Clarifying Economic (& Theological) Terms in the Capitalism-Socialism Debate

Readings for 25th Sunday in Ordinary Time: AM 8: 4-7; PS 113: 1-2, 4-6, 7-8; 1TM 2: 1-8; 2 COR 8:9;LK 16: 1-13

Last weekend, comedian, Bill Maher, and film-maker, Michael Moore, got into a shouting match on Maher’s show “Real Time.” Their point of contention was capitalism vs. socialism. Moore argued for socialism; Maher was against it. Their boisterousness reminded me of dinner-table arguments which (I’m ashamed to admit) I’ve been part of myself.

I bring all this up because the debate is intimately related to this morning’s liturgy of the word. Though the readings obviously pre-date the emergence of the modern system, they all criticize what has historically become “the spirit of capitalism.”  

In any case, the Maher-Moore debate is worth considering not only because it manifests the relevance of the Jesus tradition to arguments like theirs. The argument also demonstrates the counter-productivity of the squabble itself. It’s counter-productive because its terms fall into a trap congenial to the enemies of the biblical tradition. The trap frames alternatives to our present economic system in terms of “socialism” instead of in terms of social justice, mixed economy, and “preferential option for the poor.”

That’s a simple distinction I never tire of making, because (as I point out in my book, The Magic Glasses of Critical Thinking: seeing through alternative fact and fake news) it’s absolutely key to the discussions of capitalism and socialism that will inevitably characterize the election season we’ve just entered – especially following the eventual selection of any Democratic candidate. No matter who the candidate turns out to be, s/he will be predictably vilified for advocating socialism pure and simple – an economic system that simply does not exist.

Maher and Moore both missed that point. The rest of us shouldn’t. In fact, I recommend avoidance of capitalism-socialism framing altogether. I’ll explain what I mean, and then elucidate the connections with today’s readings.

To begin with, Moore’s mistake was to represent as “socialism” his advocacy of Medicare for all (Maher was against it), free college tuition, college loan-forgiveness, and the Green New Deal. In reality, those programs notwithstanding, each of them represents elements of mixed economies – the only form of economic organization that exists in our present context. And a mixed economy always has three elements (1) Some private and some public ownership of the means of production, (2) Some controlled markets and some that are free of control, and (3) earnings limited (usually by progressive income taxes).

Every economy in the world has those elements. There are no exceptions.

Mixed economies contrast with the three elements of capitalism as well as with those of socialism. Capitalism’s three points are (1) Private ownership of the means of production, (2) Free and open markets, and (3) Unlimited earnings. None of the world’s economies embodies those elements untempered by planning.

Meanwhile, socialism’s three points are (1) Public ownership of the means of production, (2) Controlled markets, and (3) Limited earnings. Like untempered capitalism, such economic arrangement exists nowhere (including in “communist” China or Cuba).     

For his part, Maher’s defense of capitalism was also a defense of mixed economy. He agreed with many of Moore’s points. So, Maher’s “capitalism” was no less mixed than Moore’s. The difference was that Maher wanted more market and less planning in economic policy.

This is not to say that all mixed economies are equal. (And this point is essential to keep in mind). The crucial question with them is “Mixed in favor of whom?” Those who mistakenly identify themselves as “capitalists” tend to advocate economies mixed in favor of the rich. They do so on the belief that wealth trickles down; a rising tide lifts all boats, etc.

Those who (equally mistakenly) identify as “socialists” want economies mixed more in favor of the working and unemployed classes. They recognize that unregulated markets respond primarily to those with the most money. Economies therefore have to be controlled to include those with limited (or no) resources.

With all of this in mind, Moore and Maher might have resolved their argument by recognizing that the choice before them is not between capitalism or socialism, but between an economy mixed in favor of the rich or one mixed in favor of the poor. And the formula for doing so might be: As much market as possible, with as much regulation as necessary (to assure a decent standard of living for everyone on the planet).   

Now, a formula like that not only avoids “the socialist trap;” it is also highly compatible with the biblical social justice tradition that’s expressed so clearly in this morning’s liturgy of the word. As I’ve translated them below, today’s selections point out the injustices inherent not only in the economies of the ancient world, but in today’s neoliberal order. Both, the readings imply, were and are rigged in favor of the rich and against the poor.  Check the readings for yourself here.

