Friday , July 12 2024

State capitalism vs socialism vs communism

On an online exchange, a lefty illustrated the distinctions between those three concepts as such:
State capitalism – private ownership with significant govt intervention.
Socialism – democratic ownership of production.
Communism – stateless, moneyless, classless society.

Boiling it down to fundamentals, here are the distinctions according to their definitions:
State capitalism – state? yes; private ownership? yes
Socialism – state? yes; private ownership? no
Communism – state? no; private ownership? no

But those are just the theoretical differences. The question that I think is important to voters is… HOW does it work out in practice?

Because money always plays a role in politics, here’s how it works out…
State capitalism – the rich buys favour with politicians
Socialism – politicians’ cronies become rich and politicians receive kickbacks
Communism – politicians already control the wealth, so they don’t even need to become rich

All the above: control of wealth by the few.

NB: “State capitalism” is also known as “Crony capitalism”.

Compare the three above systems with free-market capitalism – private ownership without state intervention in the market.

State? no; Private ownership? yes


Politicians don’t get wealthy because the state does not control or influence the market.
The rich can only get wealthy by increasing the quality of life of consumers, or by improving the cost efficiency of businesses. That’s what wealth creation means.
If the rich do not produce a product which doesn’t improve anything for anyone, they don’t get customers.

In other words: control of the wealth by the many.

Which of the above systems are left-wing, and which are right-wing?

Of the four systems described above, which would you prefer?

This post was originally published by the author on his personal blog:

About Hoong-Wai

Software analyst. Engineering graduate. A social progressive at heart, and a former atheist. Believes in protecting life and liberty. Recently developed a strong interest in economics despite having given up the subject many moons ago. UKIP parliamentary candidate for 2017. Emigrated from Malaysia to the UK in 1998.

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One comment

  1. Chris Lamb

    I would argue that there is another way.
    How about the Government takes a non majority share in services that are not really conducive to free market (this is what has happened in banks), this way when the service does well the share holder ie. the tax payer does well, this also encourages a certain amount of political oversight as well.
    I believe this sort of approach takes the stability of a state structure with the profitability & efficiency of a private company.