A Brief Explanation of State Socialism, Capitalism, Libertarian Socialism, Anarchism, and Communism, and Why They Were Redefined by Capitalist Empires

Socialism, communism, capitalism, and anarchism are widely misunderstood terms. This is because the ruling class has redefined them. Deceptive propaganda attaches stigmas to equitable systems while exploitative and oppressive systems are often associated with words like “democracy” or “liberty,” so that we will allow and even support our own exploitation. Capitalism is an “economic system…

Socialism, communism, capitalism, and anarchism are widely misunderstood terms. This is because the ruling class has redefined them. Deceptive propaganda attaches stigmas to equitable systems while exploitative and oppressive systems are often associated with words like “democracy” or “liberty,” so that we will allow and even support our own exploitation.

Capitalism is an “economic system in which resources and means of production are privately owned and prices, production, and the distribution of goods are determined mainly by competition in a free market.” In a completely capitalist system, which does not exist, there would be no non-profit institutions, and nothing would be free, including life-saving public services. Every inch of land and every drop of water could be claimed as private property. There would be no social safety net that could protect people who can’t work for others. If you couldn’t afford health insurance and you became severely ill, then you could die or at the very least be unable to work, resulting in debt and eventual homelessness. Fires would only be put out by fire departments if there were individuals willing to pay them to do so. Capitalism dictates everything is a potential source of profit and it completely disregards all symbiotic relationships we share with nature. As Noam Chomsky said in The Kingdom of Survival, “A true capitalist economy would self-destruct in five minutes.”

Capitalism is a zero-sum equation. In this system, one person’s loss is generally another person’s gain. This is the case in the stock market and nearly every industry. For example, the loss of someone’s house due to a foreclosure is profit for the lending bank. The conflict of interest is conspicuous in industries like private prisons and insurance. Insurance industries have no financial incentive to approve legitimate claims. The largest companies monopolize the industry, giving us very few choices. They make billions by denying claims made by those of us experiencing sickness or disaster. Similarly, private prisons have no financial incentive to rehabilitate anyone when they can make more money the longer inmates stay.

When economists and people in positions of political and corporate power talk about “free trade,” they’re usually talking about the “freedom” managers and money movers have to make as much as possible by exploiting the Earth and life on it. They’re not referring to the freedom of workers to negotiate wages or working conditions or to collectivize and share ownership of businesses and profits. The relationship between employers and employees is governed by an unequal power dynamic because we are selling our labor and time to be able to survive. In contrast, when we trade our labor or time with one another, we can have more reciprocal and equitable relationships.

Capitalists have the “freedom” to drill for resources like water that ought to be considered part of the commons and sell it back to us. There are no discounts for people dying of dehydration and they can be imprisoned for trying to take it. What does that have to do with our freedom? Needless to say, not everything in this world should have a price tag.

Capitalism puts people with massive capital, resources, and monopolies at a much greater advantage over people who don’t have such capital or resources. They can make money passively through usury, interest, and speculation. They have vastly disproportionate influence on the stock market. They can trigger selling panics and make more money by buying after prices drop. A savings account with a five percent interest rate and a balance of a billion dollars will make fifty million dollars per year. Most of the world’s billionaires only received their wealth through inheritances generations old made from colonialism, imperialism, and the slave trade as opposed to their own hard work. Many others got their wealth from exploiting third world laborers and the Earth’s natural resources. They can afford good lawyers, bribe judges, bribe politicians to pass legislation that favors them, pay for propaganda that supports them, have police on their payroll, and pay off anyone else who stands in their way or pay someone else to intimidate, beat, or kill them. In the rare case they get in legal trouble, they can almost always post bail. They also have the resources to escape to another country with no extradition to their home country. They are revered by millions of people but there is nothing noble, respectable, or even rewarding in any spiritual sense about hoarding ridiculous wealth accrued by the exploitation of others and the natural world while the rest of the world suffers.

