By Austin Garrido
Lately, it has become increasingly popular to accuse various controversial issues of being “socialist”. No doubt, this must have many thoughtful people asking questions like “What is socialism?”, “How exactly does it work?”, “How is socialism different from capitalism?”, and most importantly “How does socialism limit freedom?”. It is strange that many people fighting against socialism do not know the answer to these questions, and instead parrot small pieces of information they have gleaned from various sources. In order to fight for or against something, it is necessary to understand it. This booklet will answer all these questions in a concise and simple format. Our explanation begins with the capitalist icon: the corporation
A corporation is a person or group of people recognized as a separate legal entity and has similar rights to an individual, such as the right to own property. The purpose of a corporation is almost always to make money for the owner. To make the most money, a corporation determines the balance of cost and quality of services that will be the most successful in the marketplace. In most cases, like the production of a car or a toy, the decrease in quality is not significant, and makes the product more affordable- a cheap plastic dashboard, less articulation in a doll, a thinner coat of paint, etc. The corporation keeps the saved money.
If the government were a corporation, however, that same decrease in quality for would mean bad roads, inadequate water treatment, or underfunded public transportation. When a corporation seeks to make money through governing a country, the standard of living is the only “product” whose quality can be decreased. The owners of such a corporation are called dictators, and have complete control over the populous. A government where power is unquestionable and benefits only a few is called a dictatorship.
Democracy is the antidote to dictatorship. In Democracy, people vote on matters that affect themselves. The only motive in a democracy is for the betterment of the whole group- a majority of people would vote what is best for a majority of people. Everyone might not get their way, but at least most people do. In a large society, it is often more efficient to periodically elect representatives to deal with daily decisions. Democracy has shown to be the best method of governing a group, but as with all governing, there is a compromise.[1] Capitalism, however, is not democracy.
In capitalism, a corporation produces products, called commodities, to sell to the general public. With many different corporations producing commodities, the public decides which ones to purchase based on price and perceived usefulness, a process called “competition.” The companies that sell the most commodities stay in business, while the ones that don’t fail. In order to buy commodities in a capitalist marketplace, one must earn money. An amount of money corresponds to a given amount of labor, and is traded for a product or service that is worth (in labor) as much as the money represents. In a capitalist system, however, there is more than one way to accumulate money. Anybody can earn money by with labor, but those who already have money can use it as capital. Capital is an initial amount of money used to create more money. Capital could be used, for example, to buy a house, which could then be rented out. Any money made after recouping the initial cost of the capital (in this case, a house) is called profit, and is earned without any labor on the part of the owner. Even though the money gained can be used to buy labor, no labor was spent to obtain it- profit is money made from other money. Profit earnings do not contribute any new commodities to society, while simultaneously decreasing the amount of money available to other earners.
In any system, commodities only have value because labor was put into them. Something that is very useful, but requires no labor to acquire- like air- is not bought or sold. It is only when labor is put into changing or processing something that it becomes a commodity and has any value at all. The value of a commodity is determined not only by how much time is put into making it, but also the amount of training necessary to produce and reproduce that object. When a service is needed, rather than a physical commodity (such as a doctor or a plumber) the labor is paid for directly. In capitalism, the cost of labor is set according to local competition. In socialism, the cost of labor is agreed on democratically by a union of workers from that profession, and is based on the cost of required equipment, amount of education necessary, and the cost of sustaining the actual laborer.
Capital, such as a factory and raw materials, still needs labor to turn it into commodities. Since the added labor is the only thing that gives value to these new commodities, it is a necessary step toward earning profit. Laborers are paid a fixed regular amount called “wages” to turn the raw materials into commodities. A corporation’s success is gauged by how much money is left over after paying wages to its laborers. The owner of the corporation is the recipient of the “extra” money. Once enough money has been made to recoup the costs of the capital (the cost of the factory and raw materials), any additional money is profit. Since all the money is being made because of the labor of the workers, the profit is also being paid for by their labor. The motive under capitalism is to create the most profit, which is achieved by paying laborers the lowest possible wage that they will accept. No matter how high profits become for the owner, there is no incentive to increase the wages of the laborers.
In capitalism, a corporation is a dictatorship. Wages are set by the employer, as are schedules and benefits. The laborer has virtually no say in how his workplace is run, and does not receive a share of money proportional to his labor. The worker can choose to leave, but there is no guarantee of a job elsewhere and no income until one is found. Even if there is more work to be found, it is almost always within the same corporate system.
