Not since the Great Depression of the 1930’s has the United States been in such a heated battle over these two dueling perspectives. Which vision of America should we embrace, that of the Tea Party or the Occupy movement?
That seems to be the question of our time and I predict it will be the prevailing philosophical battle of this century. Essentially, it is the question at the heart of our national debate is should we continue to practice capitalism or should we now, like our European brothers, embrace some form of socialism.
We've been debating this for quite some time in this country but the intensity and the importance of the question came into clearer focus after the economic crash of 2008 and the 2010 presidential election.
Can we have both individual liberty and social equality or do we have to pick one or the other? We are being asked to choose between individual liberty that is afforded by Capitalism and social equality that is provided by Socialism.
There are four things that everyone should know about Capitalism and Socialism. Those four things center around four words and concepts: Ownership, Motivation, Competition, and Relationship.
1. Ownership: The difference between the two systems begin with who owns goods and services.
Capitalism believes in private ownership of the means of production, the distribution of goods, and the overall structure of business. It is not an area for government control. The concept of private property is central to Capitalism.
Socialism believes that the means of producing and distributing goods should be owned collectively or by a centralized government that plans and controls the economy. The concept of private property is not as strong in Socialism.
2. Motivation: The next big difference has to do with motivation of workers and the reason for work.
Profit is the motive behind capitalism. The desire to earn profit is the driving force behind privately owned businesses. The reward of profit drives capitalist to innovate, create, and produce the goods and services people want to buy. Success is measured by the amount of money earned and created.
The common welfare is the motivation behind socialism. Socialism emphasizes equality rather than achievement, and values workers by the amount of time they put in rather than by the amount of value they produce. The desire for equality or what they often refer to as “social justice” is the motivating force behind giving up individual liberty for a bureaucratic centralized planning.
3. Competition: A third distinction between the two systems is how each system views competition.
Competition is seen as a positive and healthy thing in the Capitalist system, even if that competition results in some businesses failing. The purist would argue that no one should interfere in this competition or its consequences.
Socialism would eliminate or at least limit economic competition because of the harm it does to workers. They would argue that the government should regulate, subsidize, and when necessary interfere in business for the good of the workers and the larger society.
4. Relationship: Lastly, the two economic systems different when defining the nature of the relationship to the system and whether it is voluntary or mandatory.
The entire capitalist system is voluntary. No one is forced to make, sell, or buy a product they do not want.
Socialism is more of a mandated or involuntary system. There is no aversion to forcing certain economic transactions if such mandates are seen as benefiting the social welfare of all.
In conclusion, socialist argue that capitalism is an inferior system because it exploits workers for the benefit of a small, wealthy class. Critics of socialism, on the other hand, believe that it is based on faulty principles and ignores the realities of human nature and the role of incentives in economic transactions.
What do I think is the better of the two systems?
It depends if I am answering as an American or a Christian? As a citizen of this country or a citizen of a heavenly kingdom?
There is a reason I make a distinction. I’m sure we would all agree that you don’t have to be a Christian to be an American. Right? That is a good thing, a very good thing. In America we believe in the freedom of religion and the freedom not to be religious. But sometimes it doesn't feels that way. Sometimes it feels like you have to be an American to be a Christian. That is not a good thing.
Christianity has survived and even thrived under every form of government and economic system throughout human history. But you can go on internet today and find someone claiming that Jesus was a socialist or Jesus was a capitalist. That is silly.
Does the Bible have anything to say about economics and politics? Sure it does. And both sides can make a good argument from the Bible for their economic theology.
As an American, if I had to pick between capitalism and socialism, I will always pick capitalism and I will do it for one main reason - individual Liberty. It is the voluntary nature of the system, that has linked capitalism with democracy together in America for over two centuries. To make this central point about individual liberty I will use one of the champions of Capitalism, Ayn Rand
"In a capitalist society, all human relationships are voluntary. Men are free to cooperate or not, to deal with one another or not, as their own individual judgments, convictions, and interests dictate. They can deal with one another only in terms of and by means of reason, i.e., by means of discussion, persuasion, and contractual agreement, by voluntary choice to mutual benefit."
I have no fairy tale illusion that capitalism doesn't have a dark side. It does. And it is the socialist who do a good job of pointing it out. But under that system I can choose to be fair and just. I can choose let my faith modify the darker aspects of the system. I can choose to share my wealth with others. Under Socialism, because it is not voluntary, I can not make the same choices.
As a Christian I would not choose Socialism but I wouldn't choose Capitalism either, at least not in its current form.
I admire the aims and the goals of socialism - that is economic equality. That seems like a Christian kind of thing. There is even an example of it in the book of Acts when the church sold their property and shared the procedures as there was need. Of course, it apparently didn't last and that has been the historical track record.
But I wonder why today’s socialist always work for economic equality by bringing down the rich instead of lifting up the poor? There just seems to be something unhealthy about their grievance with the wealthy. And that does not represent Christianity.