This is the way I interpret them:

 AM 8: 4-7

Money makes the rich
Exploit the poor.
It leads the wealthy
To distort religion
Manipulate currency
Put thumbs on scales
Sell shoddy products
And underpay workers.
But never doubt:
They will one day reap
Due karma.
 
PS 113: 1-2, 4-6, 7-8
 
For God will lift up
The poor
From the dirt
And “shitholes
They’re forced
To live in.
Thank God:
The lowly
Will one day
Become their own
Masters instead.
 
1 TM 2: 1-8
 
In the meantime,
Pray that the powerful
Might change their ways
For God cares
Even for them.
Pray that they
Might know God
As revealed in
The poor man
Jesus who died
For them too
Despite their bitterness
Lies and self-serving
Talking points.
 
2 COR 8:9
 
Yes, don’t forget:
God chose
Self-revelation
In the poor
Not in the rich.
Ironically,
God’s Preferential Option
For the Poor
Is the only way
To prosperity.
 
LK 16: 1-13
 
In fact,
The poor man, Jesus,
Laughed at the rich
Who can’t use a shovel
To save their lives,
But blame the beggars
Their own policies have created.
The rich are so crooked,
He joked,
That they even admire
Shrewdness in those
Who end up stealing from them!
Their own small larcenies
Grow exponentially.
So they cannot be trusted.
Restitution is therefore in order.
But don't worry
About the bankers:
Their “generous” loans
Can easily be written off
Without in the least
Impacting their
Decadent life-styles.
Their basic mistake
Is believing that
Differentiating wealth and God
Are somehow compatible.
They are not!

Don’t you agree that sentiments like those favor economies mixed in favor of the poor? (That’s the way they appear to me.) The readings imply that if mixed economies are all we have, we shouldn’t allow ourselves to fall into the trap that ensnared Moore and Maher. Instead of arguing about non-existent “capitalism” or “socialism,” we should make sure to embrace the principle “As much market as possible, but as much planning as necessary (to insure a dignified life for all).”

But to avoid pointless shouting matches, it will be necessary to carry around in our minds those clear and easily understood ideas about what capitalism and socialism are. To repeat: capitalism’s essential elements are (1) private ownership of the means of production; (2) free and open markets, and (3) unlimited earnings. Socialism’s defining points are just the opposite: (1) public ownership of the means of production; (2) controlled markets, and (3) limited earnings. Once again, those two definitions make it clear that mixed economies are all we have. 

Finally, we should be emphasizing the incompatibility between  the Judeo-Christian tradition and the spirit of capitalism as characterized in today’s readings. Excessive wealth on the one hand and God on the other are not compatible. Or, as Jesus put it, “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.”

Despite our culture’s claims to the contrary, that’s the faith we “People of The Book” (Jews, Muslims, and Christians) are called to embrace.

The Missing Faith Dimension of the Capitalism vs. Socialism Debate

Jesus Communist

Democracy Now recently reported surprising results from a new Gallup poll about evolving attitudes in this country about socialism. The poll concluded that by a 57-47% majority, U.S. Democrats currently view socialism more positively than capitalism.

Let me offer some reflections sparked by those poll results. I offer them in the light of some pushback I received over my related blog posting about the capitalism vs. socialism debate. These current reflections will emphasize the faith perspective that has not only shaped my own world vision, but that should mobilize Christians to be more sympathetic to socialist ideals.

To begin with, the Gallup poll results are themselves astounding in view of the fact that since after World War II all of us have been subjected to non-stop vilification of socialism. As economist and historian, Richard Wolff, continually observes Americans’ overcoming such programming is nothing less than breath-taking. It means that something new is afoot in our culture.

On the other hand, the Gallup results should not be that shocking. That’s because since 2016, we’ve become used to an avowed socialist, Senator Bernie Sanders of Vermont, being the most popular politician in the country.

On top of that the recent 14-point victory of another socialist, Alexandria Ocasio Cortez, grabbed everyone’s attention. Recall that Ms. Cortez defeated 10-term congressional incumbent, Joe Crowley, in her NYC race for the Bronx and Queens seat in the House of Representatives.

