The definitive difference between Capitalism and Socialism is the directional flow of assets. The former is structured to cause a natural flow from the poorer to the wealthier, from the least powerful to the most powerful; the latter reverses the flow’s direction by government regulation.
The laborer is creator of wealth for all, but the incentive to employ that labor is the profit gained from transferability of as much of the laborer’s wealth as possible from the laborer to the employer.
Even the most penurious have redistributable assets – their hands, their strength, their vision, knowledge, experience, judgment, patience. With these they create wealth that is out of their ownership and beyond their control. The tree doesn’t own its apples, or the cow, its milk. Those who gain the wealth produced devote as little as possible of it to sustain its producer. The remainder is arrogated to themselves as upward redistribution.
Conservatives declaring wealth redistribution a liberal anathema refer to redistribution of assets from those who have much to those who have little. The wealth they do not want redistributed is theirs – acquired through redistribution of wealth from those who have little, to themselves. Both Capitalist and Socialist systems are predicated upon wealth redistribution. Every transaction moves assets from one party to another. Every marketing device exists only to effect unequal transfer of assets. “Buy low – sell high” is capital’s path to success. But those with only their lives to sell must sell at a price that maximizes flow of wealth to others and minimizes income to themselves. The least fortunate, existing on the edge of disaster without means to supply even modest needs, are beggared by the slightest employment or health mishap.
It is the function of capitalism to increase wealth concentration by squeezing "efficiency" out of land, labor and capital. Subsidies from public assets to industry, export, or agriculture, or multi-billion dollar armaments no one wants or will use, are welfare for already wealthy capitalists. So are relaxed environmental laws and giveaways to mining, lumbering and ranching interests. But few see such things as Earned Income Tax Credits, Aid For Dependent Children, food stamps, housing supplements, and all the rest as still more subsidies to Capital. What else can one call publicly funded “safety nets” that must supplement wages because employers won't pay enough to enable their workers to even live, support a family, or retire?
The marvelous machine that is capitalism has given the world untold riches by way of entrepreneurial efforts, bold risks, grand schemes – largely based on free human nature within which is a substantial element of greed. Unmanaged greed eventually creates disaster. Socialism caps greed. That is its function. Impeding the upward flow of capital it keeps enough resources in the lives of poorer people to give them the dignity of a decent, healthful, family life and, if they are financially careful, a reasonable retirement.
Intelligent socialism can even save capitalists from themselves. It has done so before.
HEAVY but true.
