Capitalism/Democracy v Socialism

Other day I’m having a pleasant chat with a fellow and he blurts out something about the left being socialists. It’s clear to me after listening he has no idea what a socialist is and what they do. [I do agree that the American left is socialist and getting more socialist.]

In America today, we have an economic system and a political system.

Our economic system is — theoretically — capitalism, while our political system is democracy within a representative republic. You will get an argument that our political system is also capitalism.

Socialism is both an economic and political system.

So, what’s the difference, Big Red Car?

Obvious question, amigo. Let’s take a crack at it by first defining the terms.

In the economic system of capitalism, the core value is the ownership of property and the ability for the property owner to do what he will with his own property.

 1. In a capitalist system, private individuals can own property and the means of production. These private individuals can decide what to produce, how to produce it, how and where to sell it, what prices to charge, and generally control their own destiny.

Risk taking — and the attendant reward or loss — is an essential part of capitalism.

 2. These private individuals and their means of production act in their own economic self-interest and seek to make a profit whilst engaging in commerce.

 3. These products compete for the attention of consumers in free markets wherein, after setting the nature of the product and the price, the private individual engages with consumers/customers in competion with other similar suppliers.

 4. This competition takes place within free markets in which the demand for and supply of a product and the consumer reaction to the product influence the producer to enhance the capabilities of the product or alter the price.

The invisible hand of the free market holds sway over the entire market and ultimately sets prices.

 5. The market — and its invisible hand — determine success and failure. Failure, like success, is an essential element of capitalism.

 6. There is a limited role for government in determining the ownership of property, products, pricing, and success or failure. There is a legitimate role for government to exercise its Constitutional regulatory and police powers, but it is limited.

Socialism in its purest form is quite different.

 1. Under a socialist economy, the state is the only entity to own property and the means of production. Socialism at its core is all about control of everything.

 2. Since there is no private ownership, there is no individual economic self-interest and no profit to fund innovation and growth. The energy created by entrepreneurship is non-existent.

 3. Socialism does not foster competition and the consumer is left with no choices, long lines, and mandated prices.

 4. Success and failure are mandated by the government.

 5. The government determines who wins and loses.

In the history of the world, there is not a single example of a socialist government that has delivered peace, prosperity, and quality of life to its citizens.

Politics is similar, Big Red Car?

Yes, dear reader.

 1. We have a representative republic wherein we democratically — one man/woman, one vote — elect our local and state representatives and vote directly for electors who determine the office holder of the President and Vice President of the United States.

In our system, if our leaders displease the electorate, they are voted out.

 2. We have a Federal election every four years for the President, Vice President, Senate, and House of Representatives. We have a mid-term election for the House of Representatives every two years.

 3. Whilst we have had allegations of election corruption — count me amongst those who think there has been widespread WIDESPREAD election cheating — but we have contested elections.

In a socialist system, the elections are a sham — if they even have elections. Vladimir Putin prepared the press release announcing his “re-election” two weeks before Election Day.

In our representative republic our representatives make the laws; in a socialist system, the government makes the laws.

How does that apply to today, Big Red Car?

What appears to be happening in America today is the Democrats, the current administration, the left leaning citizenry all appear to be struggling to control the country economically and politically. These efforts are linked.

 1. The left has abandoned the wisdom of markets and consumers to replace them with government mandates that limit choices and mandate outcomes. The government is in the business of picking winners and losers.

 2. Allow me to cite two examples: the Biden War on Energy and the Electric Vehicle Holy Grail. They are linked.

 3. The first day of the Biden admin, the President issued Executive Orders that cancelled major energy infrastructure projects — the deployment of capital in a competitive free market — such as the Keystone XL Pipeline and Alaskan energy exploration.

This propelled the price of gasoline and diesel upward which triggered inflation which exploded interest rates. It really is that bloody simple. 

Before this intervention, the country enjoyed low gas prices, extraordinately low inflation, and the lowest mortgage rates since World War II.

This ham handed, ill-advised government intervention in free markets had a gigantic negative impact on what was a great economy. 

 4. Electric vehicles — vehicles that run on battery driven electric motors rather than internal combustion enginges fueled by gasoline and diesel — are the darling of the American left. [I have no problem with EVs though I think there are some huge unsolved problems such as charging and the cost of battery replacement.]

The Biden admin used tax credits, regulations, and the bully pulpit to flog the EVs to major car manufacturers who all followed the Pied Piper.

The auto manufacturers got on board, announced great plans, built EVs and the market did not embrace them.

The auto manufacturers then sat on their inventories whilst they retreated from their ambitious plans.

The market spoke. The invisible hand delivered the verdict.

  5. So what did the Biden admin do? They raised the auto emission standards for ICE powered vehicles so high they cannot be met thereby forcing consumers back toward electric vehicles. This is going to be a huge problem.

By the by, we also require an electric grid that is 5-6X what we currently have and none of the infrastructure coming to your garage is big enough for your charger and everybody on your block.

 6. Simultaneously, the Biden heavy hand of uncoordinated regulation imposed changes in the regulation of power plants that diminished the current volume of electric generation at a time in which the demands for EVs alone require monumental growth in electric generation.

Immigration, unfettered immigration, a special note

In any discussion of the desire of socialist governments to exert control over everything there is no better example than what is happening at our southern border.

In the face of massive amounts of illegals pouring across our border, a river of fentanyl and other drugs, concerns about military age Chinese illegals, the potential for massive terrorist and gang violence, and a unnecessary burden on the American taxpayer, the Biden admin has simply flaunted the law and continues to allow the country to be invaded by more than 10,000,000 and counting illegals.

This is the ultimate exercise of unlawful control by a political party. It just disregards the law and common sense.

Bottom line it, Big Red Car, we have a squash court

Fine, dear reader. In almost every junction between the government and economic policy today, the current administration exerts a heavy hand — rather than the invisible hand, a very visible heavy hand — to create outcomes that are either not in the interest of the citizens or impose policies that are not conducive to the quality of life and prosperity of the individual.

This control fixation is the heart and soul of socialism whether it is DIE or EVs or energy or student loan forgiveness.

It is particulary obvious today when compared to the prior admin which stripped unnecessary regulation and created a powerful American economy — the best since 1776 — whilst delivering prosperity, peace, low prices, low inflation, and low interest rates.

Would it be unfair to suggest that the next election is really a confrontation between a continuing slide toward socialism and a return to a capitalist, democratic country?

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.