All Social Systems Need Capitalists

Jonathan Poland
4 min readJan 6, 2021

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It’s amazing how many people, even super smart ones, believe that socialism and communism could work — it just hasn’t been done well yet. In fact, some believe that these systems are actually the best for society as a whole.

So·cial·ism
a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

The community tends to end in the state, a dictator or supreme leader who exerts power over the entire structure. Stalin, Lenin, Putin, Mao, Hitler, Chavez, Castro, Jong-il, Jong-un.

This is the trickiness of socialism. It sounds good to the layman and uninitiated, but those that have escaped it or lived through it understand this is the end result EVERY SINGLE TIME. Yet, no one wants to admit they’re wrong for thinking it could work in some fictitious book ending that has no basis in reality.

Capitalism
an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.

Contrary to socialism, everywhere this has been implemented, the nation and its citizens have not only prospered incredibly well, but have experienced an unparalleled level of freedom. That’s the choice: freedom vs …

America has some Capitalism, responsible for the elevated standards where even people living below the poverty line have more opportunity and better lives than they would in virtually every other nation.

Keeping up with the Jones’ is what makes the emotion of our 10% poverty level or the wealth gap feel extremely negative. I get it. It has nothing to do with capitalism, because for all intents and purposes we’re not even in the top 10 when it comes to economic freedom.

The United States is a socialist country and that’s why we’re losing in so many ways at the moment. I don’t know about making it great again, but as long as government (the state) keeps getting bigger, complete socialism is inevitable.

Here’s the thing…

It doesn’t matter. Socialists need capitalists not the other way around.

Look at the most recent example of this: China. China is a socialist/communist country (same difference) that uses capitalists to fund its state agenda. They’re slick about it. Who do you think they learned it from?

What makes America great (already) is the freedom to start a business and compete in the marketplace. Even if you think the market is rigged, the ability to get started still exists.

With that in mind…

If you are thinking that Socialism is a good way for society to progress, prove it like capitalists do. It hasn’t been proven yet. Socialism has fucked up every country it touches, every single one. Whereas capitalism has raised the standard of living everywhere it goes. It’s not capitalism that’s broken in America, it’s that too much socialism has creeped in.

Socialist theory argues that the economic system would consist of an organization of production to directly satisfy economic demands and human needs, so that goods and services would be produced directly for use instead of for private profit driven by the accumulation of capital.

Capitalists don’t generate profit for the sake of capital accumulation only, but for what it means to have capital accumulated. Profit means you can keep meeting the demands of the market because you have excess capital that isn’t used up in the production of deliverables. Demands of the market typically are problems like food, energy, and shelter, etc. Profit is there when mistakes happen and savings from the past to can be deployed to survive.

Essentially, socialists are not economists or business people yet they want to do both, poorly as it might be. How would a socialist business operate? I don’t know. I don’t think many people know how to operate a business in the first place, but at least we are all free to try it. There are less than 2 million businesses in the United States with 10 or more employees generating $1 million or more. That number shrinks to just under 300,000 for businesses with 50 or more employees and $5 million in sales.

The majority of businesses are owned by one person with less than 10 employees — more than 12 million of them, not to mention the tens of millions of freelance workers who operate as an army of one. Would socialism help or hurt them or eliminate them entirely?

Where I get confused is when people talk about class divide under capitalism as if the divide doesn’t exist under socialism. It’s worse! Socialists believe the shared ownership of resources and central planning offer a more equitable distribution of goods and services. If you can’t see how that would end in dictators and fascists, learn the history because that’s what happens.

It’s funny how people who like socialism talk about how under it the country would finally be democratic. Does it matter if it’s democratic? Hitler was elected. That didn’t end too well.

Socialism purposes the collective ownership of the means of production, central planning of the economy, and the emphasis on equality and economic security with the goal of reducing class distinctions. Only it creates greater ones because the power is even more consolidated than in a capitalist system.

My absolute greatest fear is that America will embrace this evil and fully turn to it as a political and economic reality, sooner rather than later. If we do this, the world should watch out as our military power which is kept at bay today will be utilized for the wrong reasons.

History tends to repeat itself doesn’t it? Writing this as the capitol building gets stormed by protestors here in DC.

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Jonathan Poland
Jonathan Poland

Written by Jonathan Poland

20+ years advising business leaders. Posts on business, finance, and notes from the journey. More @ jonathanpoland.com.

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