Saturday, December 3, 2011

Easy Economic Dichotomies: Communism vs. Capitalism

One of the legacies of the Cold War in economic thinking is a simple either/or, good/evil dichotomy between overarching economic systems: communism or capitalism. This simple dichotomy makes capitalism seems good by comparing it with the old Soviet totalitarian system and by making any changes to capitalism appear to be the first steps on the road to communist serfdom. In this way of thinking, legitimate public solutions, or ones that balance public and private, become half-evils, and creative solutions from outside the conventional “state vs. market” framework can’t even be grasped. Most of today’s conservatives and libertarians, as well as many centrists, are still mired in this simplistic construction.
Today’s problems can’t be understood, much less solved, within the conceptual limitations of this simple either/or framework about the overall economic system. Most current economic proposals for change are not about the big system, but involve small changes to sub-system institutions and practices. Examples include promoting a green energy infrastructure or turning all privately-owned corporations into worker-owned cooperatives. These smaller changes aren’t about imposing a total economic system, but about implementing rational programs or changes in law to improve the current state of affairs. Of course, they would require changes in law or different forms of government action, but they are hardly Stalinist communism: even Adam Smith believed that infrastructure was the purview of government, so if government’s going to do it anyway, why not do it in an environmentally friendly way? And such solutions often include a market component as well, or simply re-shape the market so it works under a different set of rules: having workers own their companies rather than absentee stock-owners doesn’t impose state control over the market, it only changes the rules of the institutions operating within it. The question then ceases to be, “capitalism or communism?,” but “what changes are for the better?”

The mere juxtaposition of capitalism to Stalinist communism makes capitalism look better than it is; its own negative characteristics fade into the background. But capitalism does have flaws and even atrocities, and a great many of them. Just because someone criticizes it for them doesn’t make them a proponent of a totalitarian command economy, or anything even remotely like it; indeed, a great many of the economic reforms that Leftists promote would make people a great deal more free, as well as more equal, more secure, more interconnected, safer, and happier.
In the communism/capitalism construction, communism is a state command economy in which all economic decisions are made by a central bureaucracy and enforced by a police state. This tyranny ends up becoming representative of all government action even by government in liberal democracies, such that all public action takes on the taint of “communism,” when in truth, societies have a public sphere define rational and fair policies according to law, including a great many economic policies.  
Communism here is all evil, making capitalism to appear all good – the dichotomy make capitalism out to be far better than it is, because it erases any evils that capitalism might have independently of the flaws of Soviet-style communism. Capitalism is seen as giving individuals freedom in their personal economic decisions, and as requiring a small state, ideally a minimal state, the opposite of the all-encompassing totalitarian communist state, and so is supposedly the natural partner of liberal representative democracy. The fact that private property and markets require vast volumes of law and large police and bureaucratic enforcement mechanisms fades into the background, along with a host of other ills of the system, from the market’s tendency monopoly, its environmental destruction, to capitalism’s strong tendencies towards authoritarian oligarchy, which itself entails the politics of fear and hate, and police state discipline. All these systemic flaws fade away in the juxtaposition with Stalinist communism. See if, communism is evil, capitalism has to be good, right?
But capitalism certainly has these evils, many of which are even admitted by standard economic theory – at least in theory, but then they are dismissed with the idea that it’s better to endure them than to endure state communism. Competitive markets do tend to destroy themselves when competition to reduce prices turns into competition for market share, ultimately creating oligopoly and monopoly. Markets are inherently unequal, and those with fewer dollars have less participatory power than those with more – and those with none are effectively excluded from society. Capitalism does see pollution and environmental destruction as externalities, and so its internal pricing mechanisms cannot stop them. And its quest for growth is limitless, like a cancer, and potentially will eat up all the resources on the planet, if it can. 

Indeed, at current rates, despite the comforts of consumerist lifestyle made available in developed nation, capitalism is on a path to be far more destructive than totalitarian communism ever was: with a billion people living in dire poverty around the world it already oppresses more proletarians than the Maoist-Leninist states ever did, and by creating a global-scale environmental crisis capitalism is on a path to bringing down all the world’s civilizations and perhaps, under the worst-case Venus scenario, to wiping out all life on earth forever. These ills are part of capitalism, independent of whatever ills communism might have. 
These are what critics want to change, and they are right to aim to do so. Just because communism was totalitarian doesn’t mean that capitalism is perfect; and as we aim to improve our economy it is entirely acceptable to criticize and seek to change, and we have plenty of ways of doing so without falling into the conceptual trap of thinking that any and every change will make us into Bolsheviks.   

1 comment:

  1. Fool with a KeyboardDecember 3, 2011 at 1:56 PM

    "...with a billion people living in dire poverty around the world [Capitalism] already oppresses more proletarians than the Maoist-Leninist states ever did..."
    Would these same billion people be any better off under any other functioning alternative? Would their lives be significantly better? I ask this not to argue that capitalism is the best alternative (which would be entirely ignorant to your point), but to ask whether capitalism actually oppresses these people or simply fails to better them?