2011-03-15

On Capitalism, Socialism and Communism

Not many subject create as many debates around the world as economic systems. I never hid from anyone that I'm a communist at heart, but my mind is capitalist; not that I think capitalism is the rational system to adopt, I simply think no large scale society is mature enough to cope with communism. Yup, you read me right, I think communism is a evolution above capitalism. I won't pretend I know a lot about economic systems, but I will still try to explain my point of view.

On Communism

To me, communism is an ideal system, everybody contributing the best they can toward the common social good. Nobody has money because everything you need is provided for. You decide to study/work at what you like and are good at because salary isn't a concern. Anything bad happens, no problem, society will take care of you so you can get back to work or contribute in some other way. There is only one big problem with that system: human kind; yhere are many flaws in the human kind that makes this system unworkable.

First is the perception of value. Oscar Wilde said "The cynic knows the price of everything and the value of nothing", but, somehow ironically, I feel that unless something has a price, nobody ever learn its value. Not that value and price necessarily have a correlation, but, by having a price, people might not be able to afford it. I think it's that realization that something might not be available to us that makes us realize its value. In a communist context, people therefore loose sight of the value of everything since all is provided for them; same thing at a smaller scale for socialism. After a while, they will feel that are working hard for absolutely nothing. This leads us to the 2nd problem: sloth.

Possibly out of evolution, most people will tend toward sloth; why not, conservation of energy unless need (possibly to get more of it) would increase your chances of survival in the wild. Given that over time people loose sight of the value of things, they will therefore feel that they are working way more than what they gain. Since in a communist context you cannot "ask for more", they most likely will reduce their productivity. If enough people do that, the whole system will collapse and it will no longer produce enough to self-sustain.


On Capitalism
To me, pure capitalism is just natural selection applied as an economic system: the poor thrive less or die-off and the rich do well. Unlike communism, there isn't anything wrong with that system since it's probably in our primal nature to function like this anyway. However, like natural selection, this system is self-balancing and, like nature, the re-balancing can be rough. I think this is the biggest risk of capitalism: lack of structure to absorb shocks the system itself might not tolerate without catastrophic consequences.

If we keep the natural selection analogy, species got extinct in the past and that before humans came to be. It is to say that, in a purely capitalist system, the same thing could happen; we might destroy ourselves or send ourselves back many decades with crashes. Take the last economic crisis for example; the American government, far from being know for it's socialist tendencies, decided to inject massive amount of moneys into banks and even buy some companies back to prevent them from going bankrupt because they feared it might have fueled a chain reaction of a magnitude nobody really gasped.

The only other thing that could be considered "a risk" of capitalism is also related to the "natural selection" analogy: sheer luck or lack of it. We like to think of natural selection simply as "survival of the fittest", but even positive evolution could have been "weeded-out" by just being at the wrong place at the wrong time. Who knows, there might have been a mutated dinosaur with high intelligence just before it got smashed by a meteor. Might have been another species of intelligent primate before our strain ... that died in a forest fire. How many desirable human qualities would we be willing to sacrifice just because other traits or bad luck didn't help them thrive?

So nothing is really "wrong" with the system, but it comes with a high risk. Moreover, I'd like to think humans have evolved beyond simple "natural laws" to model it's society; the system doesn't care for compassion. When promoting capitalism remember that the last resort to save it was to resort to communism tactics:
On Socialism
Because of the risks/drawbacks of both systems, most societies seems to have chosen some middle point: some degree of socialism; some have unemployment insurance, some have health insurance some have welfare, ... This could seem like a perfect compromise, but it still misses the mark on many aspects.

First, the loss of perceived value is still present, even if the system isn't completely capitalist. Even if living beside more capitalist countries, people still lose sight of the value associated with the service provided to them. Even for newly acquired benefits it doesn't seem to take long for this loss of value to occur. In Quebec for example, many of what we have now were obtained during the 60's and the 70's, but most people take those benefits for granted now; in less than 50 years, people went from being grateful for what they fought for to being totally indifferent.

There is also the problem of bureaucracy which is possibly related to "sloth" discussed in the communism section. Managing social services requires a big administrative machine. Moreover, the service is often provided as a monopoly (no competition). Combine that with high level of unionization (maybe more so here in Quebec) and you get a machine that doesn't feel the need to be efficient and where job security is a given. The end result is a society where people live mostly with a capitalist mindset, but get half of their paycheck eaten by taxes to fund inefficient services where at least 50% of the cost end-up in bureaucratic wastes and therefore only 50% in perceivable services. Then, when you finally need the services you pay for, you have to wait weeks if not months while navigating a labyrinth of paperwork and phone services operated by people who couldn't care less that you actually need the service, their job description is to answer the phone, not be helpful.

In Conclusion
So here you have it, no system is perfect. Some have high level of risk and total lack of compassion for others and others are flawed, not in themselves, but by the human nature. I'd like to have a solution to this problem but I don't. My mind then just gave-up and chose capitalism; live with the risks, pay the consequences of not being to control your primitive sloth instinct; if we end-up extinct, we will just have been another species "unfit for survival" as many others have been; tough luck, we might not have been much more than chimps after all.

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