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THE DISPARITY BETWEEN CAPITALISM AND SOCIALISM

Posted by Tim Bryce on November 28, 2012

BRYCE ON POLITICS

– Do young people know the difference between the two?

(Click for AUDIO VERSION)
To use this segment in a Radio broadcast or Podcast, send TIM a request.

I was recently invited to give a talk at a business conference designed to help high school seniors in our county who have an interest in pursuing a business career. Specifically, I was assigned two sessions to describe what the young person should expect as they make the transition into adult life which was based in large part on my book, “MORPHING INTO THE REAL WORLD – A Handbook for Entering the Work Force.”

I wore a suit and tie for the occasion to express my credibility and out of respect for my audience, even though none were older than eighteen years of age. This was going to be an unusual talk for me as I normally address adults, not youth. Because of this, I wanted to know a little about my audience. So, using a show of hands, I inquired where the students were from, such as their high schools, but I also flippantly asked how many were capitalists and, conversely, if there were any socialists present. I received a lot of blank stares on both accounts. This caused me to deviate from my planned program and deliver a mini-dissertation describing the differences. I contended in order to be successful in business, the students would be wise to know what each meant.

Interestingly, some were brainwashed into believing capitalism was evil and simply represented another form of greed. I contend greed is a human emotion, and can be equally applied under either system. Therefore, capitalism is not greed, it is a celebration of the individual’s right to try and succeed. Whereas capitalism focuses on the rights of the individual, socialism concentrates on the rights of the group overall.

I explained, under capitalism the individual has the right to try his/her hand at anything they are so inclined, thereby representing freedom. They simply have the right to try, nothing more, nothing less. If they are lucky, they may succeed, but they also run the risk of failure. Failure is an inherent and important part of the system. There are no guarantees for success. This is why risk is important, to force the individual to work harder and smarter to avoid defeat. As such, capitalism encourages entrepreneurship (innovation and invention). If the person is successful, they are entitled to enjoy the fruits of their labor. If they are not, they must suffer defeat. This should force the person to redouble his/her efforts and try again which, of course, is evolution in action.

To encourage entrepreneurship, our founding fathers took steps to safeguard the intellectual property of the individual. This specifically includes Article 1, Section 8 of the United States Constitution, wherein the powers of Congress are defined. It states, in part, “The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”. This led to such institutions as the Patent and Copyright offices which were specifically designed to safeguard an individual’s intellectual property. As early as 1790, the first patent and copyright were approved. At the time, safeguarding intellectual property in this manner was rare to the rest of the world. By promoting the entrepreneurial rights of the individual, our forefathers were embracing capitalism.

As mentioned, the focus in Socialism in on the group, not the individual. Here, the rights of the many take precedence over the individual. Because of this, personal initiative is discouraged and the individual cannot endeavor to do better than the next person, and failure is prohibited; the group will always bail you out. There is no notion of assuming risk and being held personally accountable for your actions. All compensation is equitable among workers with no rewards for outstanding achievement or penalties for inferior workmanship. Intellectual property belongs to the group, not the individual. Consequently, this approach discourages entrepreneurship and tends to promote apathy.

The Achilles’ heel of Socialism is the belief that everyone is equal and, as such, should be treated and compensated on an equitable basis. On the surface, this sounds like a fair and noble notion. The assumption though is that everyone works at the same level of effort and expertise which, of course, is simply not so. Restraining the individual from achieving higher levels of workmanship or striving for higher goals is unnatural and discourages the worker.

To summarize:

CAPITALISM SOCIALISM
FOCUS The rights of the individual; the right to “try”; requires freedom. The rights of the group; collective decision making; regulations restrain the individual.
ENTREPRENEURSHIP Yes, encourages risk; enjoys fruits of labor; individual assumes personal responsibility; promotes evolution. No, discourages risk; individual cannot fail; encourages apathy, discourages change; unnatural.
INTELLECTUAL PROPERTY Yes, belongs to the individual. No, property belongs to the group.

 

Before closing, I encouraged the students to become familiar with the works of author Ayn Rand, particularly “The Fountainhead” (1943) and “Atlas Shrugged” (1957). Rand’s work touted the need for individual achievement and capitalism, and saw them as two intertwined concepts.

In business, we have to be mindful of encouraging individual achievement and teamwork equally. We realize our team is as good as its weakest player, hence the need to encourage workers to strive harder for perfection. However, there will always be those people who will rise above others and it certainly wouldn’t make sense to impede their growth.

“But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made–before it can be looted or mooched–made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.” – Ayn Rand

Keep the Faith!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is a writer and the Managing Director of M&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

For Tim’s columns, see:
timbryce.com

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Copyright © 2012 by Tim Bryce. All rights reserved.

 

NEXT UP:  THE INNER BEAUTY OF WOMEN – Which can be more alluring than just physical beauty.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mondays, Wednesdays, Fridays, (12:30-3:00pm).

