Recently we presented a workshop, titled “Three Punches to Knock Down Democratic Socialism” at the Western Conservative Summit in Denver. We thought not many people would be interested in such a dry subject, yet over 100 people turned up at our workshop and we had standing room only.
The overwhelming interests in this topic shows that many freedom lovers want to know how to communicate effectively their support for capitalism and push back on socialism’s erosion to our minds and our society. We believe it takes knowledge and tactics.
Capitalism is based on private property with individual ownership or control of the means of production – land, labor, and capital. Market prices guide the use of resources through voluntary exchange. A socialist economy is defined as government ownership or control of the means of production. Centralized authority determines the use of resources through the coerced exchange of a planned economy.
Capitalism requires a limited government whose purpose is to secure our rights to life, liberty, and the pursuit of happiness. Achieving happiness is up to the individual. Socialism requires an expansive government whose purpose is give things to us and do things for us. Government provides happiness.
A debate between a capitalist and a socialist always inevitably leads to the question: What about the poor? In a socialist’s eyes, capitalists are exploiters of the poor. But that couldn’t be further from the truth. The fact is that for thousands of years of recorded history, the normal state of humanity has been a daily struggle just to survive . Only the birth of capitalism led to an unimaginable explosion of prosperity and human flourishing, particularly as it was adopted in America and Western Europe. Other countries were mired in poverty as long as they were mired in Socialism. Once they moved toward market-based economics, prosperity began to rise. Capitalism is the only social economic system that has successfully lifted billions of people out of poverty.
If you really care about the poor, you should advocate for a capitalist economy, not for a socialist one.
Yet capitalism is about much more that creating prosperity, it is fair and just. When people know that their property is protected by government, it leads to a more peaceful society as well. When people know that the rule of law applies equally to all, and that they have equal opportunity to pursue their individual values, they accept the idea of unequal outcomes based on unequal efforts and unequal talents. It is fair and just that Michael Jackson, LeBron James, and Oprah Winfrey earn more than the average person. In fact, it would be unfair and unjust for them not to be allowed to earn more than average. If you really care about fairness and justice, you should advocate for a capitalist economy, not for a socialist one.
Today’s socialists like to argue that they don’t want the old Soviet style socialism. Instead, they only want America to be more like Sweden. Democratic Socialists point to Sweden, Norway, and other Nordic countries as examples of successful socialism. This will be a good time to let socialists know you also want America to be more like Nordic countries because they are not Socialist.
Sweden, Norway, Finland, and Denmark do not have minimum wage laws. Employers and employees are free to negotiate the conditions of hiring. Sweden has no property tax or inheritance tax. Sweden’s corporate tax rate of 23.5% was much lower than the U.S. rate of 35% (before the Trump tax cuts reduced the top corporate rate to 21%). Sweden makes the poor and the middle class pay their fair share of its generous social welfare system by having a flatter, less progressive personal income tax system than ours.
Sweden has 100% universal school choice between competing public and private schools. Parents shop in a competitive market for their children’s education. Finland and Denmark have 70-90% school choice. When it comes to education, the Nordic countries have a strong market-driven system that allows parents to choose.
Socialists who claim they want the U.S. to be more like Sweden generally avoid talking about these market-oriented policies.
The battle of ideas, capitalism vs socialism, is at the very core of the current political discourse. Whichever side wins this battle will determine the fate of the American Experiment. We believe that freedom lovers can win this battle of ideas with knowledge, facts and tactics.
Paul Prentice and Helen Raleigh are Fellows of the Centennial Institute at Colorado Christian University.