But there is also some things unhealthy with Capitalism and the drive to make profit at any cost. Well, some costs are just too high and I question the sustainability of that system.
We have to remember that Capitalism is a system devised only two centuries ago in Western societies when Adam Smith and other philosophers inquired into the nature and causes of the wealth of nations. That inquiry and the system that eventually developed has resulted in unprecedented wealth and prosperity for more people than any other time in world history. But still not for everyone, as the socialist so aptly and so often remind us.
What many of the socialist point out, and I fear they may be right, is that it is increasingly evident that the success of capitalism cannot be sustained, at least as it is. The ever increasing production of consumer goods and services for an ever increasing population who have an ever increasing demand for more and more can no longer remain the central and singular goal of economics. The biosphere for one cannot handle it. And, as history has often shown, the increasing number of those who do not share in the prosperity will eventually not allow it. Revolutions happen.
Capitalism has undoubtedly produced wealth and prosperity for the nations under its philosophical paradigm but with it also comes materialism, hedonism, exploitation, environmental destruction, broken families and for too many unhealthy communities. In other words wealth doesn't fix everything. It is not the panacea we are looking for. There are still plenty of poor people with all the problems associated with poverty but prosperity also brings its own set of problems.
Error always comes in pairs of opposites. But there is always another way, God’s way, a biblical way. That third way does not yet exist as an economic system. Here’s the deal.
It is unhealthy to pretend that perfection is possible and perfect harmony is attainable. Social equality, in whatever way the Socialist want to measure, is the stuff of dreams, not of reality. But let me be also clear that work for the sole purpose of consumption and consumption for the sole purpose of providing employment is not healthy either.
The goal of a third economic choice should be social and individual health, not equality and not profit. Social equality without personal freedom is quickly reduced to the lowest common denominator. Individual freedom without social equality is highly inefficient for social health since those left on the margins are unable to make their contributions to the whole.
Individual liberty and social justice, under this third economic system, would be a matter of healthy relationships in which both freedom from coercion and freedom for contribution are available for all persons in their communities.
Human beings need freedom more than they need prosperity and more than they need equality. Human beings need freedom to contribute their uniqueness to others just as much as they need freedom to become unique. The third way would purse that kind of freedom with fervent passion.
I agree with Carol Johnston, author of The Wealth or Health of Nations, economics would be transformed if health rather than wealth or equality were the goal of societies. That wouldn't mean that wealth would disappear - there is a measure of prosperity required for health. Nor would it mean that the tenets of capitalism would disappear, since they have proven durable, creative and effective to a large degree.
What it does mean is that if our society would pay attention to what constitutes a healthy community and actively seeks to develop methods contributing to that goal. What it does mean is that if our society would put the central goal of loving our neighbor as our self as the chief end of not only economics but also of politics, then we might just reach the dreams of both the Capitalist and the Socialists.
In Summary: Can we have both individual liberty and social equality?
Here’s another way to frame the debate. Do we want a society based on trying to “keep up with the Jones” or do we want a society based on trying to “take down the Jones”? Seems to me both are untenable. Do we want a culture that promotes the selfish sin of greed or a culture that satisfies the ugly sin of envy?
Envy is an ugly sin. Perhaps it is the ugliest of all sins. Maybe that is why the world seems to be getting more obnoxious and unpleasant with each passing day. Our culture is drowning in the green sea of envy and it is truly a ghastly sight.
Envy is a feeling of discontent and resentment aroused by and in conjunction with desire for the possessions or qualities of another. Envy, unchecked, becomes more than a feeling it becomes an action – gossip, theft, and even murder.
Instead of giving celebration for the good fortune of others, envy broods and conspires to take their blessing away. Instead of giving proper honor to those who have worked hard to achieve, envy cries foul and contrives to take from what others have rightly earned. But, you can never be envious and happy at the same time.
Greed is just as bad if not worse. Greed is really just another form of envy and it can be an even uglier sin, it certainly can be as destructive. James 4:2 says, You desire but do not have, so you kill. You covet but you cannot get what you want, so you quarrel and fight. You do not have because you do not ask God.
Neither envy or greed is a very good option. Neither envy or greed is healthy for individuals or for society as a whole. But there is a third way. Or, at least there could be a third way. I believe a third way is always possible.
Instead of keeping up with the Jones's as Capitalism would have us do, or trying to take down the Jones’s as Socialism would demand us do, how about a system based on serving the Jones’s.
How about a culture that encourages the righteous act of loving our neighbor as ourselves? A system based on the incentive of doing what is in the best interest of our neighbors and not just ourselves. How about an economic system that is interested in the long term health and well being of a community as well as the wealth and equality of it’s individual members?
Christianity promotes and provides for such a social and economic order, a moral system and just approach that results in both liberty and equality, health and prosperity, for each and every citizen. We would call that system agape economics. Instead of the Gross National Product as the standard of economic health and vitality we could have the Gross National Health Index that measures the vitality of our communities. After all, what does it matter if we gain the whole world and lose our own souls.