There's confusion because we don't agree
on the definitions and we haven't for a
long time and that has to be put on the
table. Otherwise we don't know what it is
we're in favor of or opposed to and a
lot of the conversation is confused in
that way. So here we go.
Very simple, as we come toward the end of
the first half of this program we're
going to give the definitions that we're
then gonna use in the second half to
really tell the story. So the first
definition is this: capitalism is when
enterprises are privately owned and
operated. They are owned by individuals
or groups of individuals who set them up
own them and run them. Socialism by
contrast (in this definition) is when the
government does that. It's not private
groups of people, it's not private
individuals, its officials of the
government who own, who operate, who run
the enterprise or at least control it.
Okay, that's one definition. Here's a
second one: capitalism exchanges goods
and services, both the resources that go
into production and the products that
come out of it, by means of market
exchanges. Capitalism is the "free market"
where buyers and sellers confront each
other and negotiate the terms of
exchanging whatever any of them has to
sell or has produced. By contrast
socialism isn't the market system, it is
the government planning and controlling
and directing who gets what and who
gives up what for what. In other words
market versus planning, it's often called.
Those are definitions. Here's another one:
capitalism is when you organize
production with a few people at the top
making all the decisions; the owner, the
chief executive, the Board of Directors,
and the vast mass of other people called
employees doing what they're told.
Whereas socialism the workers who do the
work are themselves their own bosses. Oh
that's a very different definition.
We're gonna have to look at them because
these different definitions are all
cropping up without being dealt with as
they really are. Is it reasonable to
think that capitalism is private
enterprise and government taking over
the enterprise is socialism? And I would
argue strongly with you that it is not.
Let me explain briefly. In previous
economic systems
we never reasoned like that. If we saw in
a slave economic system, whether it was
in the pre Civil War American South or
any of the many other places in the
world where slavery has existed often
for centuries, if we see there, as we do,
that there were sometimes private
individuals who owned and worked slaves
whereas sometimes there were state
groups, state entities who owned and
operated slaves, did we say that one was
slavery and the other one was not? No, we
didn't. Let me give another example. In
feudalism where the division is between
the Lord who [owns] the land and the
serf who works on it, were there
governments that had serfs alongside of
private individuals who had serfs? Yes.
Did we say that therefore that serfdom
or feudalism, the name we gave that
system, was somehow not there? No we
didn't. And I would argue the same logic
applies to the capitalism versus
socialism debate. The fact that states,
either alongside or instead of private
groups, hire and employ workers doesn't
end capitalism. It is a strange argument
that says because of this relationship
between employer and employee operates
outside the state and inside the state
therefore one is capitalism and one is
the opposite...
Uh-huh. Makes no sense. It isn't a reasonable
way to go.
So then how about the other one? Market
verses planing?
It's the same problem. Did
slaves and feudal societies only deal
with markets? No. Did they exclude markets?
No. Slavery is famous for what? The market
in human beings. They bought and sold
people, they bought and sold land, etc. etc.
So the presence of a market way of
distributing things versus a planned or
organized way that exists in all of
these systems and the presence or
absence of it in the United States or in
the world today is not, I would argue, a
sign of the presence or absence of
capitalism. It shouldn't be part of the
quote debate between capitalism and
socialism. Well then what ought it to be?
It ought to be about that third
definition I gave you. It ought to be
about what distinguishes a capitalist
system from say the predecessor systems
of feudalism and slavery. And that is the
relationship between people in the act
of producing the goods and services we
all need.
