Capitalism or Socialism: Which One Is More Democratic?

Proponents of socialism claim it is more democratic and therefore more moral than capitalism. Leftist filmmaker Michael Moore puts it this way: “Democratic socialism means everyone has a seat at the table and everybody gets a slice of the pie.”

The famed socialist writer Irving Howe described socialism similarly in his 1982 autobiography, “We believe that the democracy…in our political life should also be extended deeply into economic life.”

Nathan Robinson argues in his book Why You Should Be a Socialist that the moral imperative is to place the economy under the control of “the people.” This argument claims that socialism is vindicated through its roots in popular consent. If a majority of people, working through their elected representatives, declares something to be a public entitlement — for example, college or healthcare — then they are justified in extracting resources from those who create wealth to pay for it.

This line of arguments fails to understand how both socialism and capitalism actually operate — big government providing relatively few significant avenues for participation and control for “the people,” while the free market involves the dynamic and significant participation of people as consumers.

The fundamental problem with democratic socialism is its assumption that in a free-market system, the economy is not under the control of the people. Individuals in a free market economy are not only citizens; we are also consumers. The consumer, like the citizen, is a voter. As voters, citizens vote once every two or four years; as consumers, citizens vote many times a day — with money which costs all the time and effort they put in to earn that money. Only some citizens are eligible to vote at the ballot box, but every consumer votes in the marketplace. When citizens participate in a system of representative democracy, their views are filtered through the politicians who represent them. Consumers, by contrast, vote in a system of direct democracy.

Capitalism and democracy are inherently linked, both placing the power of the country in the hands of its citizens.

Rather than operating through “greed” or “exploitation,” free markets function by satisfying the wants of others. The most successful entrepreneurs are those who anticipate our wants even before we have them. In this way, capitalism harnesses self-interest to make things or provide services for others.

Capitalism leads to economic democracy, empowering citizens to direct and shape the economy. Socialism inevitably leads to the economic dictatorship of the elite, who makes decisions about what they think citizens want and how much they should pay for it

Both capitalism and democracy empower citizens, rather than the governmental elite, to direct the country and thus share an inherent link.

WATCH: “How Socialism Ruined My Country” – Felipe Moura Brasil

Related reading: “Venezuela Reaches the End of the Road to Serfdom” – Kevin Williamson, National Review

In capitalism, the customer is free to make choices about what they purchase, thus directing and shaping the economy. In socialism, the customer is powerless, under the control of the government.

Late-stage socialist failures, such as Venezuela, eventually run out of essential items, leaving the citizenry in desperate conditions.

Socialism’s proponents often try to distinguish “democratic socialism” from socialism, but the results are the same.

In socialist societies, self-interest is not eliminated but is instead focused on gaining political power.

Related video: “Capitalism vs. Socialism” – Andy Puzder

The more capitalism, the less “socialism” you need. In America since 2017, a policy of lower taxes and less government regulation has led to a robust economic expansion.

Unemployment, notably among minority groups, is at generational lows. Economic expansion gets people off welfare and into work.

At the end of 2018, the unemployment rate was at a 40 year low for all workers; the unemployment rate for black workers was 6.8 percent, the lowest rate in 45 years.

Socialism works against its proponents’ own interest, yet it’s gaining popularity with younger Americans. In a 2015 Gallup poll, a larger percentage of respondents under 30 favored socialism over capitalism.

Related reading: “Job Creation: How It Really Works and Why Government Doesn't Understand It (Job Creation USA, Volume 1)” – Andy Puzder

Free enterprise is an economic system in which few restrictions are placed on business activities and property ownership, and where there is minimal government involvement in commercial interactions.

Countries with the most economic freedom earn more than six times the annual earnings of countries with the lowest level of economic freedom.

Read Arthur Brooks on the significance of free enterprise.

Socialist governments attempt to control millions of people’s complex economic decisions through regulatory schemes, tax policy, labor regulation, etc.—all of which can only hurt the economy.

Entrepreneurship leads to increasing private sector knowledge.

Increasing knowledge leads to growth and wealth.

Socialism is the concentration of power into the hands of government elites to achieve the following purposes: central planning of the economy and the radical redistribution of wealth.

Socialists often try to hide their method of enforcing socialism, by using terms like “sharing” or “helping people,” but socialism is ultimately imposed and enforced through government force.

Socialism inevitably involves growing government, thus shrinking the autonomy of the private citizen.

Related video: “How’s Socialism Doing in Venezuela?” – Debbie D’Souza