Socialism, communism, and capitalism are widely misunderstood ideologies, along with many others that involve the economy. These terms have been redefined by deceptive propaganda to keep the majority of us from knowing how our economies actually function. Stigmas are also attached to certain economic models like libertarian socialism that are much fairer while exploitative and oppressive models are often associated with words like “democracy” or “liberty,” so that we will allow and even support our own exploitation.
When people in positions of political and corporate power use terms like “economic freedom” and “free markets,” they are usually referring to the freedom capitalists have to make as much money as possible by exploiting the Earth and life on it. In a completely capitalist economy, all the means of production and distribution would be privately owned and operated for profit. In such an 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 government has a tremendous amount of control over the means of production in countries that identify as capitalist like America, which can be relatively better in theory so long as the government has public interest in mind, but they usually don’t. 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 most 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.
In a completely capitalist system, there would be no non-profit institutions and nothing would be free, including life-saving public services. Fires would only be put out by fire departments if there were individuals willing to pay them to do so and people would only receive health care if they had the money to pay for it. As Noam Chomsky said in The Kingdom of Survival, “A true capitalist economy would self-destruct in five minutes.” This is because without restrictions or resistance, corporations are free to exploit the poor and the Earth and amass wealth.
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 actually 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. Even if the world had no governments should corporate monopolies continue to exist, they would just 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 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 the revolution that anarchists hope for involved corporations, it would quickly devolve into an almost analogous system to the one we have now, except it would perhaps be even more despotic. The “Revolution” brought to you by Boeing, Blackwater (now Academi), Lockheed Martin, and General Atomics would be no revolution at all. What guarantee would we have that they wouldn’t turn on us? They exist to make a profit. This means selling weapons and arming anyone and everyone with the money to buy them. This includes warlords, war criminals, terrorist groups, governments, police, and so on.
Adam Smith, seen by many as the dogmatic father of capitalism, said “under conditions of perfect liberty, markets will lead to perfect equality.” But conditions of perfect liberty do not exist anywhere when there is an unequal distribution of capital and power. Smith also wrote the free movement of labor was the basis of any free market system, which also does not exist today. Ironically, Smith further noted “All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”1 This is the kind of statement that would likely be condemned as “anti-business” in this vulture capitalist dominated culture entrenched in our world today, so he is hardly the capitalist stalwart he is made out to be by modern capitalists. (This misrepresentation of Smith is likely due to the fact that most capitalists don’t like to read anything but econ books as they are infected with the confirmation bias.)
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 entirely plausible 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. If crony capitalism did not cause greater economic disparity than pure capitalism, corporate powers may have evolved slightly more evenly, and the regions of the world with the most valuable resources would be living in better circumstances. Africa, for example is the richest continent in terms of its natural resources, but far too many common Africans lack enough basic resources to survive. The Congo alone has an estimated $14 trillion in precious metals) but it is among the the poorest African nations in terms of per capita GDP. This unearthed wealth could potentially be harnessed by the people of Africa and those most in need. (A better solution would be to end capitalism and extraction of precious metals altogether.) However, this doesn’t occur because of crony capitalist empires and the local dictators who rule them and control Africa’s resources. Voluntary, people’s militias or community militias are not strong enough to combat these empires. However, this does not mean true capitalism is better than crony capitalism or that either are good economic models. They’re both disastrous for most people and the planet. Just about everyone in the world can agree that some things must be free and shared and some things should not be extracted. Capitalism dictates everything is a potential source of profit and completely disregards all symbiotic relationships we share with nature.
Services and the means of production and distribution controlled by the government and not run for profit are state socialist by definition, 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 as a whole are not by strict definition purely socialist.
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. In real libertarian socialist systems, individuals receive more when they contribute more. They do not favor the richest people as capitalist economies do.
State control and common control 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, (i.e. state socialism). 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 believe they do.
Businesses that come under common control via libertarian socialist principles operate very differently. A workplace under common control is called a worker-managed enterprise or a workplace democracy. Workplace democracies are a vital aspect of libertarian socialism. Workers in them have direct and equal say over aspects of their business. There are no managers, unless the workers decide they want them and then they are democratically 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, balance concerns for the natural world and people’s needs, (which are inextricably intertwined) and conduct all of their affairs democratically and efficiently, 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 socialism. As stated 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, and Marxism 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.
Anarchy simply means a system without rulers. The etymology of the word demonstrates that as its root Greek words are “an” and “arkhos”, which together mean “without ruler.” Anarchy does not have to mean the absence of government. But any form of anarchic government has to be directly democratic, (not representative) organized from the bottom up, and nonviolent with no legitimate monopoly on force. There can be no police; only informal community watch groups made up of members of the community who share the responsibilities among all capable equitably. 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 quite 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 prudent to do so. Collectivization cannot be forced on common people. However, the wealthiest, parasitical rulers must be forced by the people (not by state decree) to give up their power and ill-gotten resources by any means necessary.
Both state socialism and state communism do not work and can never work because rulers cannot be trusted to represent the interests of the workers or the 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 in a lecture, 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.”2 The definitions of the words communism, socialism, and anarchy have been changed by governments that claimed to adopt socialism and communism and by “capitalist” governments that wish to demonize the original concepts, thereby creating a great deal of confusion. But regardless of the preferred verbiage of the world’s rulers, the world and its economies are primarily dominated by crony capitalism.
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 states are so large it is nearly impossible to have removed 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,” ( page 136).
In one of his most well-known works, Statism and Anarchy, 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.”3
Bakunin’s foresight was unparalleled. 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 Smith, Adam: Chapter IV, p. 448, Wealth of Nations. 1776.
2 Chomsky, Noam: “Manufacturing Consent: The Political Economy of Human Rights Lecture and Q&A.” March 15, 1989. <Pdxjustice.org.> Lecture.
3 Mikhail Bakunin: Государственность и анархия or Statism And Anarchy in English (1873).