Real world examples of capitalism/socialism

AlpinLuke

Ad Honoris
Oct 2011
25,880
Italy, Lago Maggiore
#31
So you don't consider Adam Smith's "The Wealth of Nations" from the 1770s to be the Bible of Capitalism? I know he wasn't the first to express many those ideas. Plato was familiar with lending money at interest and was opposed to it. Jesus in the Parable of the Talents said that wealth was to be invested and circulated so that all of society could benefit from it. Hoarding money was therefore a sin. Ancient and Medieval merchants understood the Law of Supply and Demand and frequently tried to raise prices by restricting the supply of certain goods. I once read a piece of Early Medieval hagiography that described a merchant as buying what was common (and cheap) at one place and transporting it someplace else where that good was scarce (and expensive). Capitalism has been described as the natural economy since it only systematizes what people do anyway.
Adam Smith was a thinker who was observing something in development more than a thinker who was inventing a "solution" to a global problem [actually Marx was analyzing the capitalist systems individuating the problems, in his own perspective, suggesting a possible solution, technically he didn't invent Communism ... someone else did]. When we say that he was the father of "modern capitalism" we imply that he didn't invent it ... he suggested how to optimize what existed and what was going to come after him [industrial capitalism came well later and it wasn't a product fo Smith's thought].

When I say that "capitalism" is a word describing a natural development of some economic systems, I could make several nice examples, but probably my avatar can make us think to Templars.

What did they do for capitalism? They introduced, in large scale, the conception of substitute of capital, a banknote. They weren't the first ones, but they used that "tool" during the crusades. A crusader deposited money c/o a temple in Europe and the local Templars gave him a note, a paper with codes saying that he had deposited a sum of money. The crusader reached the Holy Land and he showed that note to the Templars there. They gave him money, according to what was written on the piece of paper.

This is the principal of the circulation of banknotes: a banknote is a piece of paper representing a value [once it was connected to gold, or an other valuable metal, today to the public debt of a country which issues money].

It was XIII century CE.
 

tomar

Ad Honoris
Jan 2011
13,224
#32
Here's the definition of capitalism that I'm kinda working with in my head: "an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."

By that definition, I think the kid selling lemonade on the corner fits just fine as an example.

And again, using the above definition (unless you've got a different one?) capitalism must be one of the oldest concepts in human history; how or what predates it? When was capitalism "invented?"
one problem with the above definition is that it implies that the US is not capitalist....in the US the state decides who you can trade with (e.g. not Iran), what you can trade (e.g. not Huawei) and on what conditions
 
Apr 2018
951
Upland, Sweden
#33
one problem with the above definition is that it implies that the US is not capitalist....in the US the state decides who you can trade with (e.g. not Iran), what you can trade (e.g. not Huawei) and on what conditions
Is there any fully capitalist country? Has there ever been...

I think many would agree that the free market is an ideal (in the Weberian sense) rather than an actual state of being. In practice "capitalism" must be a relative term - the alternative definition (that capitalism exists if there is free ownership of capital - i.e. not the Soviet Union) is not very useful from a modern perspective, even though it might be "more true"
 
Likes: Menshevik
Apr 2018
951
Upland, Sweden
#34
Technically, not existing a general free private property of the soil [private firms have been recorded], we can say that KmT [Ancient Egypt] looked Socialist as for mass base production. The difference is that there was an absolute private property: the entire country and the population were, de facto, property of the Monarch [who acted as a divine Horo]. The Horo conceded a little private property [some animals and something else ... gifts, rewards] to the common population, but nobles and high officers had estates [and they produced wine, beer, honey, timber ..].

We could say that the country was "oddly socialist", in fact there was a limited high class with real private properties [even if I cannot exclude they thought that their properties were temporary concessions of the Horo].

Not only this, commerce was free [the international trade was substantially run by the Monarch and his representatives, but internal trade existed with real city markets to sell and buy].
This is very interesting - thank you for the clarification! Ha, and absolute private property indeed... Karl Marx probably wouldn't have approved, and it certainly wasn't very egalitarian.

What I found very interesting about ancient Egypt is the fact that a country with such a system (correct me if I am wrong, but didn't the system you describe - I was vaguely aware of something like what you describe - more or less continue into Ptolemaian and even Roman times, with only the etiquettes of the rulers being changed?) could be so wealthy, comparatively speaking. It seems to say imply more than a little about the relative economic importance of primary produce, specifically agricultural produce, in pre-modern times...
 

