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Capitalism and Socialism – is a synthesis possible?

"The Wealth of the Nation" by Seymour Fogel.
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Written by Pertti Koskela

Humanity can only survive if it builds its future on the lessons from its history. – There is something to be learned from all the long-lasting and widespread models of society in the prehistory and history of humanity. – This is also the case with social systems that are considered opposites, such as socialism and capitalism.

“Capitalism” and the inviolability of private property rights

There are many forms of “capitalism” and both its proponents and opponents can use the word to refer to many different things. Thus, the quotation marks. We believe that modern capitalism is a democratic market economy bent on imperialism. “Capitalism” with an ability to renew itself has always been characterised by private property, protected and controlled by democratically enacted laws.

The inviolability of private property rights is a general, philosophical principle. It is not possible to apply it as such in practice.

According to Hegel, private property rights are a prerequisite for human freedom. The view is correct, with a reservation by Hegel himself: ”But the specific characteristics pertaining to private property may have to be subordinated to a higher sphere of right (e.g. to a society or the state) – –“

This Hegelian view is enshrined in the German Constitution, Article 14(1) which guarantees the right property and inheritance and states in paragraph 2: ”Property entails obligations. Its use shall also serve the public good.”

This contains the view that property and the use of it bring social influence.

The influence granted by ownership serves the “public good”, for example where it contributes to the strengthening of the rule of law, to the economic growth while reducing the burden on the climate, as well as to the general prosperity and the distribution of ownership to an ever-wider strata of society.

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"The Security of the People" by Seymour Fogel.
"The Security of the People" by Seymour Fogel. The Voice of America headquarters in Washington D.C. houses several unique American art treasures from the New Deal era. PHOTO: Wikimedia Commons.

This is largely what has happened in many Western democracies. For example, the rule-based nature of national and international business and commerce has increased in the recent decades, the standard of living has generally risen, and civil liberties have increased.

But the development to the opposite direction has also intensified. As a result of the information technology revolution and globalisation, the influence of speculative financial capital and large corporations, which have become detached from their national roots, has increased. It has led to a concentration of ownership: income and wealth disparities have widened sharply – even to the detriment of economic growth and the stability of societies, as the OECD has repeatedly warned.

Speculative financial capital and large companies are unlikely to consider the “public good” in terms of combating climate change – when it threatens maximal profits, in any case.

An idea is always a generalization, and generalization is a property of thinking. To generalize means to think.

When an ever-smaller minority receives an increasing share of the rising incomes and the wealth of the world, its influence hampers the vast majority’s ability to acquire and secure private property. Example: after the financial crisis of 2008, the U.S. banks that caused the crisis were bailed out, but not the citizens who lost their homes to the banks as a result of the crisis.

Experience shows that people are inclined to use their property against the public good rather than as an obligation to serve it.

The Program of the New History Association as a printed booklet and an e-book. It contains Part 1, 2 3 on these pages, as well as a presentation of Matti Puolakka’s lifework and of the Association.

If you think our views are important, even only as questions, buying the Program pamphlet is one possible way to support our work. (The cover image is linked to Amazon.)

The socialist principle of distribution and absolute selflessness

Socialist countries chose a road opposite to the market economy. After the revolution, private ownership of production facilities was abolished. Socialism in the Marxian sense, that is, as a “working-class power”, was, however, deficient also while at its best. It was marked by increasing corruption and bureaucracy. The lack of independent judiciary allowed arbitrary purges. The Chinese Cultural Revolution was supposed to be a grassroots rebellion against the bureaucratic bourgeoisie that led the ruling party, but it led to disaster.

Te most important “ability” of a person was considered to be “selflessness”, “serving the people”. Under socialism it led to self-deception and hypocrisy.

The socialist principle of distribution “from each according to abilities, to each according to needs” as a philosophical banner reflects the pursuit of justice. But it does show the shortcomings and mistakes of Marxism, which at a practical level led to the dead end and collapse of socialism.

One mistake made by Marxism regarding the socialist principle of distribution is that “labour” is narrowly understood to be mainly routine manufacturing work. The so-called creative work is not included. People can immerse themselves in creative work with their whole essence, unlike with routine labour. Applied to creative work, the “from each according to abilities” banner is just a phrase: let everyone be “according to abilities” and settle with it. Going beyond one’s abilities and the limits that are set on them is always of a part of creativity, whether the limits are imposed by the creator him/herself or the surrounding community/society.

