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Please start at [3:00]

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Economic Update: Capitalism vs. Socialism

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CONFUSING DEBATE
"confused, inarticulate debate"
"What exactly is being debated?"
"Why is there this confusion?"

[4:03]
CAPITALISM IS A SYSTEM THAT HAS EXISTED FOR 300-400 YEARS:

"Here's the reason. Capitalism has been with us for three to four centuries and I mean capitalism as an idea but also capitalism as a a reality, existing as it did at first as a national system in what we now call England, spreading there to the rest of the British Isles, to the western Europe, then to North America, and eventually to become the global system we know today."

"So we have lots of examples of a capitalism that has been around for three, or maybe a bit more centuries."

SOCIALISM AS A CRITIQUE OF CAPITALISM:
"Socialism is really quite new in comparison. It arose as a critique--as a resistance if you like--to capitalism."

DIVERSE FORMS OF SOCIALISM:
"And as socialism has spread over the entire world in the last 150 years or so, it has of course settled into very different countries and very different levels of economic, political, and cultural development, and so you get it, you guessed it, a lot of diverse forms of socialism, diverse forms of capitalism--and they're always changing, so a debate between them has to take a lot of variation into account, and an awful lot of people haven't the time or interest or the attentiveness to take account of the differences."

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POSITIVE ASPECTS OF CAPITALISM:

[7:42]
Argument #1: "Capitalism has shown itself to be very dynamic technologically."

"It is a system in which there's constant pressure to come up with a new thing, a better thing, or if not a better thing, a new thing that you can sell is a better thing, and so we have modern technologies of all kinds which capitalists and those who like capitalism celebrate."

Argument #2: "The rise of capitalism is the rise of the city, of the urban coming together of many different people into a cultural diversity that for many--myself included--very attractive as a way to organize life."

"Capitalism has delivered urbanism, and that's a positive in many ways."

Argument #3: "Capitalism has brought the world together. We really can speak of a global economy in a way this race of human beings never could before. We're linked by shipping, by telecommuting, by the internet. You know we have a global system.

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POSITIVE ASPECTS OF SOCIALISM:

[9:06]
Argument #1: "It has gone way further in the direction of egalitarianism--making us all equal in some fundamental set of ways--than capitalism could."

"People are not as divided. People are not as different from one another in their standards of living, in their access to material goods in most socialist societies compared to capitalist; and if you're in the bottom half of this society in terms of poverty and access, well then socialism has really lifted you up in a way that capitalism has not been able to do."

"It has really done something for the mass of people at the bottom in most of the cases where it has been instituted."

Argument #2: "Socialists are famous for providing kind of universal access to basic things human beings need--education, transportation, hospitalization, medical coverage, and so on, and these are positive aspects.

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NEGATIVE ASPECTS OF CAPITALISM:

[10:30]
Argument/Counterargument #1: "Well, capitalism has had an awful to to do with war."

"It's not unique, other systems went to war, but the wars capitalism has produced--particularly the two big ones in the 20th century --were called world wars and were devastating on a scale we have not yet seen in any socialist environment."

"We have not seen wars between socialist countries that look anything like what capitalism produced."

Argument/ Counterargument #2: "Capitalism has been kind of ruthless" in the treatment of the poor;

"The is poverty and then there is how you define and treat poverty."

"...socialism kind of not so good [in treatment of the poor] and not so bad but better than capitalism."

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NEGATIVE ASPECTS OF SOCIALISM:

[11:35]
Argument/ Counterargument #1: "Socialist have often been kind of poor when it comes to civil liberties and civil rights, tending to give government more power than capitalists are willing to give it, and so you get a kind of negative association within socialism for the concentration of power in the state."

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"THE SYSTEMS ARE COMPLICATED."

[11:55]

Capitalism & Socialism both have strengths and weaknesses.

arguments & counterarguments

"WHY IS THERE SO MUCH CONFUSION?"

"There's so much confusion because we don't agree upon the definitions and we haven't for a long time."

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[12:39]
#1 DEFINITION OF CAPITALISM:

"CAPITALISM is when enterprises are privately owned and operated."