Ichon

Ad Honorem
Mar 2013
3,531
#35
Are you saying that public airways, mineral leases, water catchment rights, grazing leases, tollways, etc are owned by society but not managed by the state? Because I think that all of those usually are managed by the state, and I'm asking for something that is not managed by the state.
I guess it depends on what you mean by 'managed' as I took the question as if the state managed it directly which would happen in some theoretical socialist state as opposed to organizing the lease/sale of public goods but leaving actual management to private corporations as it occurs in most economies currently?

Tollways might come the closest whereby the state can't raise the funds to fully pay for some infrastructure that benefits society in the long run but is built and paid for by private interests who also make a profit and most of the paying traffic is also commercial rather than individual citizens whose main benefit is they gain access to cheaper movement of goods that a profit is made on selling to people who presumably can use some of the savings gained in further investments and improving the economy and essentially a state's citizens quality of life or something like that.
 

Chlodio

Ad Honorem
Aug 2016
3,813
Dispargum
#36
I guess it depends on what you mean by 'managed' as I took the question as if the state managed it directly which would happen in some theoretical socialist state as opposed to organizing the lease/sale of public goods but leaving actual management to private corporations as it occurs in most economies currently?

Tollways might come the closest whereby the state can't raise the funds to fully pay for some infrastructure that benefits society in the long run but is built and paid for by private interests who also make a profit and most of the paying traffic is also commercial rather than individual citizens whose main benefit is they gain access to cheaper movement of goods that a profit is made on selling to people who presumably can use some of the savings gained in further investments and improving the economy and essentially a state's citizens quality of life or something like that.
Interesting. The way you describe tollways I would call a public-private partnership where part of the money to build the road comes from tax dollars while the rest comes from private investors who recover their investment by charging tolls to anyone who drives on the road. If the road was paid for entirely by private investors, I would call it outsourcing of a traditional governmental function. Neither public-private partnerships nor outsourcing are inherently capitalistic nor socialistic. That's just the way some governments choose to operate.

The original distinction was between state capitalism and state socialism. I understand state capitalism to be when the means of production are privately owned but the state heavily regulates the economy. For instance, the state might set production quotas to avoid surplus production thereby maintaining artificially high prices. Under socialism the means of produciton are owned or managed by the government. Whether the means of production are owned by the government or owned by the people and managed by the government is a distinction I don't see the point to making. If the government is making all of the decisions, it's socialism, not free enterprise or capitalism.

I suppose another distinction can be that capitalism is all about the pursuit of profit while socialism usually operates on a non-profit basis.

I don't think we need to bring up crony capitalism as another way that governments and private companies can cooperate in the economy.
 

Ichon

Ad Honorem
Mar 2013
3,531
#37
e.
If the government is making all of the decisions, it's socialism, not free enterprise or capitalism.

I suppose another distinction can be that capitalism is all about the pursuit of profit while socialism usually operates on a non-profit basis.

I don't think we need to bring up crony capitalism as another way that governments and private companies can cooperate in the economy.
What would be socialized healthcare where the government owns the hospitals and pays the doctors and other staff and maintains most of the pure research institutions but private companies contract with the government to provide most of the equipment and service the hospitals and research centers rely upon to operate?

The distinction between full communism and full socialism seems very hazy and it seems you agree that the difference between the government representing 'the people' and owning the meanings of production and paying wages vs 'the people' owning the means of production and having a governmental system that manages that production and where workers are paid in some form of credits or an amount of goods that barely exceed basic sustenance.

In the first instance, it would be considered socialism and some workers might earn more than other theoretically if they worker harder/longer or gain skills deemed more valuable by the government even if it was a simple multiple of years of training required to do a job say for every year of training a +5% multiplier of base income so a doctor with 10 years of training would earn 150% of the base income once they have worked as long as their (government paid) training took which ignores the fast of output once training is completed and of course the incentives to extend training times to multiple years to gain higher income.

