In the previous blog I stressed that capitalism is an essential force that powers the global economy, but there have been many examples of that power being misused and even causing harm to society. What we desperately need is a shift to a more thoughtful and relevant form of capitalism that is sustainable in the long-run. On the other hand, the Socialism-Communism combination has too many problems. Experiment of Soviet Union and China indicates that Communism-Socialism policy restricts people’s freedom and this point alone makes this combination unattractive for many people.
The reason for the birth of Communism by Karl Marx itself was capitalist brutality. If capitalist brutality toward everybody is softened, as Conscious Capitalism is offering, the need for Communism-Socialism shall disappear into the realm of theory. The reality is not so. I will pick an example in the USA and show you how messy this subject is.
Democratic Party Presidential candidate Bernie Sanders once declared that he is a socialist. While Sanders continuously points to Scandinavia as the inspiration for his policies, critics have pointed fingers toward the Venezuelan government as evidence that he would allegedly destroy the U.S. economy. Sanders said, “When I talk about democratic socialism, I’m not looking at Venezuela. I’m not looking at Cuba. I’m looking at countries like Denmark and Sweden.”
A young 28 years old Alexandria Ocasio-Cortez, or AOC (in the above picture) who won a New York Democratic primary, is the new face of socialist America. As Republicans and other conservatives continually respond with “Venezuela” whenever progressive ideas arise such as Medicare for all, free college tuition or a tax-the-rich revenue overhaul, she has responded with more pleasant-sounding socialist models, such as Denmark.
I have a problem in these lines. First of all, the examples these American Democratic Socialists are offering are already democratic Scandinavian countries like Denmark, Sweden, Finland. Secondly, once the Communism-Socialism system is implemented, the unhappy countries we are afraid of becoming are the Soviet Union, China, Cuba and, yes, Venezuela too. The third point is that USA is a big country. Making Socialist USA according to small country Denmark’s model is not applicable.
It appears that the US Democratic Socialists are actually imaging Conscious Capitalism as their government model. They give the impression that Socialist systems are safe by referring Scandinavian countries, but Socialist systems created by US equivalent big countries like the Soviet Union and China produced hundreds of millions of unhappy souls. It is not a safe system.
In my opinion, the Democratic Socialists are misleading US voters by using Scandinavian countries as examples of their vision for America.
I have to add one more element here. China’s CCP has been buying US medias (newspaper, radio, TV etc.) and establishing schools (Confucius Institute). Since US medias have difficulty in getting advertisement money, they cave in to CCP requests and let them run China’s positive images through US medias and schools. This is part of their long game, that of re-engineering thoughts and perceptions. Softly they mold the minds of Americans so that they become more acceptive of Socialism. And it is not only in the US that the CCP has put this practice in place, it is alive and well throughout THE World!
Socialist Movement is against own Democratic Policy in History
John F. Kennedy’s Inaugural Address in January 20, 1961 read as follows. Reminder, John F. Kennedy was a Democrat Party President.
“And so, my fellow Americans: ask not what your country can do for you — ask what you can do for your country.”
The Pew Research Center recently published data showing that 42% of the US voters have a positive view of socialism, including 65% of Democrats and Democratic-leaning voters. Their platforms, it appears, hinge on the concept of shared wealth, in other words, handing out free stuff, like college tuition fees, to just about everyone. The policy is opposite to that of what JFK said. Today, for many, it’s all about what you should expect from your country with little or no reciprocity. However, there is a catch. When free giving policy is implemented, there is always the danger of “running out of money” when the economy changes as it did in Venezuela’s reliance on oil money and it is happening in China today as CCP faces the reality that it is not possible to keep their promise of paying retirement money to their elders (at current pace, China’s state pension fund would run out of money by 2035).
Analysis by Adam Smith Institute: Intellectual’s Anti-Capitalism
Following the collapse of socialist systems at the end of the 1980s, the superiority of the market economy was clear to many. Nevertheless, anti-capitalist animosities have persisted, and, since the outbreak of the financial crisis in 2008, socialist systems have even gained considerable support. In particular among intellectuals, anti-capitalism became once again popular.
It has also supported the environmentalist movement, which blames capitalism for climate change and the destruction of the natural environment. Environmentalists like nature as it is without human disturbances, but they also like human un-natural planned economy instead of capitalist’s spontaneous economy.
Many intellectuals fail to understand the nature of capitalism as an economic order that emerges and grows spontaneously. Unlike socialism, capitalism isn’t a school of thought imposed on reality: free-market capitalism largely evolves spontaneously, growing from the bottom up rather than decreed from above. Capitalism has grown historically, in much the same way languages have developed over time as the result of spontaneous and uncontrolled processes. Esperanto, invented in 1887 as a planned language, has now been around for over 130 years without gaining anything like the global acceptance its inventors were hoping for. Socialism shares some of the characteristics of a planned language in that it is a system devised by intellectuals.
Since their own livelihood depends on their ability to think and communicate ideas that are rational and coherent, they feel more in tune with an artificially planned and constructed economic order than to one that allows for an unplanned, spontaneous development. The notion that economies work better without active intervention and planning is alien to many intellectuals.