Enterprises are:

owned by individuals or groups of individuals

who set them up, own them, and run them."

"SOCIALISM, IN CONTRAST IN THIS DEFINITION, IS WHEN THE GOVERNMENT DOES THAT."

"It's not private groups of people. It's not private individuals. It's officials of the government who:

own, who operate, who run the enterprise, or at least control it."

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#2 DEFINITION OF CAPITALISM:

[13:12]
"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 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

controlling

and directing who gets what and who gives up what for what."

"market vs. planning, it's often called."

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INSTRUCTIONS:

As you are watching the video, please pause it from time to time.

Dr. Wolff's lecture is broken down for you visually on the padlet.

Read over the notes to review the information presented to begin to process the key concepts.

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political systems

debated

arguments/ counterarguments

positive & negative aspects

capitalism

socialism

diverse forms

economic, political & cultural development

technology

urbanization

global economy

global systems

egalitarianism (making us equal)

products = goods & services

resources

production

standard of living

poverty

war -WWI & WWII

ruthless

civil liberties (freedoms)

civil rights

government

power of the state

enterprises (business/company)

privately owned & operated enterprises

state owned/government & operated enterprises

market exchanges

free market

buyers & sellers

negotiate

goods & services sold or produced

"market vs. planning"

employees ('workers')

employers ('bosses')

feudal system/feudalism; feudal lord; serf

slavery

democratic socialism/ social democracy in Scandinavia & Western Europe

worker cooperatives

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#3 DEFINITION OF CAPITALISM

[13:55]
"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..."

[14:14]
"WHEREAS SOCIALISM
the workers who do the work are themselves their own bosses."

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[15:43]
"In the definition that focuses on private versus state enterprises, let's take a closer look..."

PROF WOLFF'S REFUTING CLAIM #1:
"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."

"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."

PROF WOLFF'S REFUTING CLAIM #2:
[16:53]
"In feudalism, where the division is between the lord who operates 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 there 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 one is the opposite. Uh, uh, makes no sense, isn't a reasonable way to go."

[18:02]
PROF WOLFF'S REFUTING CLAIM #1:
"So, then how about the other one--market versus planning? Oh, the same problem. Did slave 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 sell people, they bought and sell land, etc."

"So the presence of a market way of distributing things versus a planned or organized way that exists in all 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...shouldn't be part of the 'debate' between socialism and capitalism."

"So what should the capitalism vs. socialism debate be about then?"

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PROF WOLFF'S ARGUMENT #1:
[18:57]
"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 goods and services we all need."

"In the slave system, it's the master and the slave; in the feudal system, it's the lord and the serf; and, in the capitalist system, it's the employee and the employe. One is a dominant minority and the other is a subordinate majority, and whether the state or a private person is the exploiter or the dominator or the person at the top is really a secondary matter."

[19:46]
"Socialism, if it means anything, means the end of a system in which a few people and operate effectively the economic system."

"On that basis then, what sense do we make of the last 200 years of the so-called debate, and the answer is they were debating the wrong thing."

"They got caught up in a debate, which is perfectly okay to have, between whether it's better to have the government do something or whether it's better to have the private sector do something."

"I understand that debate. That's fine.

[20:26]
"That's got nothing to do with capitalism and socialism. You can have that debate without pretending that when government hires people to do something, you've got a fundamentally different system than when the private sector does. The answer is you don't much, and ask people who work in private sector and ask people who work in the public sector and ask people who go between the two, and they'll tell you not all that big of a difference."

"One of the reasons you had all the troubles in the so-called socialist world after the first revolution that established socialism--the Soviet revolution in 1917--one of the reasons they had the difficulties they had afterwards is that the hopes and dreams of people for a fundamentally different system, a real freedom from the small group who control everything and the mass who do what they're told that they inherited feudalism or from slavery, they had hoped that the revolution to socialism would end all that, and they discovered to their deep pain and sorrow that they hadn't done that. They had gone from a private capitalist to a state capitalist--a private person telling them what to do in the factory to a government official telling them what to do.They remained employees. All that had changed was the particular position of the employer and exactly who he was."

