By: Bernard Falis

We’ve all heard how diametrically opposed capitalism and socialism are, and whenever a pundit really wants to insult someone they disagree with nowadays, especially in America, they just call them a socialist, e.g. FOX News and Obama’s Administration. But are they really that dissimilar?

To break them both down into their fundamentals: socialism is social ownership—which, let me emphasize—is NOT the same as government ownership, and capitalism is, essentially, a free market controlling the means of production by supply-and-demand. The two aren’t necessarily mutually exclusive. Neither system is exactly that attractive for public policy if taken to the extreme. With socialism you get public policy, generally determined, though not always, by a government, influencing private policy and rights, which can get quite messy if the majority of the public want to infringe upon your rights. (This, of course, is exactly what the Bush’s Administration did with the Patriot Act, thus making Bush more of a socialist than Obama). A capitalist’s free market is kind of free flowing and abstract. Of course plenty of people can define what a free market is, though a lot of those definitions seem to contradict in more ways than one; I mean, it sounds so simple, just an economic market that’s free of constraints by government. Actually, the truth is a little more nuanced than that.

A free market is determined and regulated by the people that inhabit it. It can, though, become tilted, i.e. not-so free of a market. This is determined by the flow of capital. If the flow of capital is not as fluid, then there is no Adam-Smithian “invisible hand” (which gets later defined by Smith as a moral framework for a free market), and thus no self-regulation. As much as libertarians want to believe that a non-(de)-regulated state would be best, in which the “free” market ruled all, that simply wouldn’t work. An absolute free market would be a form of socialism, and here’s why.

As stated earlier, socialism is social ownership, where some concentrated form of power controls the flow of capital. Generally, on a large basis, this social ownership manifests itself in the form of a government. But for the sake of argument, could social ownership be concentrated in a select group of people, citizens with no government standing or partisanship, but rather is, to keep it topical, a group of corporate executives? It is possible, it is happening. We live in a society where the flow of capital is controlled by a group of private citizens that, in order to stay rich, hoard the capital, which happened in every totalitarian power, in every feudalist power, and, especially, in every socialist power. In essence, corporate power is now our social ownership.

The details are different, but the very core of America’s socioeconomic system resembles a socialist state more than people want to admit. This is partially due to residual effects of the Red Scare of the Cold War, in which our associations with anything socialist, communist, Marxist, anarchist, or anything in between, is skewed by a century of propaganda that told us we just need to keep buying more and more to fuel capitalism, to fuel the American Dream, to fuel the fight against the Soviets, against the ‘other’, so that they, whoever they might be, wouldn’t nuke us. A generation, the Baby Boomers, sucking off the teat of anti-socialist rhetoric and then running the nation into the ground. But materialism doesn’t buy the perfect system. Looking behind the curtain as to who’s peddling all those things we buy and you’ll find it ain’t Uncle Sam, it’s someone controlling the flow of capital—just less conspicuously, because, if you hadn’t noticed, he was behind a curtain.