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    Chapter 1: Introduction

    By Punkerslut

    Start Date: April 28, 2002
    Finish Date: June 25, 2002

    "The operation of government is restricted to the making and the administering of laws; but it is to a nation that the right of forming or reforming, generating or regenerating constitutions and governments belong." -- Thomas Paine, The Rights of Man, Part II, Preface.

    Section I: Introduction

         The idea of economy and what it means to us has been changing throughout centuries, but was largely awakened and revitalized with new thoughts and new ideas from Karl Marx and his famous essay, The Communist Manifesto, written in 1848 with Friedrick Engels. This is something that even the Capitalists will admit to -- the large effect of Marxism in Western and Eastern thought. Soon enough, only decades after writing the Manifesto, several nations adopted the policy of Communism. I cannot adhere to Communism, though, nor am I a Communist. It was from Marx, however, and from his ideas that arose the new belief that property does not have to be, or should not be, private. There have been dissertations previously, though, where men and women advocated property to be publicly owned, or partly publicly owned. There are stories of Giordano Bruno dividing his property with the poor. [By Anonymous, at www.infidels.org.] Even beyond the story of Bruno giving his wealth to the poor, there are numerous events before and after that indicated a sort of Socialist sentiment in individuals. To quote Peter Kropotkin...

    ONE of the current objections to Communism and Socialism altogether, is that the idea is so old, and yet it could never be realized. Schemes of ideal States haunted the thinkers of Ancient Greece; later on, the early Christians joined in communist groups; centuries later, large communist brotherhoods came into existence during the Reform movement. Then, the same ideals were revived during the great English and French Revolutions; and finally, quite lately, in 1848, a revolution, inspired to a great extent with Socialist ideals, took place in France. "And yet, you see," we are told, "how far away is still the realization of your schemes. Don't you think that there is some fundamental error in your understanding of human nature and its needs?" [The Conquest of Bread, chapter 1.]

         Thomas More's book Utopia was a criticism of many social problems. One of the targets of More's work was Capitalism. To quote a book on economics...

    The first and perhaps best book on social reform was written by Sir Thomas More (1478-1535), the famous English statesman under Henry VIII, as well as saint and martyr in the Roman Catholic Church. More's great satirical classic, Utopia (which is often required reading in English literature courses), was an attack on the evils of poverty, waste, idleness, and the institution of private property. The last, of course, is fundamental to capitalism. More was critical of conditions in England and certain other European states during the early sixteenth century. As a solution, he proposed creation of a "utopia"--an ideal city-state (somewhat similar to Plato's Republic). In this society everyone would be happily employed, there would be ample opportunity for cultural enrichment, and democracy would prevail, with all citizens working for the good of society. [Contemporary Macroeconomics, by Milton H. Spencer, Worth Publishers, Inc., Fourth Edition, page 386.]

         It was from Marx that an economic view of history was truly established. Just as Adam Smith had defined Capitalism, so had Marx defined Communism. Even though the followers of both thinkers would eventually come to stray from their theories, both thinkers were monumentally important in developing the thoughts on economics and justice that would soon come. From Marxism came a plethora of largely varying ideas on how the economy should be run, from Anarchism, to Syndicalism, to vast breeds of Socialism, as well as outright Communism, as advocated in the Manifesto.

    Section II: What Is Socialism?

         Since this book is about Socialism, it is absolutely important that I define Socialism and what brand of Socialism I argue for. A book on economics defines Socialism in the following way...

    There have always been people who have dreamed of a better world. In that sense, it is correct to refer to such individuals as "socialists"--that is, as social reformers. [Contemporary Macroeconomics, by Milton H. Spencer, Worth Publishers, Inc., Fourth Edition, page 386.]

         I do not think that this is a proper definition of Socialism. To define it as simply social reform could mean a wide variety of things. Henry Stephens Salt was a Socialist and a social reformer, who reformed for a variety of causes, including Pacifism, Vegetarianism, among other Humanitarian pursuits. To quote him...

