From a Perry Willis email – 4/16/2024
Someone posted this meme on Facebook…
Socialism is the fire department saving your house. Capitalism is the insurance company denying your claim.
I make the needed corrections here…
Socialism
Socialism is when the workers own the means of production (businesses, factories).
This can be done through a co-op, stock purchases, or state nationalization.
Only the last version requires force. The coercive version of socialism has led to poverty (and often mass death) everywhere it’s been tried.
A welfare state is not socialism, though socialist governments will also be welfare states. Many people are confused about this. For instance…
The United States is a welfare state, but not a socialist one.
In the 50s, 60s, and 70s many European states had strong elements of socialism in the form of large nationalized companies and industries. Most of these nationalized firms were sold off in the 80s because of poor performance.
People like Bernie Sanders didn’t get the message. They still think the Scandinavian countries are socialist. They’re not. They’re capitalist free markets with robust social safety nets. You might call this a mixed economy if you want, but it’s definitely not socialism. Venezuela and North Korea are socialism.
Fire fighting
A fire company can be volunteer, tax-funded, or commercial. All three work. None of these means of providing firefighting services have anything to do with traditional socialism.
Capitalism
Capitalism is about delaying gratification (saving money) so as to accumulate capital. This capital is then used to buy tools that expand production. Expanded production permits increased consumption later. This is why capitalist societies have better standards of living than socialist nations.
The production tools capitalism funds can either be purchased directly (as with a journeyman carpenter buying a saw) or indirectly by investing in a stock company that assembles tools in a factory.
Anyone who has savings or investments is a capitalist.
Insurance claims
Some capital is invested in insurance companies. Most insurance companies pay legitimate claims most of the time. If they did not do so no one would buy the product, and if no one bought the product no one would invest capital in it.
Conclusion
A lot of people talk a lot of rot about socialism and capitalism. They should stop.