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.