Also look for Tim’s postings in the Palm Harbor Patch, The Gentlemen’s Association, and throughout the Internet.

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8 Responses to “THE DISPARITY BETWEEN CAPITALISM AND SOCIALISM”

  1. Tim Bryce said

    An N.S. of Naples, Florida wrote…

    “Failure under socialism is not always bailed out. If it is financial, even in honest error, results in jail time. I know for a fact, I have seen it. We already have socialism in this country to a higher degree than I would like.”

    Like

  2. Tim Bryce said

    A J.S. of Tampa, Florida wrote…

    “Ayn Rand. . . . .One of my faves. . . . .Thanks for sharing, Tim.”

    Like

  3. Tim Bryce said

    A W.A. of the Dominican Republic wrote…

    “Excellent article Tim. Hopefully your dissertation sank in to some of the students. Unfortunately, you and those as myself, are fighting against thousands of teachers that indoctrinate our children from grade 1 and are being taught and “brainwashed into believing capitalism was evil and simply represented another form of greed” as you so correctly state. I began to see this 40 years ago when the teacher’s union began to grow stronger and stronger. And as the union grew, so did the beginning of the destruction of our children’s minds and over the years they have lost the ability to understand the values of capitalism vs. socialism. It really is sad. My wife, Mary Ann worked for TSA at the Tampa airport. She is a hard worker and after years of seeing the “sluff off” of most of the employees she worked with, she became more and more frustrated and realized the corruption in the government work force. We had originally planned to move to the DR after she had 10 years of service, but as she saw so many of her co-workers abuse the system that was set up by the government, I asked her if she wanted to work 3 more years being frustrate just to get an extra $400 a month in retirement, or get the heck out now and move to the DR so we could enjoy the remaining years of our life. Well, you know the answer to that. Our home was already built here and we began to make plans and moved 8 months later. I remain active by sending emails to both my conservative and liberal friends, even though some of my liberal friends have asked to be taken off my email list as they do not want to receive or even look into both sides of the political debates that are currently going on. I wish you could give your dissertation all over the country to these young people, and then maybe, just maybe, the country can turn around as they mature.”

    Like

  4. Tim Bryce said

    An L.M. of Chicago, Illinois wrote…

    “Another poignant piece. They are taught so much and yet how little they learn.”

    Like

  5. Tim Bryce said

    An M.M. of Cincinnati, Ohio wrote…

    “Well done, Tim. If only every high school in America had someone explaining the differences between capitalism and socialism (and communism as well) to students. I was thrilled to get a call from Young Republicans telling me that they plan to visit high schools and colleges to explain capitalism and the Republican party to high school and college students, since it’s obvious they don’t understand either one. And it’s obvious that we’ve allowed Democrats and socialists to define Republicans and capitalism and they’ve done a poor job of it.” :)”

    Like

  6. Tim Bryce said

    A B.H. of Boulder, Colorado wrote…

    Sorry to be such a cynic, but WHY would you think our current educational system would actually “educate” our children, give them the tools to learn, to think, and to understand certain critical things about life? My youngest daughter thought Chicago was a state, didn’t have a CLUE about geography or history. She could do math fine, even read Shakespeare in the 7th grade, but had no clue how to put all those skills together into a cogent package of “learning.”

    Actually, if you look critically at the Soviet Communist version of socialism, those in positions of power within the party were “compensated” by perks such as a vacation dacha, spacious apartments where the proletarian workers were housed in small apartments – sometimes with multiple generations of a family living together, AND … they got cars (chauffeured), better food, better clothing, … in short, a better lifestyle.

    The same was true of athletics – the better the athlete and more wins/medals they won, the better their lives and the lives of their family.

    So…socialism on the surface MAY look good, but in practice it doesn’t follow the rules it says are its foundation. It brings to mind the engineering mantra “It looked good on paper, but didn’t work in the real world.”

    Like

  7. Tim Bryce said

    A J.S. of Skidway Lake, Michigan wrote…

    “Schools tend to be socialistic, promoting liberal agendas, but for the students to not receive a full education is criminal. I am amazed that more taxpaying parents are not outraged by the low standards and poor curriculum offered in schools. I have heard so many parents defend the public schools by saying “It’s free”, when, in fact, we all pay heavily for public education.

    I also see the differences as Capitalism = striving for excellence and innovation; Socialism = punching a clock and meeting the requirements. One allows for unlimited progress and optimism, the other puts a limit on achievement and fosters apathy. I hope these kids listened and took the lesson from you, Tim. “

    Like

  8. Tim Bryce said

    A U.V. of Largo, Florida wrote…

    “Sure hope the young ones got the difference between the two philosophies. I enjoy reading your articles. They make me think, which is their purpose. FYI – I read Atlas Shrugged in 1962/63. Read it many times since then. Wore out paperbacks and finally went to hardcover, which I still have and will read again soon. Now there is a person who makes you think! And she’s on the money.”

    Like

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