    No League of Nations, or of individuals, can avail, without a change of heart. Reformers of all classes must recognize that it is useless to preach peace by itself, or socialism by itself, or anti-vivisection by itself, or vegetarianism by itself, or kindness to animals by itself. The cause of each and all of the evils that afflict the world is the same the general lack of humanity, the lack of the knowledge that all sentient life is akin, and that he who injures a fellow-being is in fact doing injury to himself. The prospects of a happier society are wrapped up in this despised and neglected truth, the very statement of which, at the present time, must (I well know) appear ridiculous to the accepted instructors of the people. [Seventy Years Among Savages, by Henry Stephens Salt.]

         A Socialist can be called a social reformer in the respect that they work to structure a sort of society. However, this would be an inadequate way to define Socialism. Friedrich Engels, who co-authored The Communist Manifesto with Karl Marx, wrote of Socialists...

    How do communists differ from socialists?

    The so-called socialists are divided into three categories.

    [ Reactionary Socialists: ]

    The first category consists of adherents of a feudal and patriarchal society which has already been destroyed, and is still daily being destroyed, by big industry and world trade and their creation, bourgeois society. This category concludes, from the evils of existing society, that feudal and patriarchal society must be restored because it was free of such evils. In one way or another, all their proposals are directed to this end.

    This category of reactionary socialists, for all their seeming partisanship and their scalding tears for the misery of the proletariat, is nevertheless energetically opposed by the communists for the following reasons:

    (i) It strives for something which is entirely impossible.

    (ii) It seeks to establish the rule of the aristocracy, the guildmasters, the small producers, and their retinue of absolute or feudal monarchs, officials, soldiers, and priests -- a society which was, to be sure, free of the evils of present-day society but which brought it at least as many evils without even offering to the oppressed workers the prospect of liberation through a communist revolution.

    (iii) As soon as the proletariat becomes revolutionary and communist, these reactionary socialists show their true colors by immediately making common cause with the bourgeoisie against the proletarians.

    [ Bourgeois Socialists: ]

    The second category consists of adherent of present-day society who have been frightened for its future by the evils to which it necessarily gives rise. What they want, therefore, is to maintain this society while getting rid of the evils which are an inherent part of it.

    To this end, some propose mere welfare measures -- while others come forward with grandiose systems of reform which, under the pretense of re-organizing society, are in fact intended to preserve the foundations, and hence the life, of existing society.

    Communists must unremittingly struggle against these bourgeois socialists because they work for the enemies of communists and protect the society which communists aim to overthrow.

    [ Democractic Socialists: ]

    Finally, the third category consists of democratic socialists who favor some of the same measures the communists advocate, as described in Question 18 [concerning the course of the revolution], not as part of the transition to communism, however, but as measures which they believe will be sufficient to abolish the misery and evils of present-day society.

    These democratic socialists are either proletarians who are not yet sufficiently clear about the conditions of the liberation of their class, or they are representatives of the petty bourgeoisie, a class which, prior to the achievement of democracy and the socialist measures to which it gives rise, has many interests in common with the proletariat.

    It follows that, in moments of action, the communists will have to come to an understanding with these democratic socialists, and in general to follow as far as possible a common policy with them -- provided that these socialists do not enter into the service of the ruling bourgeoisie and attack the communists.

    It is clear that this form of co-operation in action does not exclude the discussion of differences. [Principles of Communism, by Friedrich Engels, October-November 1847.]

         In short, the Reactionary Socialists are simply Feudalists, Bourgeois Socialists want to reform the current society, and Democratic Socialists strive in the same direction as Communists, but only in increments that they deem are necessary to destroy the misery of society. My views and the views represented in this work would closely resemble what Engels defined as Bourgeois Socialism: removing the ills from society while keeping the benefits that economy and competition can provide. In the Communist Manifesto, Karl Marx defined Reactionary Socialism as, a. Feudal Socialism, b. Petty-Bourgeois Socialism, and c. German or "True" Socialism. He defined the Bourgeois Socialism as the following...

