EXPLAINER: A Five Minute Guide To Understanding Socialism Vs Capitalism

‘Isms’ by their very nature can be confusing. Michael Brull breaks down two of the really important ones.

A spectre is haunting the West once again. In the United States of America, the most popular politician by a mile is Bernie Sanders. In the United Kingdom, the socialist leader of the Labour Party Jeremy Corbyn came close to overthrowing the Tory government in one election campaign.

In Greece, the major parties were tossed out one by one and replaced by Syriza. Spain saw Podemos become one of its largest parties. In France, Jean-Luc Melenchon ran an insurgent campaign from the left, threatening to possibly become a presidential candidate one day.

Since the end of the Cold War, many in the West felt that capitalism had finally triumphed. It seems that socialism is reviving in the West. I thought it might be helpful to some readers to explain: what is socialism?

Perhaps we should first ask: what is capitalism?

As we take it for granted, some readers may not be able to think of an answer. Whatever we have now is capitalism, right?

Well, not really. Like basically every country in the world, we have a mixed economy. To understand that we don’t really have socialism or capitalism, let us first try to broadly understand what comprises an economy.


The workplace: privately owned or socially owned

Firstly, there is the workplace. A workplace can be privately owned, it can be socially owned, or it can have a combination of the two. So for example, if you work in a shop, that shop may be owned by a rich person, or by a company which is owned by its shareholders. In that case, it is privately owned. That is one of the primary features of capitalism.

Another model may be one where the shop is owned by the government. In that case, the workers work for the government. A final model is one where the shop is owned by the workers.

In the three models, the conditions under which the workers operate may vary. In the third model, the workers may have the most…

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