Capitalism vs. Socialism
Beyond this debate are better possibilities
Note: This is the first essay in an ongoing series.
In the Looney Tunes cartoon series, there’s a skit between Bugs Bunny and Daffy Duck about tricking Elmer Fudd, a gullible hunter, into shooting the opposing character.
Within the confines of the skit, it’s either rabbit or duck hunting season, and Bugs and Daffy deploy various forms of trickery to win the debate at the expense of the other. As a comedy for young children, it’s clearly a silly debate.1
Capitalism vs. socialism is also a silly debate, but it’s long been a significant source of division in the United States.
When Gallup polled Americans about whether they had a positive or negative image of capitalism and socialism, the results revealed that most of the population was biased towards one ideology or the other. For “capitalism,” 60% declared a positive view, 35% declared a negative view, and just 4% were undecided. For “socialism,” 39% declared a positive view, 57% declared a negative view, and just 3% were undecided.
Those identifying as capitalists tend to emphasize the benefits of private ownership, enterprises, and free markets.
Its proponents cite several economic theories and observable examples to argue that capitalism fosters the most dynamic, productive, and efficient means of commerce.
Capitalism is deeply present in Americans’ everyday lives. Some of the everyday functions of capitalism include:2
the food industry supplying competing groceries with plentiful, reliable, affordable fresh produce and durable processed foods.
the pharmaceutical industry producing life-saving, life-extending, and life-enhancing medications ranging from patent-generating innovators to affordable generic and over-the-counter producers.
the manufacturing industry producing affordable and reliable necessities for homes, businesses, schools, and healthcare facilities (e.g., heating & cooling, lighting, plumbing, flooring, furniture, etc.).
the financial industry serving a broad spectrum of accounting, banking, lending, insurance, investing, and payment processing needs.
the technology industry developing solutions like Google’s search engine, Amazon’s shopping platform, Apple’s devices, Netflix’s streaming entertainment platform, Zoom’s video conference platform, Tesla’s electric vehicles and batteries, and the emerging applications for artificial intelligence, autonomous driving, robotics, 3D printing, and digital currencies.
The capitalist economy is also a primary source of national employment and income.
Those identifying as socialists tend to emphasize the benefits of collective action towards societal priorities, regulations in the economy, and the equitable distribution of wealth for social wellbeing.
Like capitalism, socialism is also deeply present in Americans’ lives. Everyday examples here include the administration of:
freshwater, sewage treatment, storm drains, floodwalls, and other environmental management systems.
roadways, bridges, tunnels, railways, airports, seaports, and mass transportation systems.
public education systems and services.
public healthcare information and services.
national defense, homeland security, criminal justice, public safety, and firefighting services.
social safety net systems and services.
democratic systems for appointing public officials.
regulatory standards that ensure the quality of public services.
regulatory controls that protect public interests from private sector exploitation.
Cumulatively, this leads to the point that capitalism and socialism are complementary in the function of the American economy.3
Private farmers rely on subsidies, safety nets, and other resources from the U.S. Department of Agriculture.
The National Institutes of Health (NIH) invests over $32 billion a year in biomedical research. That research, in part, results in exclusive patents granted by the U.S Patent and Trademark Office to private pharmaceutical companies.
The first Covid-19 relief bill allocated public funding totaling $525 billion to large businesses, $75 billion specifically to the airline industry, and $600 billion to small businesses.
The financial industry benefits from FDIC insurance, the Federal Reserve Bank and was bailed out in the 2008 financial crisis.
DARPA, an R&D agency of the U.S Department of Defense, is credited at least partially with the inventions of the Internet, GPS, voice interfaces, personal computers, and the Moderna Covid-19 vaccine
Cryptocurrencies are the product of the Internet, the development of computers, and a rich public sector legacy in its development (e.g., computer science, electrical engineering, mathematics, economics, and physics).
Amazon.com wouldn’t have a viable business model without the Internet, the U.S. Postal Service, and vast public road and highway networks.
As a startup, Tesla received a $465 million loan from the Department of Energy.
Public institutions set and officiate the laws, regulations, rights, and incentives of the free market economy.
Since the private and public sectors are complementary systems in the overall economy, a more holistic debate is needed to improve the trajectory of society.
Better Possibilities
Although Bugs and Daffy share a common interest to avoid getting shot in the Looney Tunes cartoon, they ensure a losing fate by working against each other. But when they collaborate towards achieving their common purpose, a clever possibility emerges:
If the circumstances of these cartoons were more realistic, we could seek a different animal for Elmer to hunt or a different land for him to hunt on. We may also consider others ways to satisfy Elmer’s hunger and hobby, opening up a realm of possibilities for alternative food sources and shooting activities.
Using this method to evolve our economic systems is a more complex, but feasible task. A starting point is to unsubscribe from the most polarizing and unconstructive narratives in the media, on social networks, and in political affiliations.
A step beyond the debates that divide us is a step towards the possibilities that unite us.
Published July 21, 2021 (1.0)
Updated August 5, 2023 (1.51)
Additional notes
Below are examples from opposing sides of the capitalism vs. socialism debate:
Anthony Pompliano is a leading cryptocurrency influencer.
The Democratic Socialists of America are a leading socialist organization.
U.S Congresswoman Marjorie Taylor Greene demonizes a democratic legislative proposal about climate change with an authoritarian communist symbol (source).
Here are references to the definitions of capitalism and socialism in the Merriam-Webster dictionary. As complex ideas, these definitions vary slightly across sources.
You can watch the Looney Tunes skit on YouTube.
Noteworthy omissions to the capitalism examples are the energy, utility, and Internet/cable industries, which also serve essential functions in society.
It’s beyond the scope of this essay to imply value judgments on these examples. Most are attributable to a diverse array of both positive and negative consequences. Thus, history is an important context for evolving systems, institutions, and traditions.