Democracy. Capitalism. Socialism. Choose Any Three of the Above

By Steve Roth  (from 2016 October 2)

Democracy. Capitalism. Socialism. Choose Any Three of the Above

If you don’t have a big bathtub of oil in the ground, you need all three to deliver widespread economic well-being.

In the millennias-long evolution of human societies and economic systems, we find ourselves today at a pass where three systems predominate, and fitfully cohabit: democracy, capitalism, and socialism. Most countries in the world operate with large doses of all three.

Given that, it might seem odd that there are so many loud and prominent political voices who talk about eradicating one or more of the three. These voices often represent these isms as mutually exclusive (they aren’t), and envision vaguely utopian nirvanas of true, complete socialism, true complete capitalism, or Platonic, non-democratic polities administered by benign, elite philosopher kings (and perhaps even queens).

All of those anti-ism-istic voices are spouting incoherent claptrap. Anti-capitalists on the left, anti-socialists on the right, and anti-democrats along their own fringe, are all simply loony.

Assume for the moment: the dream-goal of a polity, or at least of an economy, is to deliver widespread or even universal thriving and prosperity, economic security, and economic well-being. Now take a look at the countries that have achieved one admittedly rough and flawed measure of that: high GDP per capita. Aside from some petro-states (and their achievements are deeply contestable), no country has ever achieved or approached that goal without all three of the above. Take a look, here from the IMF ranking (middle-east petro-states excluded):

Luxembourg $98,987
Singapore 85,253
Norway 68,430
Switzerland 58,551
Hong Kong 56,701
United States 55,805
Ireland 55,533
Netherlands 49,166
Sweden 47,922
Australia 47,389
Austria 47,250
Germany 46,893
Taiwan 46,783
Iceland 46,097
Denmark 45,709
Canada 45,553
Belgium 43,585
France 41,181
United Kingdom 41,159
Finland 41,120
Japan 38,054
South Korea 36,511
New Zealand 36,172

Now consider, in turn, what each of the anti-ism crowds thinks we should get rid of.

Anti-socialists. While these voices (pretend to) take aim at the notions of anti-capitalist “socialists” who want to “seize the means of production,” in practice and reality this crowd is attacking socialist institutions that are ubiquitous in every prosperous country: government-provided retirement and health care/insurance systems, free public education, government spending on infrastructure and research, programs for economic security, and — in every case — huge redistribution programs. Judging by those countries’ success, these are not the components of a Maoist or Stalinist hellhole or serfdom state. Quite the contrary.

No country has ever achieved much less maintained widespread thriving and prosperity without massive doses of this kind of “socialism.” (Obligatory proleptic response to Singapore and Hong Kong: see concluding note here.) All the history we’ve got suggests that those institutions are necessary to modern prosperity. To suggest that they should be dismantled in fond hopes of some imagined, purely capitalistic, free-market utopia that has never existed on this earth is…lunacy.

Anti-capitalists. There is a “seize the means of production” “socialist” contingent that envisions an imaginary, eventual end to something vaguely defined as capitalism. But despite endless smoldering dumpster-loads of obfuscatory Marxist and neo-Marxist tomes and tracts (yes, there is some good thinking scattered about in them), and vague intellectual gestures towards distinguishing ill-defined things like “private” vs. “personal” property, it’s completely unclear exactly what laws they want to get rid of, or replace.

They might concede, for instance, somewhat reluctantly, that you will be legally allowed to own your Kenny Loggins records. (That’s kind of them.) You might even be free to buy and sell records. But are you allowed to make a profit doing so? Or should we pass laws to make that illegal? If you run a record store or a plumbing business, are you allowed to hire employees for hourly wages? Are you allowed to “own” that business? Are you allowed to make profits based on the sweat of those employees’ brows? Crucially, if not: is jail time the punishment for doing so? If we’re going to “end capitalism,” what laws are they suggesting we should actually put in place, today? Despite (or because of) all those tomes and tracts, their answer remains radically unclear.

As with anti-socialists, the notions of “anti-capitalists” inevitably envision the eradication of institutions that are ubiquitous in (and hence presumably necessary to) thriving, prosperous economies. And as with anti-socialists, that mushy, broad-brush utopianism obscures what’s truly important: the ten thousand institutional details — specific laws, norms, and strictures of property and corporate structure — that make capitalism (and yes, corporatism) both benevolent and pernicious.

And: with those at least vaguely ridiculous notions, anti-capitalists aid and abet their very enemies — delivering live, loaded rhetorical ammunition unto the anti-socialists. Vague, wooly-headed anti-capitalism delivers a wonderfully easy, target-rich environment for hippy-punching.

Anti-democrats. This faction does exist in the political ecosystem of modern, advanced countries. It’s largely an expression, in the intellectual halls of libertarianism, of the anti-“socialist,” pro-property rights, pro-“capitalist” school. Given its logical foundations, taken to their inevitable conclusions, libertarianism ultimately resolves to anti-democratic authoritarianism. (Try a Google search for endless discussions of this manifest reality.) This is why lengthy discussions with libertarians tend to devolve into claims that theyshould be the benevolent dictators. (With the inevitable Churchill quotation in response).

None of this is to suggest that there is a political parity or symmetry among these anti-ists — at least in the United States. Anti-democrats are essentially invisible and voiceless, their message a fatal political non-starter. As for anti-capitalism, try naming one successful politician this side of the Seattle city council (one member) who even makes noises about “eradicating capitalism.” Certainly on a national stage, doing so would be political suicide. (The Bernie movement is, rather, all about the ubiquitous social institutions detailed above, and about pushbacks to corporate power within our heavily capitalistic system.) Anti-socialists, on the other hand, stand at the very pinnacles of power; their voices are manifold, loud, and widely broadcast.

But regardless of their relative political power, all of these these ill-considered, utopian, faith-based, tribalistic anti-isms are a bane on the body politic. At this point in our evolution, capitalism, socialism, and democracy are necessary for any country’s prosperity, economic freedom, and economic well-being. And they all need improvement — just as we’ve been fitfully improving things for hundreds, even thousands of years.

To quote my millennial daughter: “People need to stop throwing out the baby with the bathwater.”

Or — if you’re Grover Norquist — drowning the baby in the bathwater.

2016 October 2

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