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.