The profit made by the owners of corporations can be used as capital to create more profit. By repeating this cycle, individuals can accumulate a great deal of wealth without ever contributing any commodities to society. This wealth can be passed on through inheritance, leading to generations of families that contribute no labor, yet constantly accumulate wealth. Poor families do not have the ability to provide their children with the best education and healthcare, and the children are less successful because of it. The child of a rich family has no such obstacles, and is given good education and health, paving their way to success; it makes sense that poor families tend to produce poor children, and rich families tend to produce rich children. The inequality of income that large-scale capitalism creates in the United States is evident in the distribution of wealth: 10% of society possesses 80% of all wealth and the remaining 90% of society holds only 20% of all wealth. The amount of income inequality has been steadily increasing for many, many years.
Just as democracy is the solution to a dictatorship when dealing with governments, it also solves the problem of the dictatorship in corporations. In socialism, each laborer is paid not by wages, but by the fraction of profit earned from his labor. In a socialized workplace, all money gained is directly proportional to the labor supplied. The laborers themselves democratically decide on all issues that affect the company. Socialist companies are not called corporations, but co-operatives. In most socialist governments, competition between co-operatives still exists, and the market still decides which products are successful and which are not. The biggest difference between capitalism and socialism is in the structure of industry: capitalism separates the laborers from the commodities they produce, giving them no control over production, while socialism links and involves laborers with the commodities they produce, allowing them to have complete control over production. The laborers themselves are the owners. Using democracy, no minority of workers can make a decision that will benefit themselves at the expense of the other workers, such as layoffs or wage cuts.
Just as socialism grants people certain rights in the workplace, it also grants people certain inalienable rights for merely existing. These rights include the right to proper medical care, good education, food, housing, and a job. A person with these rights has an equal chance at success as any other person, no matter their background- success is based on merit, and not on inherited privilege. Socialism says that the child of a poor family should have access to the same quality of education as a child of a rich family, a sick rich man should not have a better chance of living than a sick poor man, and anybody who desires to work should be able to. Money should not determine the quality of these rights, because they are equally important and necessary for anyone to prosper. A small group of rich and educated people in generally poor and uneducated society is stifling to everyone. In a society were full of healthy and educated people, there would be less crime, and a greater flow of ideas between people and cultures.
In order anyone to prosper in a socialist society, they must work, and each person earns income based on their profession and amount of time worked. Most people are not content to live at subsistence level, and will contribute to society in some kind of labor in order to live the life they want. In any society, certain people choose not to contribute to society. Those who choose not to work can range from artists to homesteaders to vagabonds. All governments must deal with added expenditure of these non-producers, and even the United States currently socializes care for these people by providing free food and healthcare. If any of these people wished to change their lifestyle in a capitalist system, they must strive at low paying jobs to save enough to pay for proper education, food, and healthcare. It takes many years to earn these things, and they are many times unattainable. Most people become discouraged and revert, unwillingly, to the lifestyle of a non-producer. In a socialist society, these people would have the ability to change their status in life without any of the constraints of earning basic human needs such as food, housing, education costs, or healthcare. People’s chance at success depends on their own will and drive for their aspirations, and not on struggling to simply survive.
The easiest way to distribute these rights fairly is to collect an appropriate amount of money from everyone who can contribute, and then distributing it where and when it is needed. This distribution of funds is decided on democratically. The cost for each person in a socialized service is significantly less than the average cost per person in a pay-as-you-go system because of the added efficiency of having all finances handled by one interconnected entity, rather than a separate transaction for each. The “interconnected entity” is the socialist government, and it is effectively a democratic co-operative.
While capitalism offers freedom in the form of an unregulated market, it stifles individual freedom to do and work at what they wish. Socialism is the inverse, and regulates the market by requiring all business to be co-operative and transparent, and by treating basic human needs as a right, and not a privilege. Socialism offers full freedom to the individual, allowing everyone to pursue their most enjoyed profession, without fear of being exploited or risking their well-being.
This is the socialist position, and we believe that no one should be exploited for the benefit of others, and everybody has a right to better themselves and their situation. Nobody controls the situation they are born into, and therefore no one should be harmed or privileged by it. If we have the ability to give these rights to everyone, there is no reason that we should not. Access to life, liberty, and the pursuit of happiness should not have an admission price.
[1] The only escape from compromise in government is total anarchy, which inevitably leads exploitation and little actual freedom. More ordered government, usually not in favor of the majority, will eventually arise from any anarchistic situation, and is actually how human society arose in the first place.
