The term “Capitalism” is often associated with technological innovation, freedom, and prosperity, while “Socialism” is often paired with totalitarianism and primitive collectivization. The central engine that propelled American industry was the free trade of goods and the complete private ownership of industry, it’s often said, and the economic and social ills we face today result from “Corporatism” and/or “Crony Capitalism.” Conservative pundits like Ben Shapiro and Richard M. Salesman go so far as to claim that the modern system is really just “Corporatism”, and that “Crony” is a misnomer propagandistically used by the Progressive Left to sinisterly redefine “Capitalism”, that is “Real Capitalism.”
I can’t help but feel a tinge of blind religious fervor here. Shapiro and others seem to think that historic progress, in way of living standards and overall prosperity for the average human being, have come entirely from private sector imperatives. The so-called “Golden Age of Capitalism”, i.e the 1945 to the early 1970s, is oftentimes used to be proof of this. But, ironically, it was during that period where large scale government intervention programs were most active–the G.I Bill provided millions of Americans with higher education and low cost housing, and the state provided heavy funding for the interstate Highway system as well as the high-tech industry which enabled the creation and evolution of the very computer systems we use today. The list goes on. Yet this escapes the minds of proponents of “Real Capitalism.” Today, most socialized spending is swiftly and pejoratively labeled as “Socialist”, as if all memory of post-WWII social welfare programs had been wiped from societal consciousness, from history itself! Orwell would’ve shivered. And this is why these terms ultimately fail in describing the actual reality of things. They serve as banners for one’s favorite team, a twitter status that reduces all complexity to a few sentences.
Let’s look at the actual definition. Simply, “Capitalism” is the complete private ownership of the means of production and distribution of wealth. “Socialism” is the complete public ownership. Public of course is any institution that utilizes our tax dollars. At best, we can say that almost all modern countries have combined certain aspects of Capitalism with certain aspects of Socialism. In the post-war period, Japan and South Korea heavily subsidized important industries (this was done in order to compete with more economically mature and advanced Western nations at the time), while Europe adopted Keynesian economic policies which also involved government intervention of industry. A “Real Capitalist” system, by way of the complete private ownership of all walks of life, would be neither desirable or sustainable.
The most pure and exaggerated form would indeed be a Mafia-like State. If proponents of “Real Capitalist” systems are serious in their Ayn Rand inspired ideology of the individual right over the collective, then it would follow that they also do not believe in government regulatory structures since oftentimes such “totalitarian” institutions strangle private profit. During England’s Industrial period in the 19th century, business owners, who claimed to be arguing on behalf of their workers, accused government factory inspectors of intruding on their rights to “provide” for their laborers, men, women, and children, by way of 12 hour workdays and dangerously unsanitary factory conditions which would eventually kill thousands. Perhaps the lowering of the work day did in fact come at the expense of the business owner. But was the exploitation utilized by the business owner not at the expense of the laborer, at a much greater expense in fact?
Furthermore, the financial crisis of 2008 was not just “Crony Capitalism” or “Corporatism”, it was Capitalism brought forth to its most pure form. Again, those who relish in the ugly nihilistic cult of Ayn Rand would have to conclude that the 2008 financial crisis was a natural consequence of some people “winning” and others “losing.” The perpetrators did the right thing, ignoring “externality”, which in this case were the savings and pension funds of middle class Americans, and pursuing their own gain, by handing out exorbitant loans that they knew couldn’t be paid back…the economy collapses but well, it’s not our problem…self interest right? The fact is that wealth inequality, which is increasing, is not problematic for the “loser” i.e those who didn’t work hard enough or just didn’t have it in them to be “winners” in the economy, but is problematic for civilization and democracy. That’s why a mixed economy, one that properly balances elements of both Capitalism and Socialism is the only way forward and, as such, perhaps the term Capitalism shouldn’t illicit ideological worship and Socialism shouldn’t have such a nasty misunderstood flavor.