The “free market” is an effective propaganda term. It’s like the “freedom” US politicians told us they were going to bring the people of Afghanistan and Iraq with tons of explosives. Some seem to tolerate working like slaves so long as they believe there is a chance they can become slave owners if they “work hard enough”. But those who weren’t afforded major advantages like a large inheritance or a family with a monopoly never become one of those masters.

The capitalist assertions that the market will “sort out” all the problems of the world and that “capitalism works if you vote with your wallet” are myths. 80% of the world lives on less than $10 a day while the richest 1% own half of the world’s assets. That is hardly one person, one vote. The poor do not have the resources to “vote” with their wallets because the capitalist mass producers like the Wal-Marts of the world use cheap labor and steal resources, undercutting all competition. When most people barely have enough money to survive, it’s understandable they buy their products because they’re the cheapest, even when they would rather support more ethical individuals or small businesses. The poorest people end up shopping at companies that exploit people in the same economic situation and those with even less abroad because they have very few options.

What is most profitable is rarely good for anyone or the environment. It is profitable to steal resources, displace indigenous people from their land, and force people to work. Logging, fracking, drilling for oil, war, (when it is “won”) mountain top removal, use of toxic pesticides and herbicides, and predatory policing are all profitable. On the contrary, what is not always financially profitable can be extremely good for people and planet like non-profit social work, street art, free music, community outreach, harm reduction, trash pick-up, planting trees, conserving biodiversity, environmental stewardship, and so on. Free markets don’t equal public interest. The ruling class would like us to believe that a “trickle-down economy” reliant on their “charity” is more effective than simply taking their wealth.

In a completely capitalist economy, the government would have no control over the means of production or distribution, but this is not the case in any country. No country is a completely capitalist country, despite the fact that many countries identify as “capitalist”. Most are actually crony capitalist. The wealthy rely on governments and their monopoly on violence to protect them. Capitalist managers rely on cops to break worker strikes and quell worker dissent; they rely on state armies to secure resources, and they rely on government subsidies, tax breaks, bailouts, and bribes to politicians and judges for legislation that favors them.

The government has a tremendous amount of control over the means of production in countries that identify as capitalist like America. This can be relatively better in theory so long as the government has public interest in mind. But this is rarely the case. The government can regulate vital services and products, such as health care, education, food, and water to ensure they are not just sold to the highest bidders and thereby prevent deaths and suffering. But the problem is that governments only want to regulate and control certain means of production so that they can profit from them. Such governments are truly crony capitalist, also known as corporate capitalist or state capitalist. They will claim they are not running an industry for profit (like prisons), but they will anyway and do so with little or no regard at all for public interest or health. They also receive political donations from the largest corporations so that they will work for them when in office.

Crony capitalism is the only kind of capitalism that can exist in the real world because there are already enormous discrepancies in the distribution of wealth and this influences just about every aspect of our lives. Capitalists often argue “people are naturally bad, which is why we need free markets.” But free markets blindly trust people’s wallets to do the right thing and fail to recognize the negative externalities that catch up to us all. The Earth is an interconnected web of living ecosystems, and we can’t keep destroying the Earth and pretending we’re not destroying ourselves in the process.

Capitalists like to argue, “jobs are voluntary, so capitalism is voluntary.” But what’s the alternative? Homelessness? Hunger? We are forced to work because we cannot freely live off the land as it has all either been claimed as government or private property. In many places subsistence fishing, hunting, and foraging are illegal on public land without costly licenses. So we are forced to work for capitalists and the kinds of labor that are deemed valuable within a capitalist system are limited. If you are disabled, for example, the kinds of work you can do may not be valued by capitalists. Inflation also makes it difficult to stop working or divest from the system, even for those who have been working and saving their whole lives, as the value of money saved decreases over time if it is not invested, feeding the machine.

