Fuzzy thinking is rampant among us. Michael Moore, out with his new movie “Capitalism: A Love Story,” is often an incisive critic of corporate abuses and powers that threaten to weaken democracy, but he is inaccurate when he declares that the “opposite of capitalism is democracy.” In the ongoing debate on health care legislation, some of Obama’s opponents charge him with trying to institute socialism. Again, inaccurate. Confusion abounds. What is capitalism? What is socialism? Only a historical perspective can enlighten us.
Nineteenth-century capitalism was not a pretty picture. Look at Marx’s Das Kapital, the novels of Charles Dickens, or the Irish famine of mid-century. Often quoting factory inspectors’ reports, Marx’s book contained such lines as “that boy of mine when he was 7 years old I used to carry him on my back to and fro through the snow, and he used to have 16 hours [of work] a day . . . I have often knelt down to feed him as he stood by the machine, for he could not leave it or stop.” In novels like Hard Times , Dickens depicts the ugliness that the capitalism of his day often revealed—his fictional Coketown “had a black canal in it, and a river that ran purple with ill-smelling dye, and vast piles of building full of windows where there was a rattling and a trembling all day long, and where the piston of the steam-engine worked monotonously up and down.” During the Irish famine, roughly 1 million people died between 1846 and 1851. The laissez fairecapitalist ideas of the time were hostile to almost any government regulation of business or private property, especially any that would curtail employers’ rights. Thus, the British government refused to stop the export to England of food grown by starving Irish peasants because it was the private property of absentee English landlords.
In reaction to such capitalism, Marx and others began a socialist movement that gained strength as the century progressed. In contrast to capitalism—in which the means of production such as land, labor and machinery are primarily owned by individuals and businesses that produce and exchange goods and services to earn a profit—socialism advocated government ownership of key areas of production and greater control and regulation of the economy. But just as late twentieth-century capitalism had evolved as compared to its earlier version, so too had socialism. The essence of capitalism remained private ownership and the earning of a profit; and the essence of socialism, greater government ownership of at least some key areas of production and greater regulation of the economy. But the competition between capitalism and socialism had produced hybrid systems over much of the industrialized Western world by the beginning of the twenty-first century. A U. S. State Department publication in 2001 declared that though “the United States is often described as a ‘capitalist’ economy,” it “is perhaps better described as a ‘mixed’ economy, with government playing an important role along with private enterprise.”And in Western Europe, governments tended to exercise even greater influence.
For much of the twentieth-century, the term “socialism” was used in two very different ways. Communist governments referred to themselves as socialist, as in the Union of Soviet Socialist Republics (USSR), and they were not democratic. But in Western Europe, socialist parties abided by the democratic process and often came to power in various European countries. Since they tended to alternate in office with more conservative non-socialist parties, however, it was not really accurate to refer to their countries as socialist. And just as socialism could operate in a democratic or non-democratic setting, so too could capitalism. But the non-democratic type of capitalism existed on the right side of the political spectrum, as in General Pinochet’s Chile (1973-1990), and not on the left.
Socialism could operate in a democratic or non-democratic setting, so too could capitalism
Socialism could operate in a democratic or non-democratic setting, so too could capitalism
Capitalism itself is not a political system like democracy, but an economic one. The conservative economist Milton Friedman once wrote, “The social responsibility of business is to increase its profits.” And the American sociologist Daniel Bell wrote in The Cultural Contradictions of Capitalism (1976) that “in its products and in its advertisements, the corporation promotes pleasure, instant joy, relaxing, and letting go,” and that this situation left “capitalism with no moral or transcendental ethic.” Although it can be argued that capitalism has certain moral ramifications, in its essence it is neither moral nor immoral, but amoral.
To make up for this lack of a moral ethic, reformers in Western Europe and the United States between 1890 and 1914, often referred to as progressives, suggested various reforms. U. S. progressives advocated social legislation such as the prohibition of child labor, improvements of women’s working conditions, and comprehensive social insurance for sickness, unemployment, and old-age poverty. In 1912, they put up the former Republican president Theodore Roosevelt as the Progressive Party candidate for president, but he was beaten by the Democrat Woodrow Wilson. Although Roosevelt was no socialist, he and other progressives supported some of the same social reforms as did U. S. socialists and he was critical of the Republican candidate, President William Howard Taft, for being too beholden to big business.
