Why Americans Get Socialism and Capitalism Backwards
umair haque

I spent my morning today at a regional franchised diner. In the Portland area, that would be Shari’s. In say, much of the South, it would be Waffle House. Both are corporations, more or less, who use a franchise model to distribute their version of their 24/7 diner throughout their regions.

At any rate, I’m there, and I order my food and drink. In either case, that drink would be a Coca-Cola. It’s another corporation with something like a franchise model for distribution and delivery. I listened to an interview with its President and CEO, James Quincey, where he talked about how his vision for the Coca-Cola Company is to be both global and local, that is it has a global brand but yet is local, as to have local cola manufactories for each country and even some local brand suited to the tastes of its country’s consumers. A look at the unusual flavors that Coca-Cola brings to its Japanese consumers can easily tell you how they are best able to customize its offerings to a country’s or region’s consumers.

Now, in all of these cases, these are corporations who have used capitalism to its best for it to become the best or most successful company they can both locally, nationally, and globally. But they are successful in nearly any circumstances, especially a mega-corporation like Coca-Cola, who are successful in capitalist economies, social democratic governments, or dictatorships like China. They adjust to the local situation on the ground. They are more into adaptation and personal customization than simply thinking like every problem is a nail waiting for a hammer to strike down on it from them.

What bothers me about Mr. Hague’s critique of “capitalism = poverty; social democracy = abundance” is that he’s looking at them as ideologies alone and not as apart of a larger toolset. To a fairly large extent, what caused the problem with American Capitalism and Soviet Communism is that both countries used those political-economic beliefs and policies to the extreme and exclusively without using any other kind of economic strategy. These tools are just simply overused in both countries and more tools and better strategies ought to be employed in both countries at their time of collapse.

It’s also very simplistic explanation of things. The actual situation has to be far more complex even if you believe through Occam’s Razor that capitalism is the problem alone. It is not to say that capitalism isn’t any part of the problem, but it is to say that a lot more is going on than just capitalism being the environmental grounds that all of our ills are stemming from. One nation’s history and social-religious beliefs plays a major role, too.

I have one more point to mention. He states, “Charity makes you poorer — it’s a transfer. Social democracy makes people wealthier. Socialism isn’t charity — it is the precise opposite. Socialism is investment. … It is investment that people make in themselves — so that they can enjoy greater wealth — which capitalism will always starve them of.” I dislike that he focuses on that any kind of transfer, from rich to poor or poor to rich is bad and that a more communal kind of investment is ultimately needed in order to a community to prosper, and thus the individuals of that community will prosper on the backs of that communal investment, through some sort of governmental institution or process. It is as if Mr. Haque defines the basic role of government as to invest (through taxes) into unique communities in order to have a more natural distribution of wealth, regardless of it is from rich to poor or vice-versa.

Charity is beneficial because it allows you as an individual have skin in the game of directly making your community better, even if it is a donation to a third party, like a church or a non-governmental, non-profit organization like the Red Cross. And honestly, you can not leave this world without some sort of sacrifice of some sort. It is necessary. And don’t make “moral benefit” as if you get some sort of emotional rush for doing good. That moral benefit doesn’t necessarily belongs to you first, it belongs to the one whom receives charity in the first place.

Part of the function of religion or philosophy is to learn how to react when you are wealthy, and learn how to react when you are not wealthy. Life is much more random and the degree to which that Mr. Haque’s promises that become a member of a social democracy will leave you “richer, wealthier, live longer, and happier — not be poorer but nobler” will widely vary too. Often it is not up to your own efforts to see the results. Life has an odd way of often making any effort, whether it is individually or a government’s role, to work against them.

I do agree with Umair that we need more institutionalized investments so that we have a chance for having a better environment for future success. But as the saying goes, “Past history does not indicate future results; People can and do lose money.” We need a more diverse toolset if we are going to climb out of this abyss we are in. And everyone needs to participate in the climbing.