The “isms” of Economies and Government

Pretty nifty graphic there, eh? I figured with all the talk about “isms” and their misuses and abuses in the media, government, and the blogosphere,  I would cover them here.

If you don’t know what I’m talking about, they are capitalism, communism, fascism, marxism, and socialism. Please note, these are in alphabetical order - so as not to imply favoritism to any of these philosophies.  While everyone I have come across seems to understand the basic principles behind capitalism (whether they agree or disagree) the primary confusion seems to be between the other four.  There are some similarities, but they are distinct philosophies.

The “isms” will be presented in alphabetical order as well.  The way I will lay this out is to first give you the actual definition of the term and I will follow that up with a brief discussion regarding the origins and the individuals instrumental for advancing these philosophies.

I will give you fair warning - this is a fairly lengthy post.  However, it is well worth your time to read it.  I guarantee you will learn more about these “isms” than you ever thought you knew.  I guarantee you will have a clearer understanding of the “isms” and will be able to use them in a more scholarly manner and will have the tools necessary to correct those who only think they understand them.

Capitalism as defined by Merriam-Webster’s is:

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Usually, for those who study economics and are devout believers in capitalism, Milton Friedman, John Keynes, and Friedrich Hayek are the names that comes to mind. However, before I get in to them, you might be surprised to learn that capitalism actually has its origins in the middle-ages with Rome and the Middle-East. Up until the European Enlightenment period when the term “capitalism” was actually coined, the earliest form was called “mercantilism.” Mercantilism was defined as the distribution of goods in order to realize a profit.

It wasn’t until the 1300’s when Europeans were sailing the world for the purpose of expanding their mercantile practices that the term “capitalism” was finally developed and used as an economic philosophy.  It was during this period that capitalism became a way of thinking, so to speak.

Fast forward to the early 20th Century - enter John Maynard Keynes and Friedrich Hayek.  While both have firm roots in capitalism, each had their own ideas regarding the inner mechanisms that should drive capital, investments, money, and economic growth.  The entire premise behind capitalism is that markets should be free from any government and political influence in order to continue economic growth.  A true capitalist free-market system has no barriers to growth, ergo capitalist nations would continue to become wealthier.

The idea behind Keynesian economics is that in a capitalist system the private sector will make errors that lead to inefficiencies.  As such, Keynes advocated that government should step in to create public policy and the central bank should step in to create monetary policies.

Hayek took a libertarian stance on capitalism and the free-market.  He studied business and monetary cycles and was influential, and somewhat controversial at the time since Keynesian economics was all the rage, as his beliefs were essentially that any government interference in a capitalist society would lead to socialism and ultimately to totalitarianism.  His was a direct argument against Keynesian economic models.

Milton Friedman advanced the notion that, counter to Keynes,  monetarism should be the driving force behind economic policy in a capitalist society.  In short, by manipulating the money supply prices, inflation, and employment could be controlled, and if done correctly, reduce inflation, increase employment, and stabilize prices.

I encourage you to follow the links to read more on these three individuals as I have provided but a snippet.  These three individuals were the leading economists and philosophers of their time having been award Nobel prizes and Nobel Laureates.  Their works are more broad than what I have presented here.

Communism is defined as:

1 a: a theory advocating elimination of private property b: a system in which goods are owned in common and are available to all as needed.

2capitalized

a: a doctrine based on revolutionary Marxian socialism and Marxism-Leninism that was the official ideology of the Union of Soviet Socialist Republics.

b: a totalitarian system of government in which a single authoritarian party controls state-owned means of production

c: a final stage of society in Marxist theory in which the state has withered away and economic goods are distributed equitably.

d: communist systems collectively.

Communism - the evil of all evils! Right? Remember the slogans? “Better red than dead!” Well, when you look at the origins of communism, you wonder where it went astray as communism would almost make sense. If you look at the root word - commune - it would illicit a sense of community, harmony, friendship, symbiosis, etc. Communal property and symbiotic relationships are actually at the core of communism.

One of the earliest supporters of communism was Plato - the Greek philosopher. Communism also has roots in religion as well.  Under earlier forms of Judaism and Christianity, property ownership was considered evil because God created this earth for one and all.  There are many communes existing today in Israel - these are known as Kibutzim or Kibutzes.  However, communism at its earliest origins is completely different than modern communism.

Three key figures in modern communism are Francois Babeuf, Karl Marx, and Friedrich Engels.  Their actions, activities, and philosophy are at the very heart of modern-day communism.

Francois Babeuf, a political journalist, wrote Manifesto of the Equals in 1796 and was one of the key supporters and organizers within the French Revolution.  His manifesto supported an egalitarian system of where all property and labor were shared equally.  He formed an underground society in hopes to overthrow the government citing the original revolution did not go far enough.  The earliest form of communism was actually “Babouvism.”

