Danny Keating

Capitalism versus Socialism

August 17, 2019

By Danny Keating, Director of the Louisiana/Mississippi HVAC Insider

Socialism seems to be becoming more popular every day in our country. Once again, a little look at history easily dispels the notion that socialism is a superior form of government or even a superior form of lifestyle. Now, I realize I am ‘preaching to the choir’ since many of you are climbing in and out of 100+-degree attics and are doing so for very capitalistic reasons. Been there, done that. I applaud both you and your work ethic.

Danny Keating

Look up the definition of ‘capitalism’ and you will see “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” In simpler terms capitalism is an economic system. In this system the government plays a secondary role. People and companies make most of the decisions and own most of the property. The means of production are largely or entirely privately owned (by individuals or companies) and operated for profit.

What’s bad about capitalism? What’s bad is that the focus on profit can at times be obsessive and lead to social and economic inequality. The people that control the means of production tend to accumulate more wealth than the workers who helped to create those profits for the wealthy. In other words, “if you are smart and work hard you might become rich”. There will always be inequalities in any society regardless of what we do. That is a fact of life.

What’s good about capitalism? The results! Thanks to market capitalism and economic freedom, almost all Americans belong to the global top “one percent.” Greater economic freedom correlates with better outcomes in schools (both public and private), higher literacy rates, lower infant-mortality rates, longer life expectancy, and a cleaner, safer environment. A free market economy has two key advantages. First, it allows for individuals to innovate. Individuals have the freedom to create new ideas, new products, and new services to sell for profit. Second, they are not required to only produce what the government tells them to produce.

No economic system in history has been as successful at lifting people out of poverty as that of capitalism based on principles of economic freedom. Economic freedom has done more for the poor throughout the world than any taxpayer-funded social program or welfare check ever could. The embrace of capitalism and the defeat of serfdom in pre-industrial Europe led to the most dramatic increases in wealth in the history of the world. The industrial revolution, which was based on foundations of individual freedom, private property, limited government, and limited regulation, improved the lives of millions of people in the Western world. Not only did this lead to the rise of the middle class, it also spurred innovations in health care, education, and other social programs. As a result of these freedoms, and the innovation and wealth that they brought with them, the United States became the most prosperous country in the world.

It was no accident. History tells us that in 1620, the Puritan Pilgrims arrived in the “desolate wilderness” of Plymouth, Massachusetts. Seeking escape from religious persecution in Europe, the Puritans risked their lives crossing the Atlantic to establish a new colony in the wilds of America. The Pilgrims decided that their new community would practice collectivism (socialism). All labor was communal, with men raising crops for all families, not just their own, and women engaged in domestic chores for their neighbors. If you are interested you can ‘Google’ the words of the Pilgrims’ Governor, William Bradford, as he described the folly of embracing the theory of social collectivism.

The point being is that the Pilgrims, a pious and decent people, discovered that even the best of men cannot thrive under socialism’s incentive-crushing system. This experiment with socialism failed miserably. The Puritans, a selfless, righteous people, discovered that government cannot deny man’s inherent desire to work hard to provide for his own family and be rewarded when his labor exceeds his neighbor’s efforts.

Having learned a valuable lesson about human nature, the Pilgrims established a new economic system that encouraged and rewarded personal initiative. Instead of a collectivist labor force, each family was given a plot of land on which to grow their own crops. Soon, each family was pulling its own weight. In fact, the harvest was so bountiful that the Pilgrims were able to trade with local Indians, and the colony prospered. You can also ‘Google’ Governor Bradford’s words on the results of their individual efforts.

I think I understand the appeal of socialism. Why would anyone not want an equitable and fair society in which to live and raise a family? The problem is that every example of socialism we look back on in history has been a failure. The dilemma is that the people who have suffered under socialist governments never want to go back. It seems like the only people who think it is a good idea are the ones who have never lived under socialist rule.