The modern-day slave owners in India, Mauritania, the Ivory Coast, and many other countries are capitalists by definition. But of course, being a slave is not a voluntary “job.” When wage-slavery is used, we often take jobs we don’t want because large corporations and governments have robbed us of better opportunities and resources as they have claimed them as their own. An indigenous population living off the land for thousands of years with no formal land title could have their land taken away by extractive corporations that leave poison in their wake. With their land destroyed they may be forced to take jobs at one of these corporations as they can no longer live off the raped land. Of course, no part of this is voluntary for them.

There is also inherent hierarchy and inequality in the employer / employee relationship, regardless of the circumstances. Employers can control every aspect of their employees behaviors, much like governments, and the subsistence of employees often relies on their continued employment. Finding the time to get a better job can be nearly impossible when work and other responsibilities take up all of our free time and in capitalist systems better jobs require formal education at universities, which require more money. As opposed to being voluntary and free, many employers exploit the inherited financial desperation of their employees. A transaction can also be “voluntary” but tremendously exploitative. To provide an extreme example, an enormous food corporation could see a “market” of starving people and charge $5 for each grain of rice, which the people might “voluntarily” buy if there were no other options available and they had the means. Would capitalists praise the food distributor as a “life-saver?” When the conditions are life or death, there is no choice if we want to live.

In a truly capitalist system, politicians would not be subsidizing the most profitable companies in exchange for campaign contributions as they do in America and many other countries. They also would not be bailing them out with tax-payer money in order to keep them afloat or giving them enormous tax breaks or enacting legislation that favors them in exchange for bribes. If governments cut off their support to the largest companies that exist right now, workplaces would likely be transformed. Workers would go on strike and since the police would not come to put them down, their employers would have to comply with workers’ demands or at the very least negotiate. If not, they would have to spend huge sums of money on private police forces and strikebreakers, which was common in the early and mid-20th century.

Some argue that in a truly free market system with no government intervention inequality would even out and that bloated, transnational corporations without government subsidies, tax breaks, bail-outs, and other forms of state protectionism would fail. But if we abolished governments yet allowed corporate monopolies to continue to prosper, they would simply fill the power vacuum left by the state and replace every oppressive government institution. Federal and state prisons and county jails would be replaced by private prisons. State armies would be replaced by private military contractors and mercenaries. Private police forces would replace state and federal police and so on, and they would have no obligation to answer to the public. If they continued to make money, that’s all that would matter to investors.

If we were able to abolish the state, why would we not dethrone these economic masters who have collaborated with governments to commit countless crimes against humanity? Why would we just wait for the market to “sort it out” even if we believed that nonsense? If governments are dismantled why should those ill-gotten resources and riches made from imminent domain, coercion, violence, and exploitation remain the property of billionaires?

Most big businesses only become big because of governments that support them for selfish reasons, so it is hard to imagine what a purely capitalist economy would look like. Without government support, it is possible that big business would cease to be so big. America’s corporations and military may be proof of this. America would not be the richest country on Earth without its military since it (first and foremost) protects and grows American corporations. Naomi Klein’s book Shock Doctrine and Smedley Darlington Butler’s War is a Racket explain this well.

There are two vastly different kinds of socialism. A system wherein the means of production and distribution are controlled by the government is state socialist, and almost every government has state socialist elements. Some governments use taxpayer money to fund public education, public libraries, fire stations, and some form of health insurance provided by the state. But these governments are not purely socialist by strict definition.

In a libertarian socialist economy, the means of production are publicly or commonly owned and shared and workers do not sell or rent out their labor and bodies to employers for capital. A libertarian socialist economy produces what is needed and will be used by the general population, as opposed to capitalist economies, which produce whatever will create the most profit, regardless of the environmental or social outcomes. Expectations of people in a libertarian socialist system are based on their ability and what they receive is based on their actual needs.

