Capitalism or Socialism?
We turn now to a discussion of trends in the social and economic field. It has become almost a habit to refer to our times as a period of crisis or transition. Prisoners or social and economic dramatically predict great changes in the entire structure of our society. An English economist has recently summed up the situation in this way: "It is pretty obvious that we are standing today at the turning-point between two civilizations, one of those burning-point in history not unlike the first or second century, the Renaissance, or the 17th century in England. The transition from an individual to a collective state of society is as hard." (CHRISTIANITY AND SOCIAL REVOLUTION, page 177, Quoted from "The World Today" page 35.)
Mrs. Lindberg has written a book entitled "The Wave of the Future," and in an article in the "Atlantic Monthly" June 1941, page 682, she explains her basic thesis in these words: "It is, as I see it, A middle movement of adjustment to a highly scientific, mechanized, and material era of civilization, with all its attendant complications and as such it seems to me inevitable. I feel we must 'guide' the Wave of the Future. Granted; if we lose exact literary truth, we don't mean 'by-ing down prospects on the beach and letting it pound you into the sand. Quite the opposite. It means meeting it with all the energy and controlling it with all the powers they are forced upon us by cataclysms and violence. What great changes are coming seems to be inevitable; the question is: can we meet them with or without war, with our without the dictators, for we have set these changes in motion ourselves."
Whether we have arrived at an actual turning-point between two entirely different civilizations at the present time remains to be seen. Certain it is that great changes are in the offing.
Now if we ask ourselves what is the trend today, there can be no doubt that it may be characterized as a movement away from capitalism--as our present system is called--towards some kind of socialism or collectivism. This does not mean that capitalism is definitely on the way out and that Hitler this war it will disappear altogether. It may be that the present trend will be reversed and that some modified form of capitalism will emerge to take its place; for changes come slowly and there is seldom if ever an abrupt break with the past.
However, to understand all this it is necessary that we first of all get a clearer idea of what capitalism really is and what distinguishes it from other systems. Capitalism is most easily defined. That is in part due to the word itself, which can be used in different ways. Then we hear the word capital we think of in the sense only. Actually, any fund of wealth is capital. When we speak of the capital wealth of Canada we mean everything of value in our country. Whatever you possess is your capital, even the clothes on your back. In the business world the term is usually employed to refer to the stock of wealth within the form. Whatever is carried on. Thus in the case of a manufacturing concern its capital, buildings, trucks, and everything else the company owns in the process of production. That we actually use in our daily lives, such as food, clothing, living quarters, pleasure cars and the like may be called consumer's capital. Besides this economists also speak of land capital which refers to natural wealth. All natural resources and our great land acreage would come into this category.
From this it will be seen that the term "capitalism" is very inapt, for in any kind of system today, these three kinds of capital would exist. To say that "capitalism" is a system in which "capital" plays an important role is beside the mark. There always has been and there always will be land capital, instrumental capital and consumer's capital.
The unabridged dictionary defines capitalism as a "system that favors the concentration of capital in the hands of the few." Others describe it as a set-up that is based upon the profit motive. And still others claim it is an economic machine that makes rich people richer and the poor poorer.
While there is some truth in these statements none of them really explains the true nature of capitalism and what distinguishes it from other economic systems. Probably the most satisfactory way we can understand this best if we contrast capitalism with socialism. Under socialism a larger group, almost invariably the state, owns or controls capital, particularly the means of production. Under capitalism ownership of capital and enterprise is scattered among --individual and groups of individuals. Almost all land, factories, railroads, mines, stores, houses, clothing, food and so on, are today privately owned. Of course, there is some common property even now, such as roads, parks, railroads, waterworks, etc., but that is a very small part of the total wealth of the country. The present system of ownership carried with it the right to use that property as one sees fit, to dispose of it by sale or gift, and to prevent the use of it by others. Control extends even after the death of the owner, who may will decree what shall be done with it; and the law will see to it that his wishes are carried out. These rights are not absolute, and may be restricted if exercised in a manner injurious to other members of society. For instance, if a man maintains a public nuisance on his property or within wide limits, he can dispose of his property as he wills. (Bye: "Principles of Economics" page 492.)
2) Furthermore, as long as the institution of private property exists it implies that there will be freedom of enterprise. This is in a large measure what the framers of our American constitution had in mind when they spoke of "liberty" and the "pursuits of happiness." Each individual should be free to engage in any kind of work or line of production he sees fit. He may produce or manufacture goods if he sees fit. He may work either the goods privately, manufacture or as a workman. There is no higher power which says what he must do or what he must produce. Again this privilege is not absolute, but by and large a person is free to engage in any kind of enterprise he cares to.
3) That simply means that a person is left to follow the dictates of self interest. The thing that will guide him in the choice of his occupation will be the market value of his labor or his line of production. He will not continue to work for nothing if he can make things an employer will be content to close down. Due to this situation our system has also been called the "profit system" or the "price system."
4) Closely allied with this is the idea of profit. A person engages in this or that type of production because it brings him a profit. If he does not make more than his expenses he will be forced to close down. Due to this situation our system has also been called the "profit system."
5) Another natural accompaniment of private property and free enterprise is competition. Anyone who wants ploughs will try to sell him implements because he hopes to make a profit therefrom. Those to rightly understand this best if we contrast capitalism with socialism. Under socialism the market value of his labor or his line of production. He will not continue to work for nothing if he can make things that others want to buy, so will stop producing hat-pins if the ladies quit wearing them because there will be no market for his product and the price will keep so low that he cannot sell it at a profit. It will be to the thing that makes