By Roland Watson

Economies are organized and managed under this or that "economic system," the basic alternatives of which are communism, socialism and capitalism. In theory, the first two are actually "social systems," since they are intended to cover not only economics but also government and politics (and all other concerns of individuals and the state as well).

For communism, Marx and Engels recognized that the existence of markets and private property inexorably led to the creation of economic inequalities and great concentrations of economic power. Furthermore, such economic power in turn led to a centralization and concentration of political power, with the two together serving to create the basis for enduring oppression of the many by the few.

Their solution was the elimination of private property. No such concentrations of wealth henceforth would be allowed, and therefore the concentration of political power would be avoided as well.

"The theory of the communists may be summed up in a single sentence: Abolition of private property."

- The Communist Manifesto

Throughout history many people have envisioned such utopias, with communal ownership of property, consensus-based decision-making, and the elimination of class distinctions. And, they are a beautiful fantasy, but to-date they have proven to be eminently and completely unworkable.

What Marx and Engels failed to realize was that abolishing private property did not inevitably lead to a diffusion of political power. Before, economic power led to political power. Afterwards, the requirement for centralized political power remained, which in turn granted economic power. Communism simply turned the order around.

When personal ownership of property was abolished, the property reverted to the state, and someone - the state - had to manage it. This was accomplished through centralized planning and control, so the net effect was to increase the concentration of political power. This in turn increased the susceptibility for abuse, which under such individuals as Stalin, Mao and Pol Pot, was realized in the extreme.

In summary, communism is a lovely ideal, and also a quaint nostalgia for traditional, communal, village-based existence, but it conflicts with human nature, and it is also technically unworkable, particularly in a populous society.

The second economic system, socialism, is in theory similar to, even indistinguishable from, communism, as it also advocates community ownership of land and industry. Perhaps it does not go so far as to demand the elimination of private property, but in any case the real difference is one of application. The numerous socialist nations in Western Europe are worlds apart from the communist states. To begin with, they are democracies, and as such the political system is separate from the economic system. And, for their economies, there is government ownership of or involvement in a wide range of industries, impacting all areas of life, including such things as housing, transportation and health care, but this entails a far smaller degree of actual management and control. Government involvement is often in the form of ownership of companies that are active in the different industries, which companies function for the most part autonomously, and in response to the demands and challenges of markets.

Large concentrations of personal wealth are reduced to a degree, but not by direct expropriation, i.e., by confiscation, but rather by high taxes (both income and inheritance), although it is still the case that great fortunes have been accumulated. In this regard, the nations of Scandinavia are by far the most egalitarian. Everyone pays high tax rates, and the resultant revenues are used to level society.

In general, one can take the view that the purpose of government in a socialist nation far exceeds the concept of protection that was described in the the earlier article. However, there is an alternative explanation. We saw that one modern evolution of this purpose is to reverse discrimination. One could argue, particularly for Scandinavia, that such countries have elevated this to the position of primary government purpose, and furthermore that they take a much more proactive view. They attempt not only to reverse current discrimination, but also to ensure that no basis develops by which new discrimination can take hold. And in this regard, they truly are a social system.

One might then ask, if the Scandinavian model is so effective, why not apply it in other countries? And here, it is important to recognize the cultural homogeneity of Scandinavian nations. They are perfect test cases, since they have small populations in comparison to their land areas and resource bases, and since there is little internal cultural discord. But, they have experienced such discord in recent years, as they have attempted to assimilate large refugee populations from other, foreign, cultural groups.

There is a real question whether the Scandinavian model would function in large heterogeneous societies, particularly those with long traditions of class structure, and also considering the inevitable resistance that such societies would have to significantly increased taxes.

© Roland Watson 2016