October 8, 2008

Economics, Part I

On our way home from NY last summer, our friend Sally brought up an interesting question about gun control (she'd had some odd conversation with a Kansas airline pilot) which led back to a paper I wrote a little while ago for KCW. In my paper, I fumbled around trying to understand the differences between socialism and capitalism (and their connected political systems) and eventually concluded that neither work. But as my professor so helpfully pointed out, I mostly spent time on my own opinions and little on hard facts. I thought it was an opinion paper. Oh well, he still gave me a good grade (thanks prof!).

At any rate, it was an interesting conversation for about an hour. Sal, who comes from Australia (a somewhat socialist-ish country) wondered about the perceived American tendency to uphold our amendment guaranteeing the right to bear arms (aka "you can have a gun and the government can't not let you"). In Australia, the laws are much stricter.

I worry about the tendency for socialist countries to impose ever-stricter laws upon their citizens. The main argument against such laws is that it denies freedoms, but the argument for them is that the law supposedly saves lives. In any case, no matter what guns are or are not on the market, those who wanted them enough could still get them, and then where would we be? You can't eliminate guns with the likes of the many illegal arms dealers perusing the streets (a result of the "innocent until proven guilty" philosophy). Clearly, the system is prone to manipulation. No matter which system you get, you still have those who would prefer just to do as they wish while the law-abiding citizens get screwed over for the n-th time with higher taxes (when do you think you’ll see the results of the latest $700 billion added to the national debt? Anytime soon?).

As an aside, it’s awful convenient for McCain and Obama to talk all about how Wall Street bears responsibility after the fact, but thank you Mrs. Palin, of all people, for pointing out that Americans still bear responsibility to think before they go get a loan they can’t afford … anyway, moving on …

The question between socialism and capitalism comes down to this: which is better, more freedom (thus more individual responsibility) that tends to lead to a lesser degree of justice (since the freedom is often abused), or less freedom (more laws, more enforcement) which supposedly results in fewer deaths and better justice? Which do you choose? Actually, the second option isn't even really an option; more laws doesn't actually result in better justice, they only provide more hoops to jump through for those that are law-abiding and thus aids the criminals who circumvent such hoops. Even if they were, the system can still be abused. That said, the question still stands: do you take freedom of choice, or a forced morality?

Socialist states tend towards an escalation of laws. Look towards the best-known socialist states such as China, Australia, and many south-American countries. Of the total, only one has a decently low rate of material poverty (Australia, which, incidentally, also has a capitalist flavor to its socialized economy), and the rest are hell-holes. The socialist experiment, practically speaking, seems to end in a dictatorship for one simple reason: who chooses the laws? Who unilaterally decides what is “good” or “lawful” and what is “bad” or “unlawful”? Will there ever be universal agreement on that?


My professor remarked that a perfect, God-centered society would look more socialist than capitalist, but I disagree. I think that God's Economy is a fusion of the two, with the freedom to choose of capitalism and the mercy and justice of the socialist ideal. If God's the one making the laws (which are really more like principles because you're not forced to follow them, only to reap the consequences of your actions), then the laws will be just; only a perfect being could do that. Unfortunately, God's not the one governing China or Sudan or Venezuela - therein lays the province of men, and the men in charge don't seem to be doing much good for their people as God has charged them to do. God is the only one un-biased enough (another word with which I take issue, maybe I’ll write about it later) to create truly perfect laws.

And I abhor the word "fair" - the rain falls on the just AND the unjust.

Now, I see where he's coming from, and agree, to a modest extent. Capitalism too is problematic because it supposedly relies on greed to fuel its growth. Capitalism works by refusing to give people what they want or need, and making them work for themselves. In such a society, the best way to get ahead is to hoard what you manage to scrounge to yourself instead of sharing - the more you keep for yourself, the less the others have to compete with you. By the way, in my studies of anthropology, I've noticed that it's only in tribal societies that communal socialism works because a) it's a small group, b) to survive, the tribe HAS to work together, and c) the tribe ends up competing (i.e. capitalism) with other tribes. It’s like a fusion of the two. Anyway, the trouble is that capitalist values have evolved beyond mere survival; when capitalist societies become sufficiently advanced through their hard work (having generated the best ideas using a social form of Darwinian evolution), they suddenly discover they have leisure time, or a surplus of resources with which to trade. The values slowly shift away from the necessities and towards the luxuries; necessities are forgotten, the luxuries gradually become the necessities. And it is this competition that socialists tend to critique; competition inevitably leaves some behind, and nobody has incentive to take care of them, for they would simply get in the way of advancement. Survival of the fittest, and all that.

But the funny thing is, in the end, one look at the practical outcome of capitalism and one begins to see that it is essentially the same as of socialism. On the one hand, a society that kills off people to supposedly better others, and on the other, a society that kills of some to supposedly save others.

It's a conundrum - both have advantages, but both have overwhelming disadvantages as well.

(to be continued …)


Jeff Rudy said...

Chris, I greatly look forward to where this is going!!!

Particularly interesting is the insight of communal socialism only working in tribal societies. This may quite be why the beginning stages of the church in Acts looks like some of the ideals of socialism. But you've put your finger on the conundrum.

The most important part of why these (as all earthly governmental structures) are doomed to fail is our participation in the sin of our original parents. I find it peculiar how the original sin was one of consumption (consumerism, if you will, which is the inevitable outcome of capitalism in a fallen world).

Dan said...

the important distinction I see in scripture is that it never preaches socialism OR capitalism for governments. It preaches love, caring, and sharing (which leans towards socialism - supposedly) on personal levels and in the body of Christ. However, the writers in the Bible never assumed that there would be a Christian government. It seems that capitalism on a governmental level best brings improvement, provision for all, and the drive to actually work for your part of it.
While my thoughts are scattered, it comes down to this: governmental capitalism and personal socialism seems to be an integration that would be best.

Chris said...

I think a discussion on freedom might be in order in this particular series because many of the socialists I've talked to basically say that we have to force a society to behave properly because they won't choose to do so. But I don't see the Kingdom of Heaven described like that in scripture ...

Anonymous said...

The cases where socialism is necessary is for the protection of public goods like clean air and water. With laisez-faire capitalism what incentive does the upstream user have to protect the water for downstream users? What incentive does the coal company have to clean its emissions? For-profit health care companies have no incentive to provide coverage to everyone. They are beholden only to shareholders. This is how we end up with health care system that costs 3x what the europeans pay and 47 million uninsured.
A. Annie

Dan said...

couple more thoughts after reading "A. Annie's" comments... which are valid concerns with capitalism and sometimes are not taken care of.
However, with capitalism, responsibility is sometimes in the hands of the consumer to choose those companies that are treating the environment right or their customers right. However part of the problem here is that there are so many companies and it takes a lot of work on the part of me, the consumer, to do this...
Also, there must be some regulations governing companies for capitalism (i don't think anyone would want a completely "free market") or one company could corner a product and make prices whatever they want. The regulations that are needed are those that protect the customer while giving the most freedom possible.

Health care... I have nothing to say on that as I am ill-informed and admit it.

And, I'd like to hear more of your thoughts on freedom Chris.