Some capitalists argue our current system is “just the way the world works”. But this wasn’t the case for most of human history and it’s not the case in areas of the world where people live off of the land without money. When work is not demanded from us, we naturally want to “work” (not for others who pay us for our labor but for ourselves and for those we care about) and we generally work better, more creatively, and efficiently when we’re not just working frantically to survive on meager wages. Cooperation, collaboration, and collective ownership are much more conducive to productivity, innovation, and well-being in our economic, social, and environmental spheres than cutthroat competition for survival. Barter, resource-based economies, ecological economies, and gift economies work far better than fiat currency.

State control and common control of the means of production are incredibly different in practice. The way that companies come under state control is through nationalization or expropriation, which gives the state the power to control these companies. When a company is nationalized, the government that acquires it becomes responsible for representing the workers and their interests, which they often don’t but many will still defend these governments because they say they do.

Businesses that come under common control via libertarian socialist principles operate very differently. A workplace under common control is a worker-managed enterprise or a workplace democracy. Workers in them have direct and equal say over aspects of their business. There are no formal managers, unless the workers decide they want them, in which case they are elected. All significant decisions about the company, work, production, and allocation of resources are made internally by a popular vote. Solutions are sought that most benefit the whole. However, this does not happen in all self-proclaimed workplace democracies because some still have hierarchies that disproportionately benefit de facto leaders. The success of a democratic workplace depends on its workers. If they collaborate, care for one another, think critically, and see us as a part of nature, their chance of success will be high. Libertarian socialism is in line with anarchism because both oppose rulers and advocate autonomy.

Like socialism, there are two types of communism: state communism and libertarian, non-authoritarian communism. State communism like state socialism always becomes despotic because these ideologies retain the state, which can never be reformed or trusted. Most state communist ideologies like Bolshevism, Leninism, Marxism, and Maoism claim the power of the state first has to be strengthened after it is taken over by a “professional vanguard,” which means this kind of communism is always doomed to devolve into autocracy and dictatorship. The Soviet Union, for example, imprisoned thousands of political dissidents and anarchists, and millions of Russians died from the famine in 1932-1933 caused by requisitioning farmers harvests to export to other nations (under the guise of “collectivization” and “expropriation”) to fund State functions. A similar situation evolved in China with the rise of Mao Zedong’s and his “Great Leap Forward,” which killed between 15 and 55 million people. Chinese officials forced farm workers to work themselves to death to meet quotas and collected their harvests to hoard resources for themselves, (much of the harvest was exported and sold for profit) leaving farm workers to starve. Starving people in China were also tortured and killed for begging for food, stealing scraps of food, refusing to hand food over, and trying to flee. The Chinese Communist Party even banned villagers’ traditions like weddings, local markets, funerals, and festivals and inter-county travel without authorization from authorities.

Many people are not aware of this history because they didn’t live through it or study it.  Because the USG vilified socialism and communism (without distinguishing between the two types) many who are aware of USG imperialism and hypocrisy figure any condemnation of the Soviet Union or other self-proclaimed “communist” regimes is simply capitalist propaganda. But the US vilified the Soviet Union not because they were implementing socialism but because they were a competing empire. Their economic systems, in practice, were very similar as they both benefited the ruling class.

The word anarchy originates from the Greek, anarkhos, which means “without ruler,” and this is the most concise definition. Anarchy can have rules but only rules that everyone in a voluntarily created community or group agrees to. The only hard and fast rule is respecting other people’s autonomy. When this rule is broken, instead of police forces, people defend themselves. In an autonomous or anarchic system, members govern themselves, instead of electing parasites to “represent them” and funding mindless police forces that just want to punish, harm, incarcerate, terrorize, steal, and humiliate people.

Any form of anarchic organization has to be directly democratic, (not representative) organized from the bottom up, and lack any monopoly on force. As the central tenant of anarchism is “no rulers” there can be no managers or wage slavery. Instead, in anarchy workplaces are democratically managed and this makes it similar to libertarian socialism. Some kinds of anarchism can refer to a system that lacks any type of government at all. For libertarian socialism or anarchy to function, there must be willingness to collaborate and understanding why it is wise to do so. Collectivization cannot be forced on common people.

