In today’s political news cycle, we are bombarded with buzzwords almost 24/7. “Capitalism,” “socialism,” “free market,” “socialization,” “privatization” and so-on are words that I can remember hearing as long as I’ve been conscious of politics. A lot of those words all have an official dictionary definition, but in my experience, the actual intended meaning will change quite a bit depending on the intent of the person using them.
Instead of writing about which system I think is best — an answer that I think varies widely based upon the size of the population, the resources available and many other variables — I am breaking down some of my interpretations of some of the buzzwords listed above, giving my opinions on what I believe to be common misconceptions about both “capitalism” and “socialism” and explaining why almost every nation’s system, whether praised or derided by the international political community, is actually something called a “mixed economy.”
First off, let me define the most popular ideological definitions that all of us have likely heard at some point, capitalism and socialism. Generally speaking, we associate capitalism with right-wing ideologies and socialism with left-wing ideologies. That is correct. However, generally speaking, when talking to people who do not believe in or support socialism, those individuals will likely actually give much too broad of a definition of what they believe socialism to be. When talking to people who are opposed to capitalism, those individuals are likely to give much too broad of a definition of what they believe capitalism to be.
In short, capitalism, as defined by Merriam-Webster, is an entirely privatized economy. That means that private citizens — either wholly, through partnerships or through owning shares of a corporation — control (another buzzword) the “means of production.” The means of production, in short, means the way of providing goods and services. Socialism, according to Merriam-Webster, is an entirely socialized economy. In other words, the public — through their theoretical ownership of the government — controls the means of production.
Now, with that having been established, what countries actually follow either one of those schools of thought in their entirety? I would argue zero. In political discussions, with friends and acquaintances, as well as students from Kent and my previous school, Tri-C, people who identify as “capitalist” generally try to champion the United States as a capitalist nation and criticize Canada as a socialist nation. Alternately, supporters of socialism will criticize the United States as a capitalist nation while praising nations such as Finland as socialist.
The reality? In America, there are private industries as well as socialized industries. Oil is a private industry, run by private citizens, whereas roads and highways are socialized. In Canada, retail is a private industry, whereas healthcare is public, or socialized. Finland gets creative: its oil industry is a monopoly where one corporation, called “Neste” and known in the U.S. as Neste Worldwide, has the Finnish government as the largest shareholder. It is a private industry with heavy public ownership and very heavy public influence. Finland also has many public and private industries, just as the United States and Canada do.
While it can be easy to see the elements of both capitalism and socialism in the brief outline of those nations’ economic structures, I also believe it is clear that all three of them are neither truly capitalist nor truly socialist, despite what almost everyone wants to claim. The aforementioned term “mixed economy” is used often to describe systems like those of nations like Finland. While that application of the term is certainly accurate, I believe it is actually much more expansive than that.
Many people will argue there is no such thing as a mixed economy, but this is mainly a matter of semantics. The viewpoint that no economy can be mixed is usually based around the idea that either “any economy which has aspects of ‘socialism’ is a socialist economy” or that “any economy which has aspects of ‘capitalism’ is a capitalist economy.” However, both cannot be true. While purism is as valid a belief system as any other, and a willingness to stick to one’s philosophy regardless is commendable, I believe a sounder definition of economic terminology makes all such issues easier to understand, and, most importantly, works towards eliminating common misconceptions.
What is America if not a mixed economy? What is Venezuela, for that matter? All of these economies are “mixed,” to a certain degree, and cannot be defined by either “capitalism” or “socialism.” Therefore, is a mixed economy more in line with (economic) right-wing thinking or (economic) left-wing thinking? It depends entirely on just how that economy is mixed.
I would argue that the United States, throughout its overall successful history, has leaned more right-wing, or toward privatization, in many ways. Finland is also a very successful country and has certainly leaned more left-wing, or toward socialization. There are also unsuccessful examples of mixed economies such as Venezuela, which is in major trouble and leans more towards socialization. For a period of time in the 1990s, Japan (leaning towards privatization), went through a terrible period of economic deflation — where property loses value — and the United States (again, leaning towards privatization), has had several periods of economic difficulty, most notably the Great Depression.
In short, I think that it is very difficult to have a purely capitalist economy or a purely socialist economy. Think of security and defense. Would a privatized military be a viable option to defend a nation as large as the United States, Canada or China? I sincerely doubt it. Would privatized police forces be able to protect a municipality as large as New York adequately? Probably not. Similarly, if every industry were completely socialized, that could very easily end up functioning as a series of monopolies, which could very well lead to a collapse. This does not mean that either of those systems are “wrong” or not viable. It simply means that it is very, very difficult to maintain either of them in a long-term manner.
Ross McDonnell is an opinion writer. Contact him at firstname.lastname@example.org.
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Hi, I’m Lauren Sasala, a senior journalism student from Toledo. I’m also the editor in chief of The Kent Stater and KentWired this semester. My staff and I are committed to bringing you the most important news about Kent State and the Kent community. We are full-time students and hard-working journalists. While we get support from the student media fee and earned revenue such as advertising, both of those continue to decline. Your generous gift of any amount will help enhance our student experience as we grow into working professionals. Please go here to donate.