    The socialistic bourgeois want all the advantages of modern social conditions without the struggles and dangers necessarily resulting therefrom. They desire the existing state of society, minus its revolutionary and disintegrating elements. They wish for a bourgeoisie without a proletariat. The bourgeoisie naturally conceives the world in which it is supreme to be the best; and bourgeois socialism develops this comfortable conception into various more or less complete systems. In requiring the proletariat to carry out such a system, and thereby to march straightaway into the social New Jerusalem, it but requires in reality that the proletariat should remain within the bounds of existing society, but should cast away all its hateful ideas concerning the bourgeoisie.

    A second, and more practical, but less systematic, form of this socialism sought to depreciate every revolutionary movement in the eyes of the working class by showing that no mere political reform, but only a change in the material conditions of existence, in economical relations, could be of any advantage to them. By changes in the material conditions of existence, this form of socialism, however, by no means understands abolition of the bourgeois relations of production, an abolition that can be affected only by a revolution, but administrative reforms, based on the continued existence of these relations; reforms, therefore, that in no respect affect the relations between capital and labor, but, at the best, lessen the cost, and simplify the administrative work of bourgeois government.

    Bourgeois socialism attains adequate expression when, and only when, it becomes a mere figure of speech.

    Free trade: for the benefit of the working class. Protective duties: for the benefit of the working class. Prison reform: for the benefit of the working class. This is the last word and the only seriously meant word of bourgeois socialism.

    It is summed up in the phrase: the bourgeois is a bourgeois -- for the benefit of the working class. [The Communist Manifesto, by Karl Marx, by Karl Marx and Friedrich Engels, 1848.]

         Marx has also said of Bourgeois Socialism, "A part of the bourgeoisie is desirous of redressing social grievances in order to secure the continued existence of bourgeois society. To this section belong economists, philanthropists, humanitarians, improvers of the condition of the working class, organizers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind. This form of socialism has, moreover, been worked out into complete systems." [The Communist Manifesto, by Karl Marx, by Karl Marx and Friedrich Engels, 1848.] It is true that many reformers have been Bourgeois Socialists, such as Henry Stephens Salt, Percival Bysshe Shelley, and George Bernard Shaw. For a bit more on Socialism, to quote Pierre-Joseph Proudhon...

    Socialism, which, like the god Vishnu, ever dying and ever returning to life, has experienced within a score of years its ten-thousandth incarnation in the persons of five or six revelators, -- socialism affirms the irregularity of the present constitution of society, and, consequently, of all its previous forms. It asserts, and proves, that the order of civilization is artificial, contradictory, inadequate; that it engenders oppression, misery, and crime; it denounces, not to say calumniates, the whole past of social life, and pushes on with all its might to a reformation of morals and institutions.

    Socialism concludes by declaring political economy a false and sophistical hypothesis, devised to enable the few to exploit the many; and applying the maxim A fructibus cognoscetis, it ends with a demonstration of the impotence and emptiness of political economy by the list of human calamities for which it makes it responsible.

    But if political economy is false, jurisprudence, which in all countries is the science of law and custom, is false also; since, founded on the distinction of thine and mine, it supposes the legitimacy of the facts described and classified by political economy. The theories of public and international law, with all the varieties of representative government, are also false, since they rest on the principle of individual appropriation and the absolute sovereignty of wills.

    All these consequences socialism accepts. To it, political economy, regarded by many as the physiology of wealth, is but the organization of robbery and poverty; just as jurisprudence, honored by legists with the name of written reason, is, in its eyes, but a compilation of the rubrics of legal and official spoliation, -- in a word, of property. Considered in their relations, these two pretended sciences, political economy and law, form, in the opinion of socialism, the complete theory of iniquity and discord. Passing then from negation to affirmation, socialism opposes the principle of property with that of association, and makes vigorous efforts to reconstruct social economy from top to bottom; that is, to establish a new code, a new political system, with institutions and morals diametrically opposed to the ancient forms. [System of Economical Contradictions: Or, the Philosophy of Misery, by Pierre-Joseph Proudhon, translated by Benjamin R. Tucker. 1888, chapter 1.]