Karl Marx - a German philosopher considered the father of communism and socialism. Marx, along with Engels, wrote The Communist Manifesto in 1848 (considered the founding documents of Communism similar to the American Constitution) which elevated the working class through equal distribution of productivity and equal share of property.  He is most quoted as stating “From each his own according to his own ability to each according to his needs.”  This is the basis for wealth redistribution.  His manifesto was a direct attack on capitalism and the Bourgeois upper class.

If you read the manifesto it sounds like a great idea.  However, since he never outlined a plan as to the structure and mechanisms for living in a communist society, I don’t think he could ever have imagined that the ideas put forth in his manifesto would be developed in to an authoritarian system where the political elite enslaved the working class.  The modern communist systems are the complete opposite of what he proposed.  His philosophy was about removing the class system altogether where all men were truly equal.

Friedrich Engels - another German philosopher - was the co-author with Marx on the Communist Manifesto.  He met Marx when he moved to Paris.  As with Marx, he too was a strong supporter of the working class and was determined to abolish the class system.  He was responsible for the editing the 2nd and 3rd editions of the Communist Manifesto after Marx died.  It was Engels who actually furthered the theory of Marxism.  Interestingly, Engels came from an upper-class family of textile owners.  In fact, he owned his own cotton textile business.  Even while collaborating with Marx - he continued to profit from his business and used this profits to finance Marx.

Engels was the founder of the Communist League in 1847 - a year before the manifesto was written. Both Marx and Engels believed that revolution was necessary in order to bring about an egalitarian order and often help to organize such revolutions with the working class.  Essentially, if it weren’t for Engels, the Marxist form of socialism and communism would never have advanced.

Fascism is defined as:

1often capitalized : a political philosophy, movement, or regime (as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition.

2: a tendency toward or actual exercise of strong autocratic or dictatorial control.

There are three key individuals involved in the advancement of fascism, Benito Mussolini,  Adolf Hitler, and Franklin Delano Roosevelt (FDR).  Fascism actually has its origins in both socialism and capitalism and is considered contrary to communism. Fascism is the state control over private industry where the productivity of the working class is for the benefit of the state.  The state provides for the working class in exchange for their labor by way of a minimum wage, socialized health care, labor unions, and forced retirement.  The Fascist ideology was the first to implement a progressive tax on capital.

Bernito Mussolini is actually responsible for the development and initial advancement of the modern-day form of fascism as a result of his Manifesto Fascismo (written in 1919) or as it was originally titled The Manifesto of the Fascist Struggle. Mussolini was actually a member of the socialist party at the time he came to power in 1922.  He removed himself from the Socialist Party and took control over all forms of industry, churches and church property, and the monetary system.  Under his authority, Italy came under military rule where Mussolini took over as a dictator.  While it appeared that a market based economy was still in place, the state dictated what and how much businesses would produce and the state set the prices.

Fascism is also akin to corporatism in which government representation was based on trade and industry.  Cartels are set up under a fascist system and each cartel had representation in the government.  It is because of this that some people, still today, associate capitalists as fascists.  Under fascism, there are no capitalists.  The misconception is that fascism is the corporate control of government when it fact it is the complete opposite.

Adolf Hitler - I think we all know exactly what Hitler did.  I think it also well known that Hitler and Mussolini were great allies.  However, in 1933 Hitler adopted the Fascist ideology of Mussolini and took control of all private industry in Germany.

The state should retain supervision and each property owner should consider himself appointed by the state. It is his duty not to use his property against the interests of others among his own people. This is the crucial matter. The Third Reich will always retain its right to control the owners of property.

Essentially, Hitler did away with all small businesses and corporations and instituted mandatory membership in cartels that were overseen by the Nazi Party Labor Front board. As a result, there was a mandatory 2-year labor conscription for the good of the fatherland - which ultimately led to national conscription in to one of the many military components.

FDR was an admirer of Mussolini - so much so that he publicly praised Mussolini for his “honest purpose of restoring Italy.” FDR also stated that he kept in close contact with Mussolini on a regular basis. In fact, many of the elements of the New Deal were directly based on a fascist system of economics:  Social Security, Medicare, progressive taxes on capital, state control of private industry.  Here are a few quotes that clearly, when compared to the definitions and origins of fascism, show he was a proponent of these ideas:

Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.

I do not believe in communism any more than you do, but there is nothing wrong with the communists in this country. Several of the best friends I have are Communists.

A man who has never gone to school may steal from a freight car, but if he has a university education he may steal the whole railroad.

FDR instituted anti-competition policies and enforced pro-labor/union policies in to the economic model that helped drag out the Great Depression for as long as seven years. While FDR did not become an actual dictator as our Constitution would actually have prevented that from happening, he nevertheless instituted several fascist based policies under his Presidency. He was able to wrest control from private industries through the National Industrial Recovery Act (NIRA). Essentially, he forced businesses to unionize or be threatened with government initiated anti-trust lawsuits.  By 1934 80% of non-agricultural private businesses were unionized.  As a result of these union businesses, wages increased 25%  and the costs of consumer goods increased by 23% - making them unaffordable for average Americans during the economic downturn.

