Capitalism and Socialism Disagree About The Nature of People

When people disagree and neither is trying to mislead or take advantage of the other, you will always find a fundamental difference in the information they possess, their interpretation of it, or the method they use to think about it.

Such is the case for the conflict between capitalism and socialism.

Well-meaning people can disagree.

A worthy article you can read for details.

Socialism Requires a Dictator by Richard B. Emeling

It’s about how we see people:

The capitalist observation

Classical liberals, not to be confused for what passes as a liberal today, hold one position

“Does man have a basic and invariant human nature that may be multi-sided and complex, but no less fixed in certain qualities and characteristics?”

That question leads to a description of the nature of people.

“human beings are basically what they are: fairly reasonable, self-interested beings, guided by goals of personal improvement and betterment as the individual comes to define those for himself.”

and a path to implementation

“The social dilemma for a humane, just, and widely prosperous society is how to foster a political and economic institutional order to harness that invariant quality in human nature so that it advances human betterment in general rather than becoming a tool of plunder. The classical liberal answer is basically Adam Smith’s system of natural liberty with its open, competitive, free-market order.”

The socialist observation

“is human nature a malleable substance that can be remolded like clay in the sculptor’s hands by placing human beings into radically different social arrangements and settings?”

That question leads to a description of the nature of people.

“They insisted that if men were selfish, greedy, uncaring, and insensitive to the circumstances of their fellow men it was due to the institution of private property and its related market-based system of human association”

and a path to implementation

“Change the institutional order in which human beings live and work and you will create a “new man.”

“Indeed, they raised to the ultimate human societal ideal, a world in which the individual would live and work for the collective, the society as a whole, rather than only for his own bettered circumstances, presumably at the expense of others in society. Socialism heralded the ethics of altruism.”

Where to next?

Implementation always follows from information and how you use it.

If the capitalists are right about the nature of humans, then socialism cannot work. If the socialists are right then people must be reconditioned to delete their fundamental nature and strong, even though dictatorial, leadership will be required. Presumably by people who do not share their perceived inherent failings of people in general.

In some ways it is a nature versus nurture question.

The observations so far

We know that captialism has worked for several centuries but that does not necessarily mean socialism cannot work. On the other hand no iteration of socialism has ever succeeded. It has benefited those those in power, those who controlled the experiment but then only for a short time. Dictators typically have inadequate retirement plans.

The implementation of socialism so far has been along the line of pre industrial standards. The king and courtiers and the peasants. I am unable to see how that is desirable for the many. It makes sense for the few in power.

Reality is you cannot conclusively prove socialism won’t work. You cannot conclusively prove a negative premise.  So people continue to talk about how “true” socialism has never been tried. None seem to have a comprehensive and coherent vision of that system.

My question(s)

What exactly is true socialism? Is the underlying premise about the nature of people right? Could people work to better themselves without self-interest? Would a different context change that or would the betterment part be left aside? If the betetrment part were left aside how would the necessary resources appear? Socialism assumes the nature of humanity can change, explain how that happens.

What if those who promote socialism are themselves evidence of their belief in the nature of people in general? “Selfish, greedy, uncaring, and insensitive to the circumstances of their fellow men.” If so why shouold we allow them to attemtpt to change anything?

I think it is impossible to believe that an unselfish, sharing, caring, and sensitive person could ever advocate socialism as a solution, unless you assume people have changed prior to your implementation. Without that change the needed dictator must exemplify all those very negative characteristics. Just with a soft shell for public consumption until the time they need not display the shell. Observing socialist dictators does not deny the idea of a false front and eventual despot, who is “Selfish, greedy, uncaring, and insensitive to the circumstances of their fellow men.”

Reread “The Power Game” about how many people have a need for power just for its own sake. Or think about Menken’s observation

“The urge to save humanity is almost always only a false-face for the urge to rule it. Power is what all messiahs really seek: not the chance to serve. This is true even of the pious brethren who carry the gospel to foreign parts.” H.L. Mencken, Minority Report

It starts with the differing premises but quickly explains a solution with no apparent way to force people to change. Given the success of humanity to date, it is likely the fundamantal nature is as Adam Smith suggests and the power hungry are jealous because they cannot achieve their version of success. It is rather like the idea that we have identified the ingredients and we can describe the outocem. In the middle though is the implicit thought, “here a miracle occurs.”

Be careful to test the validity of your premises before you launch a system to optimize the world. Outcome driven ideas that ignore the method fail. For example, the plan that the rich fund the socialist ideal includes the assumption there will always be rich. That assumption is in the miracle class and should be proven to be a fact before beginning the change.

Be sure the opposite of your ideal is wrong as well as being sure your way is right. And always notice, without a method, no goal is worth pursuing.

Also there may be something between the extremes.


I help people understand and manage risk and other financial issues. To help them achieve and exceed their goals, I use tax efficiencies and design advantages. The result: more security, more efficient income, larger and more liquid estates. Please be in touch if I can help you. don@moneyfyi.com 705-927-4770

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