For the communistic approach, workers would always earn the same amount no matter how hard they worked- though really the theory says according to ability and means- who judges that is inherently biased and so it was necessary to pretend all earned the same to ensure a patina of fairness for the system. That approach is flawed from the beginning and doomed to failure but theoretically, if there were an unbiased arbiter such as an advanced AI that could judge relative production capability vs actual output and this system was trusted by most of the people many of the flaws would be minimized though ways to game the system or simply working outside the system in some black market would still exist.
 

Chlodio

Ad Honorem
Aug 2016
3,813
Dispargum
#38
e.

What would be socialized healthcare where the government owns the hospitals and pays the doctors and other staff and maintains most of the pure research institutions but private companies contract with the government to provide most of the equipment and service the hospitals and research centers rely upon to operate?

The distinction between full communism and full socialism seems very hazy and it seems you agree that the difference between the government representing 'the people' and owning the meanings of production and paying wages vs 'the people' owning the means of production and having a governmental system that manages that production and where workers are paid in some form of credits or an amount of goods that barely exceed basic sustenance.

In the first instance, it would be considered socialism and some workers might earn more than other theoretically if they worker harder/longer or gain skills deemed more valuable by the government even if it was a simple multiple of years of training required to do a job say for every year of training a +5% multiplier of base income so a doctor with 10 years of training would earn 150% of the base income once they have worked as long as their (government paid) training took which ignores the fast of output once training is completed and of course the incentives to extend training times to multiple years to gain higher income.

For the communistic approach, workers would always earn the same amount no matter how hard they worked- though really the theory says according to ability and means- who judges that is inherently biased and so it was necessary to pretend all earned the same to ensure a patina of fairness for the system. That approach is flawed from the beginning and doomed to failure but theoretically, if there were an unbiased arbiter such as an advanced AI that could judge relative production capability vs actual output and this system was trusted by most of the people many of the flaws would be minimized though ways to game the system or simply working outside the system in some black market would still exist.
Yes, if hospitals were owned and operated by the government and doctors and nurses were civil servants that would be socialized medicine, a characteristic of a socialist government and a socialist economy, especially if medical supplies and equipment were sold to the hospitals by private companies. If there were no private companies and medical supplies and equipment were provided by government owned firms or agencies, that would be Communism.

Even the most Communist of countries used money. I don't think anyone has been paid in credits or goods in very long time. Money is just too convient.

Even the most Communist of countries recognized that highly trained professionals had to enjoy a better life than factory or agricultural workers. No one would bother going to school for all of those years if there wasn't some kind of tangible reward. If Soviet or Chinese doctors enjoyed a lower standard of living than their western counterparts it was because the Soviet Union and China were poorer countries than the US and Western Europe. It wasn't because Soviet doctors were paid less by a Communist system than their European counterparts in a socialist system. I could be wrong but I never heard of the Soviets having a shortage of doctors because the doctors were paid too little. If there was a shortage of doctors it probably had more to do with a shortage of medical school admissions. The only fault I can blame on a compensation system is if it doesn't incentivize enough people to want to go to medical school (or any other useful and necessary work).

I don't know how different Britain's National Health Service works from healthcare in the Soviet Union or China aside from the cultural differences. Britain enjoying a higher per capita GDP, I assume healthcare in Britain was better than in the Soviet Union because Britain could afford to be better. The differences probably had little to do with Britain being socialist while the Soviet Union was Communist. I'll let someone more familiar with Britain's NHS and Soviet healthcare comment any further.
 

Naomasa298

Forum Staff
Apr 2010
33,058
T'Republic of Yorkshire
#39
Even there I suspect there has to be someone who can decide who has access to the water and who does not, what the water can be used for and what it can't be used for.
I would have thought that the management of communal resources like this would have been done by consensus, rather than by a village authority or a well master.
 

Tulius

Ad Honorem
May 2016
5,369
Portugal
#40
The differences probably had little to do with Britain being socialist while the Soviet Union was Communist.
Chlodio, you say that the Soviet Union (Union of Soviet Socialist Republics) was communist and Britain (UK, a monarchy) was socialist.

Can you give me working definitions of those two concepts? I think that there are here some conceptual differences from the ones that I am used.

I would have thought that the management of communal resources like this would have been done by consensus, rather than by a village authority or a well master.
Agreed, I think that is part of the concept. If the communal resources aren’t managed by the community than the resources are not communal.
 

Similar History Discussions