There’s been a lot of talk about the economy lately. But do we know enough to determine the differences?
I believe there are still a few of us who took an economics course from Professor Rodney Mitchell at KSTC. He insisted that we recite the four types of economic systems perfectly. He pointed out that there are only four types of economic systems.
Mitchell has also made it clear not to make the mistake of defining political structure by economic presence. Therefore, communism could operate under a monarch or fascism under a democracy. Remember we are discussing economics; not forms of government.
Here are four economic systems that you had to recite perfectly in order to succeed in Rodney Mitchell’s economics courses, of which I have had several. Here they are taken from my handwritten notes from 1969:
Communism: An economic system that has or advocates collective ownership and central control of all means of production.
Socialism: It has or advocates collective ownership and control of the main forms of production.
Fascism: Presents or advocates individual ownership and collective control of many means of production.
Capitalism: Individual control and ownership of most of the means of production.
Professor Mitchell pierced us with 25 economic terms and they help to know the differences. One amazing thing is how the United States fought “fascism” during WWII in regards to what was done to our economy at the time. Take a look at the definitions above and see if you can note a curiosity for what we did in WWII to defeat fascism.
Nowhere do I see “democratic socialism” listed to define a system. I lack a few hours in economics to get a major, but somehow they’ve left out “democratic socialism.”
I noticed that this term was often used to cover the destruction of capitalism by some at various times in past history. The likes of Stalin, Castro, the rulers who recently changed Venezuela from the most prosperous country in South America to one of the poorest, China and the USSR.
Look up the old names of many previous “democratic socialist” nations.
We even have a US senator from a northeastern state who spent time in the USSR and Cuba to learn more about “democratic socialism.” We have a member of the US House who makes his main topic how we can become more âdemocratically socialistâ.
Let us now think of these “democratic socialist” nations.
They have struggled to motivate citizens to be productive. There was little incentive to work hard. Do we now see such a feeling in our nation?
These “democratic socialist nations” have struggled to build up capital. The word profit was even sometimes forbidden in these nations. And if any of them made a “profit,” he could be shot. Pol Pot and Stalin and other âdemocratic socialistsâ despised the bourgeoisie. Karl Marx used such terms in âDas Kapitalâ, when he extolled communism and wanted a more âjustâ society without bourgeois capitalists. In âDas Kapitalâ (1867), Marx proposes that the driving force of capitalism lies in the exploitation of labor, of which unpaid labor is the ultimate source of surplus value. (alias: profit)
Landowners and shop owners have sometimes been imprisoned or killed in the interest of forming socialist role models. Famine, in many cases, arose due to the collectivization of private means of production.
I can give you more examples of the failure of “democratic socialism”. What this clearly reveals is that there is a reason economics is called “the gloomy science.”
But things have changed a lot if we remember.
The Union of Soviet Socialist “Republics” (aka USSR or Russia today) collapsed due to the aforementioned constraints of socialism. The main problem is that no one had a personal interest in working and they certainly had little skin in the game because the government owned everything. Russia is still far behind the new neighborhood capitalists, the Chinese.
Deng Xuaoubgm, a leader of the People’s Republic of China has publicly stated that “It doesn’t matter whether a cat is black or white as long as it catches mice.” Which was a very cautious way of saying: let’s talk a lot about centrally planning democratic socialism and open the door to greater capitalism. Since then, I have witnessed a booming society while I was in China.
They are in fact more capitalist than we are. China now has its own capitalist stock market which creates the necessary capital. Plus, in just a few decades, they’ve built the largest middle class in the world. Mainly because of the hard work of the Chinese and the liberation of their personal interests and ownership of their hard work.
The die-hard ‘democratic socialists’ will point to the Scandinavian countries as their savior and their model, which is also wrong because they have reformed many of their failed socialist programs.
Have any of you noticed the fruits of our experience of becoming more and more a Socialist Republic here in the United States?
Mark Perry, member of the American Enterprise Institute, sums up the fault of socialism here.
âSocialism is the big lie of the twentieth century,â he said. âWhile he promised prosperity, equality and security, he delivered poverty, misery and tyranny. Equality is only achieved in the sense that everyone is equal in their misery. It is a system that ignores incentives.
This is the model Dr. Perry is talking about. How do you like the results so far in the United States?