U. S. reformers were often influenced by previous reforms in Europe. In the 1880s, the conservative German politician and statesman Otto von Bismarck pushed through three measures that provided nationally-backed insurance for sickness, accidents, and old age. But many German socialists considered him their greatest enemy, and he took his actions partly to weaken these opponents. Between 1906 and 1912 Great Britain’s Liberal Party enacted an Old-Age Pension Law, a National Insurance Act, medical assistance for school children, “workingman’s compensation,” and minimum wages for some sweatshop workers. Many of these measures were only applied in a limited way, but to help the state contribute to these programs it raised taxes, especially on the wealthy. In both Germany and Britain, some who objected to these policies accused the government of enacting socialism. But in Britain, as in Germany the charge was inaccurate. One of the leading forces behind these new government actions was Winston Churchill, then a member of the Liberal Party but never a socialist, and he began and ended his career a member of the Conservative Party and while a Conservative twice served as prime minister
Cries of “socialism” and “socialist” were also often heard in the United States when reformers suggested government actions to address social problems for which capitalism provided no solution. One of the great progressive reformers was Jane Addams, who advocated women’s rights and was a founding member of the American Civil Liberties Union (ACLU) and the National Association for the Advancement of Colored People (NAACP). She was often falsely accused of being a socialist or communist, but was later (1931) awarded the Nobel Peace Prize. When Franklin D. Roosevelt proposed Social Security opponents also cried “socialism.” In the 1960s when Medicare was being debated, the American Medical Association (AMA) had a leading actor speak out against it on a record entitled “Ronald Reagan Speaks Out Against Socialized Medicine.”
One irony of the current debate is that many of the reforms earlier proposed by socialists or progressives accused of being socialists have since become law. The poet and Lincoln biographer Carl Sandburg, a former socialist who later supported Democrats such as Adlai Stevenson and John Kennedy once said of the 1960 Democratic platform: “That’s a very good imitation of the national Socialist Party platform adopted in Chicago in 1908.” From expanding human rights, including the rights of women and African-Americans, to establishing government programs like Social Security and Medicare, history has been on the side of progressives. Although Margaret Thatcher in England and Ronald Reagan in the USA convinced many people in the 1980s that “big government” was bad, the long-term trend has been to rely more on government to fix problems that capitalism does not adequately address. In the USA in 1955 (before Medicare and Medicaid), Social Security and health care accounted for 7 percent of federal expenditures; by 1995 it escalated to 40 percent.
There is no doubt that many evils have existed in systems that have called themselves socialist (think of Stalin’s crimes) or capitalist (as some of Michael Moore’s films depict) —though no fair-minded person would argue that the latter examples are as monstrous as Stalin’s evil. But name calling, fuzzy thinking, and scare tactics do not contribute to meaningful political solutions to complex problems. In September 2009, President Obama stated “it’s an argument that’s gone on for the history of this republic, and that is, What’s the right role of government? How do we balance freedom with our need to look out for one another? . . . This is not a new argument, and it always evokes passions.” He also said that “even though we’re having a passionate disagreement here, we can be civil to each other. And we can try to express ourselves acknowledging that we’re all patriots, we’re all Americans and not assume the absolute worst in people’s motives.”
There is plenty of room for legitimate debate on all aspects of the present health care legislation, including the desirability of “a public option” to provide more competition to private health insurers. And honest criticism of corporate and government abuses, inefficiencies, and undemocratic ways should always be welcome, but not fuzzy thinking and scare tactics. In the 1880s, the conservative German chancellor Bismarck admitted that he had borrowed some socialist ideas and declared: “If you believe that you can frighten any one or call up specters with the word ‘Socialism,’ you take a standpoint which I abandoned long ago.” Like Bismarck, we too should abandon such fear.
Walter G. Moss
Walter G. Moss is a professor of history at Eastern Michigan University. His most recent book is An Age of Progress?: Clashing Twentieth-Century Global Forces (2008).
Republished with permission from The History News Network.