Discussing Political Terminology: From Capitalism to Socialism and Beyond

Red
Feb 5, 2024
8 min read

Updated: Oct 1, 2024

Most day-to-day people don’t truly understand politics, and often they have been influenced by the media, so their definition of political terms is wrong. We can see this when we talk about socialism. Most people think that socialism is the same thing as communism or think that socialism is “when the government does things”. In this article, we want to take a step back and simplify these terms and explain to the day-to-day person what exactly these terms mean in comparison to our current life. Even for those who are more knowledgeable in politics, it can also be good to take a step back and reflect on these terms and make sure that we can truly defend what we believe in.

What is Capitalism (Private Capitalism)?

Capitalism [1] is the current globally dominant system. Capitalism has evolved throughout the past so to say that capitalism is one thing is also not correct. However, all forms of Capitalism have several things in common, and in this article, we are going to focus on what is agreed to be its current form – Neo-Liberalism [2]. This is a system where the focus is the capital. It believes that through deregulation [3] of the market, i.e. the free market [4], our economy will stabilize itself. This stabilization will be done through competition if monopolies [5] don’t exist.

Neo-Liberalism believes that the government cannot interfere with this process, since the free market knows best. Neo-Liberalism also believes in trickle-down economics [6]; the idea that if the people at the top of the hierarchy make as much possible capital, the money and the infrastructures created by the capital owners will end up benefiting everyone underneath them, again enforcing the idea of the market knows best, and the government cannot interfere.

Of course, whilst these ideas are all nice and good none of these things truly happen. Deregulation of the market has not only created the so-called free market, but a market where there are almost no rules, so anything goes. It is this deregulation of the market that gives birth to exploitation because no one has any control over the companies. It is also a lie that the market knows best. If that were true, we would be having financial crises every few decades with the latest ones only being 12 years apart. Ironically enough it is through this deregulation that monopolies start existing even though supposedly the market knows best, but it creates the very thing which destroys its almighty competition.

Then of course there is the worst issue of them all. Because of deregulation, trickle-down economics is a total myth. Trickledown economics does not exist in a private capitalist system. After all, there is no law, no one enforcing that the capital owners use their wealth to develop anything because all they do is accumulate wealth. Not to mention that because the government can’t interfere with the market the government themselves can’t enforce that trickledown economics happen. And it is even worse that capitalist governments work at the behest of the capital owners rather than the working class, meaning that a capitalist government will never do anything to fight these issues, because they are financed by the capital owners.

What is State Capitalism?

But before we talk about socialism, we must talk about State Capitalism [7]. This system is defended by people [8] who believe that between Capitalism and Communism, there is not only the need for Socialism as a transitional system but also State Capitalism. State Capitalism is what most people think socialism is because, at the end of the day, it is very simple to simply resume state capitalism to “it is when the government does stuff”.

State capitalism is an economic system in which the state undertakes business and commercial (i.e., for-profit) economic activity, and where the means of production are nationalized as state-owned enterprises. This includes the processes of capital accumulation, centralized management, and wage labor. A state-capitalist country is one where the government controls the economy and essentially acts as a single huge corporation, extracting surplus value from the workforce to invest it in further production. This designation applies regardless of the political aims of the state, even if the state is nominally socialist.

The most known modern example of a State Capitalist country would be China. While the Chinese Communist Party maintains that China is not a capitalist state, in practice, its leaders have long embraced capitalist methods and encouraged entrepreneurship. China's economy is fully integrated into the global capitalist system, and capitalist ideas have penetrated everyday life.

The main issue with state capitalism is that it seems to stagnate. State Capitalism is supposed to be a transitional system, not a final system, and both the USSR and China seemed to stagnate on state capitalism and never transitioned into socialism. This is not good because for example in China, they now welcome private capitalism into their country, meaning that they are betraying the very essence of their system.

Funny enough, most of the critics that people have of Socialism are ones that are caused by State Capitalism rather than Socialism. We’d go as far as to say that many of the critics of state capitalism are the same as capitalism because whether it is done by a worker-led state or private capital owners, capitalism is capitalism.

What is Socialism?

Much like capitalism, Socialism [9] is not just one thing. There are many different forms of Socialism, and since its inception, not everyone agrees on what it is hundred percent. However, once again there is a general understanding of what socialism is. Socialism is a system that puts the social aspect before capital accumulation. Socialism wants the workers to own the means of production, distribution, and its value. This means that within a company there is democracy. The workers are the ones who run the companies.

In contrast to capitalism, where the means of production are owned by private individuals or corporations and where the primary goal is profiting maximization, socialism aims for a more equitable distribution of wealth. In a socialist system, the workers who contribute to the production process have a say in how the company is run and how its profits are used. This is often referred to as "workers' self-management" or "cooperative management".