"...with this focus on the state, you had basically two kinds socialism that emerged over the last 150 years. The first kind saw the state coming in but not taking over production. What it did was regulate, control, limit what the private employer could do, to and with his/ her employees. That's the kind of socialism we find in Scandinavia, in Western Europe. It's the kind of socialism that is often referred to as democratic socialism or social democracy."

[22:46]

DEMOCRATIC SOCIALISM/
SOCIAL DEMOCRACY:

"The government is brought in as a limit, as a shaper, as a context for what remains private employers and private employees. So that's one kind of socialism."

[23:03]
"The other one was when the state took a more interventionist, more active role. It didn't just regulate. It didn't just limit and control. It took over the enterprise. The state officials didn't tell the private employer what to do, they replaced the private employer and substituted state officials and you know the examples of that: Russia--the Soviet Union, Republic of China, Cuba, Vietnam and so forth. There the government took a more active role."

"But again, whether the government limits private employers or itself becomes the employer, you still retain the employer-employee relationship. You're not really about capitalism versus socialism."

[23:56]
"It's much more accurate, much more consistent with history, to see this as a struggle between private capitalism and state capitalism, and whatever you may think about that struggle, and however you may wish to evaluate the one kind of capitalism relative to the other--and many people have strong feelings about that, which I respect--it ought to be kept separate from the question of an altogether different system--one that does away with the employer-employee relationship, sees it as the problem, and sees the alternative where we need to go next, and what would that be?"

[24:42]
"Let me rush to assure you not fanciful new idea, not something cropping out of my head or the head of anybody else, but something that is as old as the human race and that needs now to be brought forward in a modern form to solve problems that the other systems--slavery, feudalism, capitalism--could not solve, and the number one problem to make it all come together is the desire of human beings for democracy, for a society in which each of us counts, each of us has value, each of us has an equal say in making the decisions we have to make collectively if we're going to live in communities and not as isolated Robinson Crusoes on imaginary islands, to live together, to work together--this idea. We're all going to have a say. We're all going to have an equal say. We're going to come to our decisions collectively, working it out.

[25:52]
"It's this democratic idea that inspired, for the last centuries, the decision by communities to do away with kings, to do away with Emperors, to do away with it away with people who thought they could and should lead the society and exclude the rest of us from equal participation or any participation at all."

"We fought for that in our communities, and now we are ready to fight for it in the workplace where we spend most of our lives--at least as adults."

"...the workplace is a crucial part of your life, and if you believe in democracy, if you understand that hunger, then you want a workplace that institutes, that establishes democracy, and you know what that means....

[26:53]
...it means that socialism for such people is about doing away with the employer-employee--doing something which has been called worker cooperatives for thousands of years, communities of people carrying out production. They exist today in Spain where millions of people are involved, in Italy likewise, and in many many other countries including the United States."

"Workers have a long-standing hunger to organize work that way. Every generation of young people gropes their way."

[27:29]
"Well, let's recognize that we have misspecified the debate between capitalism and socialism long enough."

"Put aside the struggle between capitalism of a private sort versus capitalism of the state sort."

"Let's get on with the business of a real transition, a real debate between capitalism and socialism where one is the undemocratic organization of the workplace into employer and employee and the other one is the dramatic reconstruction of the workplace so it meets what we have all desired and then can be the support for democracy in our politics where it is now a mere formality in elections that are brought and sold like the commodities coming out of our factories and our stores to the chagrin and the shame that most people paying attention already feel."

[28:34]
"Capitalism and socialism is the struggle. It is not surprising that in it's early phases of the last century or so, it's struggled to get its ideas clear. Those struggles have now led us to be able to formulate a greater clarity,  and it is my hope that I have given a reasonable rendition of it, so that we can move forward to a much more successful struggle for improvement than we were able to do so far."

"Everything in the past is a step that got us to where we are--no glad-handing dismissal of those who went before. Their struggles enable me to see what I can see and what I can share with you.