If you really want to get an idea of his approval and acceptance of socialism and fascism, and his antipathy towards capitalism, you only need to read or listen to his inaugural address.  It sounds very familiar doesn’t it?

Marxism is defined as:

The political, economic, and social principles and policies advocated by Marx ; especially : a theory and practice of socialism including the labor theory of value, dialectical materialism, the class struggle, and dictatorship of the proletariat until the establishment of a classless society.

I guess I probably don’t need to go in to the origins and details of Marxism again seeing as how it is a doctrine directly named after Karl Marx that was discussed above. However, what I will add that one of the main premises regarding Marxism is that revolution is considered a necessary element for the institution of Marxism in a capitalist system.
Socialism is defined as:

1: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.

2 a: a system of society or group living in which there is no private property.

b: a system or condition of society in which the means of production are owned and controlled by the state.

3: a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done.

Socialism was borne from the French Revolution and the Industrial Revolution in which the working class (the Proletariat) formed an uprising against the industrial elite (the Bourgeios). However, it was half a century later when the actual term “socialism” was beginning to widely become accepted. Based on my research the term has been attributed to several individuals: Pierre Leroux, Marie Rouch Louis Reybald, and/or Robert Owen. Exactly who is still under discussion.

The individuals most associated with the socialist movement are comte de Saint Simon, Robert Owen, and Pierre-Joseph Proudon. (I bet you thought Marx was included here!) Actually, Marx just furthered the cause of socialism and further defined socialism as the step between capitalism and communism.

comte de Saint Simon - or more formerly known as Claude Henri de Rouvroy - is considered to be the father of French socialism.  He was a philosopher and socialist utopian.  Saint Simon was actually Marx’s inspiration.  In Saint Simon’s vision of a socialist utopia he saw a “new christianity” where all traditional religions were abolished in favor of philosophers, scientists, and engineers.  In his socialist utopia, production and labor were controlled by the scientists with the purpose of producing those things that wre useful in life. Interestly, Saint Simon was another of the Bourgeois elite, as with Engels.  However, he died a poor man.

Because of Saint Simon’s views on socialism and science it was he who actually is responsible for today’s social sciences.  He had hoped to elevate the study of society to that of natural and traditional sciences.

Robert Owen was another of the industrial elite/business owners turned social utopian. However, his business model for operating his textile factory was based on social engineering.  He created a town around his business (New Lanark) where all members contributed equally in the production of his business and all of his employees were taken care of.

He attempted to create several of these communities, or what he called, Villages of Cooperation.  However, there was no democratic input in to the operations of the business by his employees. When his social experiment did not succeed in Britain, he moved to the United States.  His own brand of socialism “Owenism” became widely known in the U.S..  In 1819 he started one of his Villages of Cooperation and called it New Harmony in Indiana.  There were about ten of these communities throughout the U.S.  However, these social experiments also failed as American workers were used to having democratic input and did not appreciate his authoritarian style.

Pierre-Joseph Proudhon - considered a socialist anarchist. His view on property ownership was that it was theft.  He believed in the advancement of communitarianism (not communism) and equal division of labor and property among the community to include a democratic form of authority.  He wanted to see the “state” abolished as well.  One could say that Proudhon was a very pure socialist.  Proudhon eventually surpassed Marx as one of the leading left thinking intellectuals and was inspiration to many of the notorious anarchists (Tolstoy, Bakunin, etc.).

Two poignant quotes from Proudhon pretty much sums up his philosphy:

labour alone is the basis of value, but that this nevertheless does not give the labourer a right to property, since his labour does not create the material out of which the product is made. ‘The right to products is exclusive; the right to means is common’.”

and

“The right to life implies a right to the means of life, and that rule of justice which demands respect for the life of an innocent man also demands that he not be deprived of the means of life: these two rights are equally sacred…To prevent the labour of another is the same sort of injustice as putting him in chains or throwing him into prison, and it provokes the same resentment.”

You will note that each of these three figures were at one time followers of Christianity.  Over time, as they accepted socialism, they abolished God from their lives as well. For them, organized religion was just as much a chain shackling man as was industry.

So, there you have it.  I have laid out the “isms” as best as possible in hopes of clarifying the philosophies and the individuals that helped to advance them.  I hope you have a better understanding of this knowledge and will use it wisely!  I highly encourage you to follow the links throughout this post to get a better understanding yourselves.  There is a wealth of information out there beyond what I have provided in this discussion.

Bob O

No related posts.

Like this post? Subscribe to my RSS feed and get loads more!