower cost, value would increase, and everyone would benefit. Liberal capitalists did not see any way that the government could help that process other than by staying out of the way.

Unregulated capitalists had critics by the middle of the nineteenth century. Capitalists hired children to work in their factories; those children worked from before sunrise until after sunset, labored in dark and dangerous conditions, and brought home less money than an adult would have expected for the same work. Liberals thought that conditions could be better. Some formed utopian communities, but others looked to the government to take over the factories and fix the problem. They figured that if the government owned the factories, they would improve working conditions, pay better wages, produce quality products, and sell those products for less, since the government would not be seeking to make a profit. Radicals (including Marx and Engels) expected the workers to rise in revolt, take over the factories, entrust them to the government for a time, and eventually replace the government with a world-wide utopian community in which each person would work for all and each would receive what he or she needed from all.

“Capitalism,” then, is defined as private ownership of the means of creating value, whether farms, factories, oil wells and refineries, or hospitals and medical clinics. “Socialism” is defined as government ownership of the same means of creating value. “Communism” is defined as shared ownership of these means without government control.

These definitions became confused when the Bolshevik Party in Russia changed its name to the Communist Party. They based this name on their promise of communism in the future, even though they named the country which they ruled the Union of Soviet Socialist Republics. For seventy years the Communist Party ruled the USSR, but the country remained socialist; it never became communist.

During the Cold War, Americans spoke of the struggle between communists and the free world. Other countries were ruled by Communist parties, but all of those countries were socialist. Moreover, all those governments were totalitarian, controlling the lives of citizens by controlling elections, education, communication, and every workplace, as well as law enforcement. It was a crime to disagree with the government. When citizens protested their governments, they were arrested or killed. People voted with their feet when they had their chance. Between three and four million Germans left East Germany to live in West Germany before the Berlin Wall was built; not many left West Germany to live in East Germany. When Vietnam was divided into a communist North Vietnam and a noncommunist South Vietnam, one million people traveled from North to South. Only ninety thousand traveled the opposite direction. When Fidel Castro said in 1980 that anyone who wanted to leave Cuba was free to go, 125,000 gathered at the port of Mariel waiting for transportation to the United States. That many Americans have not tried to escape to Cuba in the entire fifty-five years that Castro’s Communist Party has ruled Cuba.

Small groups of people have experimented with communism. Even the early Christians were communist, according to Acts 4:32. No country has ever been communist, and no country ever will be communist, because governments are not good at surrendering their power to the people. Socialism has been tried at various times in various places with various levels of satisfaction among the citizens.

If unregulated capitalism was so bad, why did the workers of the industrialized nations not rise in revolt as Marx and Engels predicted? Marx and Engels did not envision regulated capitalism, in which the governments make laws about how farms and factories will operate, even though the government does not claim ownership of the farms and factories. Laws restricted child labor and eventually placed limits on the number of hours any worker could work. Laws allowed inspectors into factories to ensure that the factories were safe for workers and that their products were safe for customers to use. Laws forced capitalists to allow their workers to gather into labor unions which could then represent the workers and negotiate with the business owners. Capitalism survived and thrived because of its compromise with regulation. By 1988 it was easy to compare East Germany to West Germany, North Korea to South Korea, China and Vietnam to Japan and Singapore and Taiwan. In every comparison, it was easy to see that regulated capitalism produced a better life for citizens than totalitarian socialism.

Yet in regulated capitalism citizens often disagree with one another about the amount of regulation that is ideal. This conversation is part of an idea that has been called “the social contract.” On another day, I will write about that contract and what it means for people living under regulated capitalism. This post is too long already. J.