Socialist candidates seem to be sprouting up everywhere. They advocate a $15 an hour minimum wage, Medicare for all, and tuition free college education.

Such promises seem to be somehow awakening Americans (at least subconsciously) to the reality that at least since WWII, similar socialist programs have become quite familiar. We’ve all experienced their efficacy since Roosevelt’s New Deal. We expect the government to intervene in the market to make our lives better.

In fact, since the second Great War, there have been no real capitalist or socialist economies anywhere in the world. Instead, all we’ve experienced are mixed economies with huge elements of socialism that we’ve all taken for granted.

Put otherwise, economies across the globe (however they’ve identified themselves) have all combined the three elements of capitalism: (1) private ownership of the means of production, (2) free and open markets, and (3) unlimited earnings, with the corresponding and opposite elements of socialism: (1) public ownership of the means of production, (2) controlled markets, and (3) limited earnings. The result has been what economists everywhere call “mixed economies”: (1) some private ownership and some public ownership of the means of production (exemplified in the post office and national parks), (2) some free markets and some controlled markets (e.g. laws governing alcohol, tobacco and fire arms), and (3) earnings typically limited by progressive income taxes.

What has distinguished e.g. the mixed economy of the United States from the mixed economy, e.g. in Cuba is that the former is mixed in favor of the rich (on some version of trickle-down theory), while the latter is mixed in favor of the poor to ensure that the latter have direct and immediate access to food, housing, education and healthcare.

My article also went on to argue that the socialist elements just mentioned have enjoyed huge successes in the mixed economies across the globe – yes, even in Russia, China and the United States.

“All of that may be true,” one of my readers asked “but how can you ignore the tremendous human rights abuses that have accompanied the “accomplishments” you enumerate in Russia and China? And why do you so consistently admire socialism over capitalism which has proven so successful here at home?”

Let me answer that second question first. Afterwards, I’ll try to clarify an important point made in my recent posting’s argument about the successes I alleged in Russia and China. That point was in no way to defend the horrendous human rights abuses there any more than those associated with the successes of the U.S. economy which are similarly horrific. But we’ll get to that shortly.

In the meantime, let me lead off with a that basic point about faith that I want to centralize here. Here my admission is that more than anything, I’m coming from a believer’s perspective.

That is, without trying to persuade anyone of its truth, I admit that my Judeo-Christian faith dictates that the earth belongs to everyone. So, boundaries and borders are fictions – not part of the divine order. Moreover, for some to consume obscenely while others have little or nothing is an abomination in the eyes of God. (See Jesus’ parable about the rich man and Lazarus (LK 16:19-31).

Even more to the point of the discussion at hand, it is evident that the idea of communism (or communalism) comes from the Bible itself. I’m thinking of two descriptions of life in the early Christian community that we find in the Acts of the Apostles. For instance,

Acts 2:44-45 says:

“All who believed were together and had all things in common; they would sell their possessions and goods and distribute the proceeds to all, as any had need.”

Acts 4:32–35 reads:

“All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had . . . And God’s grace was so powerfully at work in them all that there were no needy persons among them. For from time to time those who owned land or houses sold them, brought the money from the sales and put it at the apostles’ feet, and it was distributed to anyone who had need.”

Jesus’ identification with the poor and oppressed is also important for me. He said that whatever we do to the hungry, sick, ill-clad, thirsty, homeless, and imprisoned, we do to him. The words Matthew attributes to Jesus (in the only biblical description we have of the last judgment) are:

“The King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.’ “Then he will say to those on his left, ‘Depart from me, you who are cursed, into the eternal fire prepared for the devil and his angels. For I was hungry, and you gave me nothing to eat, I was thirsty and you gave me nothing to drink, I was a stranger and you did not invite me in, I needed clothes and you did not clothe me, I was sick and in prison and you did not look after me.’ “They also will answer, ‘Lord, when did we see you hungry or thirsty or a stranger or needing clothes or sick or in prison, and did not help you?’ “He will reply, ‘Truly I tell you, whatever you did not do for one of the least of these, you did not do for me.’
There is much, much more to be said about this basic faith perspective. But for now, let that suffice.