         It is important to understand that when Proudhon speaks of political economy, he means, (to quote him from passages earlier) "Political economy is a collection of the observations thus far made in regard to the phenomena of the production and distribution of wealth; that is, in regard to the most common, most spontaneous, and therefore most genuine, forms of labor and exchange." There are some more modern thinkers who have a blurry view of the difference between Communism and Socialism. To quote Bertrand Russell...

    Socialism as a power in Europe may be said to begin with Marx. It is true that before his time there were Socialist theories, both in England and in France. It is also true that in France, during the revolution of 1848, Socialism for a brief period acquired considerable influence in the State. But the Socialists who preceded Marx tended to indulge in Utopian dreams and failed to found any strong or stable political party. To Marx, in collaboration with Engels, are due both the formulation of a coherent body of Socialist doctrine, sufficiently true or plausible to dominate the minds of vast numbers of men, and the formation of the International Socialist movement, which has continued to grow in all European countries throughout the last fifty years. [Proposed Roads to Freedom, by Bertrand Russel, part 1, chapter 1.]

         Marx was not a Socialist, but a Communist, as was Engels. In the essay I quoted from Engels, he even discusses battling the Socialists who oppose Communism. Clearly, these two thinkers were Communists, not Socialists, as Russell failed to understand. An Anarchist believes in the amelioration of government and believes that people will be able to govern themselves with no law. This is important economically because many economic theories have embodied some sort of Anarchism. Communism sees the government as an evil that supports the Capitalist class. With the coming of Communism, it claims as prophecy, government will be abandoned. There are Anarchists, however, who are Capitalists, such as the Libertarians who believe that there should be no such thing as taxation or government. Syndicalism is the belief that our government should be dissolved and that unions should be in control of the nation.

    This movement, which was both a strategy of revolution and a plan for social reorganization, was influenced by the wave of anarchism that spread through parts of Europe during the late nineteenth and early twentieth centuries.

    The advocates of syndicalism demanded the abolition of both capitalism and the state, which they viewed as instruments of oppression, and the reorganization of society into industry-wide associations or syndicates of workers. Thus, there would be a syndicate of all the steel mills, which would be owned and operated by the workers in the steel industry; a syndicate of all the coal mines made up of the workers in the coal industry; and so on. In this way, the syndicates, which were fundamentally trade unions, would replace the state, each syndicate governing its own members in their activities as producers, but leaving them free from interference in all other matters. [Contemporary Macroeconomics, by Milton H. Spencer, Worth Publishers, Inc., Fourth Edition, page 388.]

         I have discussed, to large extent, what Socialism is. It can be simplified as this: government control of the economy in varying degrees. What, then, is Capitalism and Communism?

         Capitalism can be defined as the complete lack of government controlling the economy. This would mean the abolition of any agency that monitored any industry, whether environmentally or in concern to labor and laborers. There are some other fundamental principles of Capitalism, however...

    The economic system of our nation and of many other countries of the Western world is commonly known as "capitalism," "free enterprise," or "private enterprise." These terms are synonymous. What do they mean?

    Capitalism is a system of economic organization characterized by private ownership of the means of production and distribution (land, factories, railroads, etc.) and their operation for profit under predominantly competitive conditions.

    [...]

    INSTITUTIONS OF CAPITALISM

    ...Because capitalism is a type of social system -- or more precisely socioeconomic system -- it has its own particular institutions. Together they comprise the following pillars on which a pure capitalist system rests.

    Private Property

    The institution of private property is the most basic element of capitalism. It assures each person the right to acquire economic goods and resources by legitimate means, enter into contracts involving their use, and dispose of them as he or she wishes. This concept originated in the writings of the late-seventeenth-century English philosopher John Locke. He justified private ownership and control of property as a "natural right" independent of the power of the state. This right, he maintained, provides maximum benefits for society as a whole. (In contrast, socialist views prevailing since the nineteenth century have held that private property is a means of exploiting the working class -- the so-called "proletariat.")