Edward Munch: Workers Returning Home 1920.
Edward Munch: Workers Returning Home 1920. PHOTO: Wikimedia Commons.

It is precisely the creative work that is most beneficial to society. The socialist principle of distribution does not explain the benefits to society of significant scientific inventions or artistic achievements. What would be the value to society of, for example, Marx’s Capital, Sibelius’s symphonies or van Gogh’s paintings? How much wages should have been paid on them?

The socialist principle of distribution also ignores the problem that it is not always easy to equate material rewards with the benefits of social status. – Once the basic needs are met, the material standard of living does not mean much to a person unless s/he also receives social prestige and influence as a consequence.

A more serious mistake made with the socialist principle of distribution is that activity to make the society fairer, civic courage against corruption and bureaucracy, is not regarded as “labour”, nor as a basis for wages, in the same way as participation in material production or administrative work.

Most fatal is that the most important “ability” of a person is considered to be “selflessness”, “serving the people”. Among the oppressed people in underdeveloped countries, under conditions of hunger, physical oppression and imperialist exploitation, the notion of moral “selflessness” was understandable. Under socialism it led to self-deception and hypocrisy. – Besides, it is impossible to combine this “ability” with the socialist principle of distribution. If “selfless work” is rewarded materially, it is actually not absolute “selflessness”. The human ideal of socialism is at odds with its principle of distribution.

But by the middle of the last century, one third of humankind was building their societies in the name of the socialist principle of distribution. Despite its faults, the principle reflected the quest for justice. It drew subordinate strata of society in the West in favour of socialism and forced the Western countries to develop in a fairer direction: when the socialist countries were at their strongest, the Western countries enjoyed the so-called Golden Age of Capitalism.

Synthesis: wages for the love of truth

What would be the synthesis of the capitalist emphasis on the protection of private property and the socialist principle of distribution? How should humanity learn from them for the future?

With the IT revolution, know-how has become the most important productive force. Programming skills, business ideas, the skill to gain followers for a video blog, the ability to network – all of them are know-how, a means of production in the Marxian sense that allows the owner to make money.

A person’s most important “know-how”, the most important human attribute, is not “selflessness” but a sense of justice, a judge’s ethics. It is the ability to objectively assess – regardless of one’s own interests – serious conflicts of interest. The more society relies on it, the more viable it is. – How to use a person’s most important ability as a “means of production”?

What would be the value to society of, for example, Marx's Capital, Sibelius’s symphonies or van Gogh's paintings? How much wages should have been paid on them?

Social injustice always hides behind outdated “truths”, official lies, collective self-deception, because within individual and group behaviour, humans are not inclined to seek the objective truth (even if they are capable of it in principle).

Social justice begins with the sense of justice, the search for truth in the social debate. It always means tackling topics that in one’s own country, one’s own culture, one’s own field, etc. are obviously things that should be talked about, but that people keep to themselves for the sake of own interests. – The truth-seeker is always the child of the fairy-tale who alone shouts in the crowd: “The emperor has no clothes!”

The search for truth is always about deliberately exposing oneself to discrimination, harassment and persecution by fellow human beings, especially by the socially privileged and their followers.

How to guarantee the “right to property” for sense of justice, the most important know-how of humans? – Our answer: by applying the principle that wages must be paid on the basis of – and ultimately above all – the love of truth, sense of justice and capacity for solidarity. – It will of course take decades before the principle will be universally applied.

The above compensation principle promotes the realisation of the most important human right – freedom of opinion. It makes it possible for an individual to earn with his/her most valuable private property, with his/her humanely most valuable personality trait. In that way, public and private interests will be combined in a best possible way.

Humanity is at risk of self-destruction. Climate change is the most obvious example of this. And political polarisation – and the fake news, hate speech and slander that feed it – is the clearest indication of humanity’s tendency towards self-destruction. Humanity can only survive by joining together to study the lessons of its history and to summarise it, to synthesise it, through discussion. How to discuss the lessons of human history in a civilised, constructive way? How to create a great new synthesis?

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"The Wealth of the Nation" by Seymour Fogel.

“The Wealth of the Nation”. The Voice of America headquarters in Washington D.C. houses several unique American art treasures from the New Deal era. This painting is by Seymour Fogel. PHOTO: Wikimedia Commons.

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