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Capitalism versus Socialism

Inefficient Capitalism and Socialism

Capitalism versus Socialism, Capitalism 72%

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Political economy – that is, the way that human societies organize and direct their economic activities – has been defined by a choice between two unpromising alternatives. Calling them simply “capitalism” and “socialism,” popular as this habit is, misstates the matter, because they were much more specific than that.

The first might better be called corporate capitalism, as it recycled older forms of capitalism in the service of the weird social fiction of the corporation, a “legal person” that has more rights and fewer responsibilities than the rest of us, and serves today’s well-to-do in roughly the same role that the image of Oz the Great and Powerful did for the little man behind the curtain. The second might with equal justice be called bureaucratic socialism, as it translated the grand promises and stirring rhetoric of generations of radicals into dour totalitarian states that guaranteed every citizen an equal share of deprivation and repression.

In retrospect, it might seem obvious that there are many other ways to run a free market economy than relying on an arrangement that Adam Smith himself considered the worst possible way to run a business. (I wonder how many of today’s cheerleaders for corporatist capitalism have read Smith’s scathing comments about joint-stock companies, the proto-corporations of his own time.) It might seem equally obvious that there are plenty of ways to manage an economy of collective ownership that do not require vast sclerotic bureaucracies governed by dogmatic ideologies.

At this stage of the game, with petroleum production already sliding and so many opportunities gone by the boards, that seems hopelessly unlikely. Still, the adoption of some less wildly inefficient and failure-prone approach to political economy would be a very sensible move as we begin to deal with the challenges of the long era of contraction and readjustment that is taking shape around us right now. Utopian schemes remain as useless as they have ever been, but efforts at thoughtful, constructive, and realistic change are quite a. other matter, and in the wake of corporate capitalism’s latest round of failure, there might just be an opportunity to accomplish a bit of the latter.

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