    [...]

    Self Interest--The "Invisible Hand"

    In 1776, a Scottish professor, Adam Smith, published The Wealth of Nations. In this book he described his principle of the "invisible hand." This means that individuals pursuing their self-interests without interference by government would be led as if by an invisible hand to achieve the best good for society. In Smith's words:

    An individual neither intends to promote the public interest, nor knows he is promoting it.... He intends only his own gain, and he is led by an invisible hand to promote an end which was no part of his intention.... It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard for their self-interest. We address ourselves not to their humanity, but to their self-love, and never talk to them of our necessities, but of their advantages.

    Self interest drives people to action, but alone it is not enough. People must think rationally if they are to make the right decisions. This requirement ultimately led economists to introduce the concept of economic man -- the notion that each individual in a capitalistic society is motivated by economic forces. Therefore, each individual will always act in such a way as to obtain the greatest amount of satisfaction for the least amount of sacrifice or cost. These satisfactions may take the form of profits for a businessperson, higher wages or more leisure time for a worker, and greater pleasure from goods purchased for a consumer.

    [...]

    Economic Individualism -- Laissez-Faire

    Today we interpret laissez-faire to mean that absence of government intervention leads to economic individualism and economic freedom. People's economic activities are their own private affairs. As consumers, they are free to spend their incomes as they choose. As producers, they are free to purchase the economic resources they desire and to utilize these resources as they wish.

    [...]

    Competition and Free Markets

    Capitalism operates under conditions of competition. This means that there is rivalry among sellers of similar goods to attract customers and buyers to secure the goods that are wanted. There is rivalry among workers to obtain jobs and among employers to obtain workers. And there is rivalry among buyers and sellers of resource to transact business on the best terms that each can get from the other.

    Theoretical capitalism is often described as a free-market system. competition and free markets are closely related. In their most complete or pure form, free markets have two characteristics:

    1. There are a large number of buyers and sellers, each with a small enough share of the total business so that no individual can affect the market price of the commodity.

    2. Buyers and sellers are unencumbered by economic or institutional restrictions, and possess full knowledge of market prices and alternatives. As a result, they enter or leave markets as they see fit. [Contemporary Macroeconomics, by Milton H. Spencer, Worth Publishers, Inc., Fourth Edition, pages 18-19.]

         A Capitalist can be defined conversely as two different individuals. One is a politically or economically minded individual who approves of the Capitalist economy can rightfully be called a Capitalist. Under Socialist and Communist ideology, however, a Capitalist -- or the Capitalist class -- is an individual who owns capital. Capital, in this sense, is the means of production. Capital can take many forms: machinery in factories, tools used by workers, even finances. Capital is used by the worker to produce a product for the owner of the capital.

         Now that a Capitalist has been defined, what exactly is a Communist? Capitalisms stresses belief in private property, that individuals can do whatever they want with their own property, since it is theirs. Communism, on the other hand, is the opposite of that; Communism stresses communally ownership, where every person owns everything. It is economical Egalitarianism. To quote Karl Marx...

    All property relations in the past have continually been subject to historical change consequent upon the change in historical conditions.

    The French Revolution, for example, abolished feudal property in favor of bourgeois property.

    The distinguishing feature of communism is not the abolition of property generally, but the abolition of bourgeois property. But modern bourgeois private property is the final and most complete expression of the system of producing and appropriating products that is based on class antagonisms, on the exploitation of the many by the few.

    In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property. [The Communist Manifesto, by Karl Marx and Friedrich Engels, 1848.]

         Communism is the belief that private property should be eliminated. Capitalism is the belief that one may do as they wish with their own property and that they owe to others no obligation concerning their property. Socialism, or Bourgeois Socialism, the belief that I will advocate in this work, is the belief that the government should regulate the economy to a certain degree. These are the primary economic systems advocated by economists and philosophers over time.

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