Friday, 30 May 2025

SOCIALISM AND CAPITALISM

Communist tyrant Joseph Stalin

I always thought that the phrase ‘democratic socialism’ – which seems to have fallen out of fashion nowadays – contained a contradiction in terms. Socialists believe that their preferred method of organising society is, or should be, permanent, whereas democrats believe that freedom of choice is paramount and every four or five years voters should be free to kick out the incumbent governing party if they have not been running the country properly.

People living in communist societies do not have that freedom, of course. ‘Permanent’ socialism equals communism in practice and the last thing you want to do if you are establishing a permanent system is to give people a chance to change it at the ballot box. It is tempting to paint Joseph Stalin, who ruled over communist Russia for years, as a sort of cuddly figure. This is a temptation to be resisted, however. He was a brutal dictator who ruled until he died.


I put the phrase permanent in inverted commas because communism is now dead where it was invented – Russia – and capitalism has been adopted in nominally communist China. While it survived it was the most horrible system to live under and could only survive by stealing the secrets of nuclear bombs from the USA. Communism did not encourage the kind of inquisitive thinking that led to the development of the nuclear bombs used at Hiroshima and Nagasaki.

 

Neither Russia nor China have embraced democracy fully. They have a version of it in Russia but Putin rules the roost and I would not be able to write critically of him if I lived there. Fortunately, I don’t and I live in a free(ish) country where I can express my opinions. For what it is worth, I think that Putin, who is a former KGB officer dedicated to preserving state communism, is trying to go down in history as the man who kept Ukraine Russian.

 

I also think that the decline and death of communism has had an adverse effect on capitalist societies. Without having to look over their shoulder to an alternative system in communist countries, the ultra-rich seem to have lost their inhibitions and increased their wealth exponentially. According to the internet, in the early 1970s the average CEO earned twenty times what the average worker made. By 2021 this ratio had increased to 350 times.

 

There is no hard evidence that this is the case, by the way, but the available evidence is overpowering. As communism went down, unfettered capitalism rose and top earners felt able to increase their wealth dramatically. A coincidence? I do not think so, although I would be hard put to prove it conclusively. It is one of those occasions where two systems diverge but are surely related to one another. As an egalitarian system dies, inequality takes off.

 

I am, incidentally, a big supporter of capitalism as well as democracy. Ken Follet’s Century Trilogy of novels shows how people who are theoretically attached to communism and equality start to doubt their communist commitment as they realise that capitalist systems actually work better at providing people with what they want. There is something about the human spirit which demands freedom of thought with freedom to make money.

 

Interestingly, however, it seems that capitalism does not need democratic freedoms to flourish. China can hardly be said to be a free country and is still nominally a communist one, yet it has long abandoned real communism and embraced money-making as a creed - even though the Chinese people do not seem to want a democratic multi=party society. It seems that you do not need to be free to make money but you need to live amongst money-makers to be free.

 

I support capitalism knowing full well that it is not a perfect system and needs restraints built into it to function fairly. This is what democracy is for. The job of politicians is to decide how much tax we should pay and what it should be spent on. There are good arguments in favour of taxing the ultra-rich with higher rates. The only problem is that you tend to create tax-exiles in doing so by driving people out of the perfect society you are creating.

 

You could always build a wall to keep people in but few people mourned the destruction of the wall which did precisely that in Germany. The celebrations which accompanied the destruction of the Berlin wall must give pause to those who want to prevent freedom of movement, one of the most fundamental freedoms we enjoy in a capitalist society. If you buy a train ticket nobody want to know why you are travelling, just where you want to go to.     

 

Another freedom that people enjoy in a capitalist society is the chance to organise themselves by creating trade unions. Those who run companies hate trade unions but they are merely examples of workers exercising their freedoms, playing the system to protect themselves by getting a fair slice of the cake. Although trade union leaders like to portray themselves as socialists, they are inherently a feature of the freedoms of capitalism.

 

I write this as a trade union member myself. Increasingly, self-employed people need the freedom to negotiate what they are paid and it is because of this that the Association of Professional Tourist Guides was formed; to set fees that the industry broadly respects and honours. When top London hotels charge a thousand pounds a night for their rooms, a few hundred pounds for a tourist guide is not that much of an expense to add to it.

 

The alternative is a race to the bottom. One of the reasons I make a living as a guide but not at writing is that guides have a fee system, which freelance writers do not.  Any guide can work outside the fee system, of course, but not many do and the fees seem to work quite well. It is a good example of socialism parachuted into but ultimately dependent on capitalism. You do not, after all, find free trade unions in communist countries. 


Edwin Lerner


My other blog is diaryofatouristguide.blogspot.com