While capitalism tends to create a division between the capital owners and the workers, socialism seeks to eliminate this division by making every worker an owner. This is not to say that there are no leaders or managers in a socialist system, but rather that these roles are democratically elected and accountable to the workers [10].

Moreover, socialism places a high value on social welfare and public goods. It advocates for universal access to education, healthcare, and other basic services, arguing that these are not privileges, but rights. In contrast, under capitalism, access to these services often depends on one's ability to pay. Socialism believes that no one should profit from these basic services.

Of course, we can’t forget about the fact that under socialism there is no private ownership as we know it under capitalism. This does not mean that people can’t own anything. The things we own like books, clothing, phones, etcetera, are what is known as personal property []. Private property under capitalism in simple terms can be seen as personal property that creates capital. However, as we have established above, under socialism, no company is owned by one person, it is owned collectively by all workers.

What is Communism?

Communism [11], like socialism, is a system that prioritizes the social aspect over capital accumulation. However, it takes the principles of socialism to a more extreme level. While socialism advocates for workers' ownership and control of the means of production within individual companies or industries, communism seeks to eliminate all forms of private ownership and establish a classless, stateless, and moneyless society.

In a communist society, there is no private property, not just in the sense of capital-generating assets, but in the broader sense. All property is communally owned, and each person contributes and receives according to their ability and needs. This is often encapsulated in the phrase "From each according to his ability, to each according to his needs." [12] This means that you work as much as you can, providing as much as you can for yourself and everyone else, and in return, you receive what you need. This principle aims to ensure that everyone’s basic needs are met, regardless of their contribution to production.

Unlike socialism, which allows for some level of individual autonomy and economic disparity, communism aims for complete economic equality. There are no rich or poor in a communist society, and no one has more power or influence than anyone else. This is where we work in the classless, stateless, and moneyless society at work.

While socialism allows for democracy within the workplace, communism extends this democratic principle to all aspects of society. All decisions, whether they relate to the workplace or other aspects of social and economic life, are made collectively. This is often referred to as “direct democracy” or “communal self-management” [13].

In contrast to socialism, where there is still some form of market mechanism and competition, communism seeks to abolish the market entirely. The people make all decisions about what to produce, how to produce it, and who gets what they get, through democratic means. This is often referred to as a "planned economy" or "command economy."

What is Anarchism? (An Extra)

Anarchism [14] isn’t one thing. In its essence, all it means to be anarchist is that you don’t want a hierarchical society. This means that there are different forms of Anarchism. An example of this is Anarcho-Capitalists [15] like the new Argentina president Javier Milei whose political ideas we can only describe as “a total sh*t show”.

In contrast, we have Communist Anarchists [16] who defend that the state must be eliminated because the issue is that we have a hierarchy where are oppressed. Marxists on the other hand equally hate the state, we still see it as necessary for the transition to socialism after a proletarian revolution [17]. At the end of the day, Marxism and Anarchism wants the same goal – Communism. The difference is that Marxists think that we need socialism as a transition from capitalism into communism, and Anarchists want communism straight after abolishing capitalism.

Our self-reflection

In the past, Politdigm may have hesitated to identify as Marxists. However, those who have read our recent article have noticed that we have started to shift our viewpoint. Our aim has always been to advance as an organization, and as we conduct more research, we have gradually evolved. This article is an essential part of our progress.

In the past, we wrote a piece called "The Economic Capitalist Plague," [18] in which we attempted to define various systems. However, we primarily focused on those that have existed rather than those that could emerge in the future. We plan to revisit that article in the future and completely rewrite it. As we grow, we not only want to revisit these old topics and explain them more clearly, but we also feel it is our responsibility to do so.

Conclusion

In our journey to demystify political terms and ideologies, we've traversed through the intricate landscapes of capitalism, state capitalism, socialism, communism, and even anarchism. Through this exploration, we've shed light on the misconceptions surrounding these concepts, providing clarity to those influenced by media narratives and offering a space for introspection to those more versed in political discourse. Our societal frameworks are complex and multifaceted, shaped by historical trajectories and contemporary dynamics.

As we reflect on the definitions and implications of these ideologies, it becomes clear that our understanding of politics must continually evolve. Just as we, at Politdigm, have transformed our perspectives, so too must our collective consciousness adapt and expand. This article marks a pivotal moment in our journey, signaling our commitment to deeper exploration and clearer elucidation of political phenomena.

Explore more with us! Join our Newsletter, support us on Patreon, listen to our Podcast, and discover our other captivating content. Together, let's shape a better future. #Politdigm