Intellectual Anti-Capitalist Views
It is important to realize that intellectuals are elite. Their anti-capitalism is nurtured by their resentment of and opposition to the business elite. If a higher level of education doesn’t automatically guarantee higher incomes and more privileged positions, then the markets that allow this imbalance to happen are seen as unfair from an intellectual’s perspective. Living in a competitive system that consistently awards the top – economic – prizes to others, a system where even the owners of medium-sized businesses achieve higher incomes and wealth than a tenured professor of philosophy, sociology, cultural studies or art history, leads intellectuals to adopt a general skepticism against an economic order based on competition.
Intellectuals tend to set their own value standards as absolutes. Accordingly, it is unfair for someone with little formal education and no interest in high culture to amass a great fortune, while well-educated and well-read academics have to compromise with comparatively little.
Intellectuals tend to equate knowledge acquisition with academic education and book learning. Educational psychology uses the term “explicit knowledge” to refer to this type of knowledge, which is acquired by means of “explicit learning.” However, there is a different kind of knowledge, “implicit knowledge,” which is acquired via “implicit learning.” This is far more basic and often more powerful, although many intellectuals are unaware of its existence. Entrepreneurial research has shown that this is the route to knowledge acquisition taken by the majority of entrepreneurs.
The Hungarian-born, British philosopher Michael Polanyi formulated the concept of “tacit knowledge” when he famously wrote that “we can know more than we can tell” in his book “The Tacit Dimension” (1966). In other words, learning is not necessarily the result of the conscious and systematic acquisition of knowledge, but often learning is the result of unconscious, implicit learning processes. (*Note: See explanation below)
* (Note) Tacit knowledge or implicit knowledge – as opposed to formal, codified or explicit knowledge – is knowledge that is difficult to express or extract, and thus more difficult to transfer to others by means of writing it down or verbalizing it. This can include personal wisdom, experience, insight, and intuition.
Psychology of Intellectuals
Intellectuals cannot understand why someone with an “inferior intellect,” someone who might not even have an undergraduate degree, should end up making a lot more money than they make and living in a much bigger house. They feel offended in their sense of what is “fair” and thus vindicated in their belief in a malfunction of capitalism or the market, which needs to be “corrected” by means of redistribution on a massive scale.
In a 1998 essay, the libertarian philosopher Robert Nozick asks the question: “Why Do Intellectuals Oppose Capitalism?” According to Nozick, it starts at school, where the intellectual brilliance of “verbally gifted children” is rewarded by teachers with uninhibited praise and good grades. This leads them to expect society to operate according to the same norms.
It is a tragic paradox that intellectuals – who tend to start out as the designers, creators or at least chief defenders of anti-capitalist systems – have always ended up among victims of Socialist-Communist governments. In every case, anti-capitalism policy has not only destroyed economic wealth, it has also destroyed the political and mental freedom on which intellectuals rely.
Leading intellectuals engage in a consistent denial of:
1) the atrocities perpetrated in the name of communism, which in the course of the 20th century has claimed an estimate of more than 100 million casualties
2) the civilizing achievements of capitalism, a system that has done more to eliminate poverty than any other economic order in human history.
The Danger of Socialism-Communism
When we compare the systems of Socialism – Communism – Capitalism, the most natural economic system appears not in the human-planned economy. The brutality of the past capitalism need not to be drastically altered to Socialism-Communism. It can be amended to a kinder policy at every level of capitalism such as how Conscious Capitalism is trying to make. Besides, by not choosing Socialism – Communism options, you can still enjoy what Capitalism can offer: eliminating poverty and giving you freedom. Conscious Capitalism potentially has many improvement opportunities without pulling people into a “Venezuela” type of economic disaster.
If the US Socialists’ dream is redistributing wealth artificially to eliminate poor, it is unnecessary and even a dangerous approach no matter how many people are drawn into Socialism. Man-made and planned systems are theoretical, appear logical and are thus attractive to explicit and smart learners like many intellectuals including Karl Marx, but it is not an intuitive nor a wise system for implicit or tacit learners.
Example in United Germany
Communist East Germany and capitalist West Germany were officially united on October 3, 1990, and a new Germany was born. Data Journalist Felix Richter reported last year that despite the fact that Germany has been reunited for 30 years, a sense of division remains, as the East still trails the West economically and differences in mentality and political views persist. GDP 2019 data per capita was in the East € 30,007 while in the West € 43,449. The ratio becomes 43449/30007=1.44. After 30 years of unification the West is still 44% ahead of the East.
East Germany existed as a Communist country between 1949 and 1990. It tells me that 41 years of a Communist system made it difficult to become economically even with Capitalist West Germany. This is why no Socialist-Communist countries are on the list of “rich countries.”
Once a Japanese economist (working as government advisor) stated that it is very difficult for Socialist-Communist countries to get GDP per capita beyond US $12,000 in 2020 standard. He explained that people’s “government relying mentality” is the hardest barrier to shake off. This mentality, or mind-set, is hard to reverse to capitalist’s implicit learning mode and in some cases almost impossible. Let’s keep observing united Germany for the next 10-20 years.