Both state socialism and state communism are never liberatory because rulers cannot be trusted to represent the interests of workers or common people. They control businesses just to profit from them. This means in practice “state socialist” economies generally run more like state capitalist or crony capitalist economies as the Soviet Union did. As Noam Chomsky said, current socialist governments still call themselves socialist because “by associating their own destruction of socialism with the aurora of socialism, they hope to gain credit with working classes and other progressive sectors.”[1] Ultimately, state communism and state socialism are reformist ideologies that posit the state built on genocide and slavery can be used for positive endeavors alone.

Lenin himself admitted he was instituting state capitalism in an article published in Russky Golos in 1923: “The state capitalism, which is one of the principal aspects of the New Economic Policy, is, under Soviet power, a form of capitalism that is deliberately permitted and restricted by the working class. Our state capitalism differs essentially from the state capitalism in countries that have bourgeois governments in that the state with us is represented not by the bourgeoisie, but by the proletariat, who has succeeded in winning the full confidence of the peasantry. Unfortunately, the introduction of state capitalism with us is not proceeding as quickly as we would like it.”

Arguably, the Soviet Union and other states that have or do call themselves Communist or socialist have revealed the fundamental problem of the state itself. Without removing the state and giving workers and common people direct control, representatives almost always become corrupt, and as modern nation states are so large it is impossible to have neutral, unbiased representatives who can represent millions of people. Emma Goldman noted in her autobiography, Living My Life, “I pointed out that we could not hope to achieve freedom by increasing the power of the state, which the socialists were aiming at. I stressed the fact that political action is the death-knell of the economic struggle.”

 In one of his most well-known works, Statism and Anarchy, Mikhail Bakunin wrote on the subject that “According to the theory of Mr. Marx, the people not only must not destroy [the state] but must strengthen it and place it at the complete disposal of their benefactors, guardians, and teachers the leaders of the Communist party, namely Mr. Marx and his friends, who will proceed to liberate [mankind] in their own way. They will concentrate the reigns of government in a strong hand, because the ignorant people require an exceedingly firm guardianship; they will establish a single state bank, concentrating in its hands all commercial, industrial, agricultural, and even scientific production, and then divide the masses into two armies — industrial and agricultural — under the direct command of state engineers, who will constitute a new privileged scientific-political estate.”[2]

Even earlier in 1866 he wrote to Alexander Herzen and Nikolay Platonovich Ogarev that state socialism would turn out to be “the most vile and terrible lie that our century has ever told.” He also said in Statism and Anarchy that “No state, however democratic — not even the reddest republic — can ever give the people what they really want, i.e., the free self-organization and administration of their own affairs from the bottom upward, without any interference or violence from above, because every state, even the pseudo-People’s State concocted by Mr. Marx, is in essence only a machine ruling the masses from above, through a privileged minority of conceited intellectuals, who imagine that they know what the people need and want better than do the people themselves…But the people will not feel better if the stick they are being beaten with is called the ‘People’s Stick’” Russian anarchist, Vsevolod Mikhailovich Eikhenbaum (or Voline as he is best known) similarly remarked in La Révolution Inconnue, 1917-1921, “Any attempt to carry out the social Revolution with the aid of a state, a government, and political action, even should that attempt be very sincere, very vigorous, attended by favorable circumstances and buttressed by the masses, will necessarily result in state capitalism, the worst sort of capitalism, which has absolutely nothing to do with humanity’s march towards a socialist society.”

[1] Chomsky, Noam: “Manufacturing Consent: The Political Economy of Human Rights Lecture and Q&A.” March 15, 1989. <Pdxjustice.org.> Lecture.

[2] Mikhail Bakunin: Государственность и анархия or Statism And Anarchy in English (1873).