Now for the second point about human rights:

• To repeat: no one can defend the obvious human rights abuses of Russia or China. They are clearly indefensible.
• In fact, they are as inexcusable as the similar abuses by the United States in countries which are or have been U.S. client states. I’m referring to Israel, Iraq, Afghanistan, Yemen, Vietnam, and countries throughout Latin America and Africa. In all the latter, it has not been unusual for freedom of press to be violated, for elections to be rigged (think Honduras just recently), for summary executions to be common, for journalists to be assassinated in large numbers, and for dissenters to be routinely imprisoned and tortured. Christians advocating social justice have been persecuted without mercy. (Recall that infamous Salvadoran right-wing slogan, “Be a patriot; kill a priest.”)
• Moreover, while we have been relatively free from such outrages on U.S. soil, the events of 9/11/01 have been used to justify restrictions of freedoms we have historically enjoyed. Here the reference is to wiretappings, e-mail confiscations, neighbors spying on neighbors, and other unconstitutional invasions of privacy that seem to violate the 4th Amendment of the Constitution. It is now even permissible for the nation’s head of state to identify the press as “the enemy of the people.”
• 9/11 has also been used to justify the clearly illegal invasion of at least one sovereign country under false pretenses (Iraq) with the resultant deaths of well over a million people (mostly civilians). Other countries have also been illegally attacked, e.g. Libya, Yemen and Somalia without due congressional authorization. 9/11 has further “justified” the establishment of “black sites” throughout the world, the “rendition” of prisoners to third countries for purposes of torture, innumerable (literally) arrests without charges and imprisonments without trial. It has even led to extrajudicial killings of U.S. citizens.

Such observations make the general point that when countries perceive themselves to be under attack, they implement policies both domestically and abroad that defenders of human rights correctly identify as repressive, cruel, criminal and even homicidal. Russia, China, and Cuba have been guilty of such policies. But so has the United States in supporting friendly regimes throughout the world and by implementing increasingly repressive policies here at home.

Now consider the pressures that led Russia, for example, to implement its own indefensible repression:

• As the most backward country in Europe, its people had suffered enormously under an extremely repressive Czarist regime. [Czarism, in fact, was the model of government that most Russians (including criminals like Stalin) had internalized.]
• Following its revolution, Russia was invaded by a vast coalition of forces (including the United States). It was forced to fight not only the invaders, but Czarist sympathizers and anti-communists within its own population.
• The country had twice been invaded by Germany through Poland and saw itself as needing a buffer from its implacable enemies to the west.
• Its people had fought heroically against German invaders and though suffering 20 million deaths and incredible infrastructure destruction, it managed to defeat the German army and largely be responsible for winning World War II.
• During the Cold War, Russia found itself under constant threat from western powers and especially from the United States, its CIA, and from NATO – as well as from internal enemies allied with the latter.

My only point in making such observations was not to defend Russia’s indefensible violations of human rights (nor China’s, nor Cuba’s); it was, rather, to make my central point about the efficiency of economies mixed in favor of the poor vs. those mixed in favor of the rich.

As shown by Russia (and even more evidently by China), economies mixed in favor of the poor develop much more quickly and efficiently than economies mixed in favor of the rich. While both Russia and China became superpowers in a very short time, the former European and U.S. colonies in Latin America, Africa, and South Asia have remained mired in colonial underdevelopment. The latter’s organizing principle of “comparative advantage” has proven ineffective in enriching them, since it locks them into positions of mere suppliers of raw materials to industrialized countries. No country has ever reached “developed” status by following such principle. In other words, Global South countries are still waiting for that wealth to “trickle down.”

So, readers shouldn’t mistake the argument made by Wolff and others. It was not to defend the indefensible. (Even Khrushchev and Gorbachev recognized and denounced the crimes of Josef Stalin.) The relevant point is about capitalism vs. socialism. It was to indicate that the vilification of socialism overlooks the achievements of that system despite (not because of) restrictions on human rights that are common to both systems in egregious ways that no humanist or follower of Jesus should be able to countenance.

My conclusion remains, then, that it is up to people of conscience (and especially people of faith) to oppose such restrictions and violations wherever we encounter them – but especially in our own system where our voices can be much more powerful than denunciations of the crimes attributable to “those others.”