Whether or not one has invested in Capitalism, Socialism, Communism, Fascism, or any other governmental structure that has existed since the Industrial Revolution in the nineteenth century, the only real difference lies in policy, not principle. Each governmental structure has different premises to indicate boundaries and order, and have unique interpretations on the nature and consequence of human choice. However, modern government--which I lump all these into--operate on the assumption that production is better than non-production. Where the ideologies vary is in who does the producing, who regulates the producing, and what defines reward in each of these systems.
Speaking with a political scientist yesterday, I asked him whether Socialism was an economic structure or an social structure. He immediately brought Communism into the conversation, and it took me a bit of reflection and later research to figure out why. Socialism is a progeny of Communism (developed by Marx, therefore commonly known as Marxism), but Socialism attaches itself to the ideal of fairness. Fairness is a subjective component, which makes Socialism essentially a social theory rather than an economic theory. Socialism is wildly liberal and depends on government control to allot resources, wealth and education, remaining weary of individuals because they're seen as inherently exploitative and destructive to the mass' entitled stream of resources. It attempts to prevent a wide chasm from forming between classes of people, so that they can interact freer and less oppressed.
Communism is much dryer and more ruthless than Socialism. Although production is centralized through the government, as it is through Socialism, production is only performed on a need basis, granting the individuals more free time to interact with each other, and allowing those who produce resources to directly obtain them, because acquisition is based on need, not want. Thus, Communism was created as a cure to the exploitative ills of Capitalism, which itself allows individuals to succeed in a myriad ways, due to a largely deregulated central government.
Communism and Socialism appear very valid on paper, and Capitalism does not. The reason I make such a claim is because the majority of humans are attracted to safety and security, which on paper, Socialism and Communism offer and Capitalism does not. In the former two, you'll always be taken care of and given your equal share, whatever that means. Capitalism adds risk to the equation in the form of individual prosperity and lack of government intervention. It's ironic that reality manifests inversely from the on-paper valuation: In Socialism and Communism, individuals who strive hard blow the mediocrity bell curve and are punished through surrendering and redistributing their resources. They're prevented from an incentive that would push them to shatter the glass ceiling and carve out their own identity. This is not the sole reason Communistic and Socialistic governments fail, though, and it's here I point to the end of the Cold War.
Gorbachov looked at how much the government had spent to keep up with America, and how badly the Russian economy had become, and eventually enlisted Reagan to help balance the budget. Thus, political policies that defer to strong governmental centralization inherently spend more because the government is involved both in legislature and in business. Capitalism allows the private sector to take care of business, allowing government to focus its resources on policy and legislature. Further, Capitalism's allowance and encouragement of individuals to constantly break the glass ceiling provides incentives for perpetual productive progress, favoring those who are more competitively productive over those who prefer entitlements. The political scientist told me that Socialism and Communism are more difficult to sustain because of this strong spending structure, and believed they have a higher potential of working longer if the people are less ethnically diverse. For exmaple, the Chinese deal with Communism better than Americans because the nation of China has less diversity than America, which according to him made America impossible to thrive as a Socialistic or Communistic nation. (Socialism requires the people to agree on the definition of "fairness," which is exceedingly difficult with a larger and more diverse sample population.) I find his theory of ethnicity and Socialism thin, however I appreciate him striving to connect government with people because just like corporations, governments reflect those who comprise the larger social body.
Although this information was fascinating to me, what I was struck most by was his theory of production; he indicated why it was much more expansive than I thought. Having grown up in Communist Romania, he witnessed many beautiful pieces of architecture and places of natural beauty bulldozed and covered with lumbering, rectangular concrete buildings. He said that Communism has a penchant for industrialization because (to paraphrase) the government is the hub of economic means and prosperity. If you held ALL the keys to economic success, wouldn't you indiscriminately and ruthlessly destroy nature and history, in favor of your future? These two types of governments are thus very sensitive to undulations in their power, because unlike Capitalism, their governmental power has two cogs: policy and economics. Capitalism--real Capitalism--allows the free market to function uninhibitedly, allowing businesses to fail and recessions to occur because the market will always swing them around, should it remain unfettered and unrestricted. But that doesn't make Capitalism less production-addicted than Socialism and Communism, it simply makes its techniques and methods different. Capitalism thrives on the individuals compulsively chasing material incentives and creative productive ideas, which allows the government to have a constant stream of taxable revenue.
The political scientist cynically romanticised the demise of civilization and return to primitivism due to how civilization's conflicting governments are all children of the same parent; production and industry. Remove production and none of these have any idea what to do, or what they represent.
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