Are the Terms "Socialism" and "Capitalism" Still Useful?

Socialism and Capitalism are the two great economic systems to arise in Modernity on the basis of modern assumptions about human nature and history. Both may be regarded as Christian heresies, especially Marxism. However, neither exists in anything like a "pure" form today. People tend to invent clumsy neologisms such as "state capitalism" to describe the political economy of China and it has been asserted on this blog with great fervor that the Soviet Union was not socialist. Even the most strongly capitalist country in the world, the United States, is far from the "unbridled, robber baron Capitalism" of the Nineteenth century, with its anti-trust legislation and its welfare state apparatus. And, after all, when the President of the US decides when the CEO of General Motors needs to be fired and the federal government regularly decides on political grounds which banks will be allowed to fall and which will be propped up - well, you get the idea. Whatever it is - it isn't anything Adam Smith would recognize as Capitalism.

I would suggest that the terms "Capitalism" and "Socialism" get in the way of debate. Often, our greatest problem is not finding agreement, but more modestly, finding clarity on our disagreements. And here is where these terms let us down.

For example, to claim that of course a thinking Christian simply must be a socialist surely means different things to different people. For many, I'm sure, it means little more than "sharing is good." But it does not necessarily mean big government and social engineering. Yet, it is difficult to point to a historical example of socialism that did not actually involve big government and social engineering. To take the socialist government of Spain for instance; one could get the impression from its recent legislative record that socialism has mainly to do with sexual permissiveness and institutionalizing the sexual revolution. And yet, socialism is supposedly an economic system.

Or, on the Capitalist side, what sense does it make to call a system of multi-national corporations that specialize in obtaining government grants, tax breaks, and other financial incentives from national governments rather than actually producing things and marketing them? What is going on when a government declares that a "private" business is too large to be allowed to fail? It is a well-known fact that increasing government regulation favors large businesses and often creates insurmountable obstacles for entrepreneurial small enterprises, which cannot afford the costly compliance with byzantine regulations. It seems that the line between big business and big government blurs more with each passing year.

I would suggest that we would do well to stop using the terms "Capitalist" and "Socialist" for the foreseeable future and, instead, define the political options in terms of "Distributivism" and "Corporatism."

Let us define Distributivism as an economic philosophy that stives to keep property distributed as widely as possible through widespread home ownership, preservation of the family farm and the encouragement of small, family-run business as the major employers in the economy. Monopolies, excessively large corporations and multi-nationals would be severely limited, if not eliminated.

Let us define Corporatism as a system in which the goal is to build up a total social system consisting of a partnership between government regulators and large, multi-national corporations, which strives for efficiency, equality and continuous economic growth. Corporatism has more than a little in common with Fascism, although the militarism and aggressive nationalism need not necessarily be part of Corporatism.

To use these terms would have several clarifying effects.

First, it would become clear that both major parties in the US lean more in the Corporatist direction than the Distributivist, so US voters do not really have a serious choice under the present system. The same goes for the Canadian political parties.

Second, it would frame the basic philosophical choice as being between a large, managerial, bureaucratic government/corporation structure and little need for civil society, on the one hand, and a small, limited government and a culture of small businesses and vibrant civil society, on the other.

Third, it would allow one to be in favor of entrepreneurship, small business, and limited government without being in favor of multi-national corporations and their tendency to exploit labour and blackmail governments.

Fourth, it would put the spotlight on what needs to be given up in order to achieve progressive social policies such as the increase of the welfare state and government mandated political correctness, namely civil society.

Fifth, it would allow Christians to see that their own interests do not coincide with either of the two great Enlightenment systems.

Sixth, it would make allow for public debate to center on pressing issues that do not get much of a hearing at present, such as the implications for freedom of a centralized social class of experts and managers replacing parents and ordinary citizens in the formulation of policy and law and the complicity of governments in the violation of the principle of subsidiarity and how this is weakening civil society.

The shift of the terms of the debate from an obsolete preoccupation with two failed economic systems would benefit everyone except those who have a vested interest in the continuation of our present social trend toward the all-encompassing, bureaucratic, managerial state and the soft totalitarianism it embodies.