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Capitalism, Socialism and Agenda 2030

Although everyone understands it in their own way and with its nuances, we can say that capitalism is the theory according to which economic progress consists of and depends on individual interest. The indispensable condition for it to be carried out is none other than that the individual has freedom to act, without obstacles imposed by the State. Fulfilling this condition, interest suggests to each person the most convenient way of acting, and free competition eliminates the least proficient from the market. A consequence of this fact will be that everyone will be driven to produce only what they know how to do best, and, consequently, consumers will always enjoy the best products at the lowest possible price.

This theory matured in Europe during the eighteenth century. It was expressed for the first time fully and finished by Adam Smith (1723-1790) in his Inquiry into the Nature and Causes of the Wealth of Nations (1776). At that time, governments inspired their interventions in the economy in a series of doctrines grouped under the term mercantilism, which essentially tended to the accumulation of enormous amounts of money in the state treasury. According to the mercantilist philosophy, it was convenient to export the maximum possible amount of national products, since in this way money was brought in from abroad, and to import as little as possible, because in this way the minimum desirable amount of currency left the country.

Naturally, since everyone practiced the same system, it turned out that consumers paid more for domestic products and manufacturers complained that they could not sell goods made abroad. In that situation, Adam Smith's theories came like a breath of fresh air and aroused genuine enthusiasm. It was such that public opinion itself ended up imposing them on governments in the first decades of the 19th century.

In the years following the publication of Adam Smith's book, between 1770 and 1830, the Industrial Revolution took place, that is, the age of machines had begun. This meant, in practice, that the producer was no longer a person, but a set of devices and instruments, of men to make them work and of technicians to direct each other. The worker could only work if he found a factory that agreed to accept him; the businessman could not establish himself if he did not find someone willing to advance him the necessary money to acquire the machinery.

Under such circumstances, employers speculated with the abundance of labor, forcing workers to accept miserable wages. But the same exploiters were in turn at the mercy of those who lent them the money at a very high interest rate. The industrial cities were transformed into immense agglomerations of slums, in which the helpless workers, destitute and hungry, spent their sad life. Who was to blame for it? Without a doubt, those who hoarded the essential element for the entire system to function: capital.

Theories Are Applied by Human Beings

Precisely Capital is the title of the work that the German Karl Heinrich Marx (1818-1883) dedicated in 1867 to the analysis of the situation and the search for a remedy. For Marx, capital is presented as the result of the misappropriation that some individuals commit to the detriment of the workers, since they pocket the difference between the sale price of a product and the compensation received by the workers for having manufactured it. This difference (surplus value) not only enriches the individuals in question, but also enables them to impose their will on others, because only they can lend the necessary capital to set economic life in motion.

Given these conclusions, it is not hard to imagine the remedy that Marx proposed: the workers must revolt, eliminate the capitalists and take over the management of the means of production, such as factories, mines, banks, etc. Marx did not create socialism -some thinkers preceded him and others followed- but he was undoubtedly its most representative author. His theories were a source of inspiration for the Russian Bolsheviks who seized power in their country in 1917 and began an experiment in socialist economy, which later spread to many other nations, such as the former German Democratic Republic (GDR) and Czechoslovakia, Poland, Bulgaria, Romania, Hungary, China, etc.

To tell the truth, neither capitalism nor socialism have been put into practice in the way they were theorized. The first one did not have important results in the 19th century, but the absolute condition that its theorists established for its operation -the total freedom of the market- was never actually fulfilled. Governments, with regard to foreign affairs, although renounced mercantilism in theory, never completely dispensed with protecting certain national industries by imposing obstacles to foreign trade (protectionism). Even in the interior, free competition lacked the obligatory condition for it to be effective: the parity of the forces in action. At the beginning of industrial civilization, the employers managed to organize themselves with genuine independence, but the workers could not do the same. When trade union organizations were authorized, the situation of the workers improved, even within the capitalist regime. Nor has socialism been fully applied in the countries that claim to belong to it, since the management of the means of production has never been, in fact, in the hands of the workers, but rather in those of a minority of leaders.

And from Theory to Practice...

Do you remember that joke or story about those communists who lived in good mansions and visited the factories in no worse cars? "Although we are the ones who live in those houses and move in these vehicles, you know that they are yours, they belong to the people," they used to repeat to some exhausted and deceived workers who would end up realizing that... from theory to practice... Although perhaps the worst thing was not that they had lost all option to aspire to some day live in one of those mansions and ride around in those cars... the worst thing is that they had lost their Freedom, they had entrusted it to the "State" to manage. Freedom in exchange for supposed equality. Scam.

Although this last comment seems to be more in the political sphere, there is no doubt that economic systems have to be set up and managed by people, so they are inevitably linked to political systems. Thus, we can see how the western democracies, based on the freedom of the individual and on the sacred respect for private property, unceremoniously embraced capitalism; while in those places where socialist/communist ideologies took root, the State became not only the "owner" of "private" property, but also in a certain way of the own citizens, as they renounced to their freedom in favor of a supposed common and collective good. Individualism versus collectivism, private property versus state property.

La Bolsa de Nueva York en Wall Street.
New York Stock Exchange on Wall Street. [Photo: LPDS]
It is not surprising that socialism and communism as economic and political systems are favored by those who only want to perpetuate themselves in power; it is a perfect model for tyrannies. Being "Dad State" the conductor, without private property and, therefore, without freedom of entrepreneurship, the middle classes disappear, a vital counterweight in maintaining freedoms in the face of abuse of power and totalitarian tendencies. And who pulls the strings of said "Daddy State"? Well, a super small group of people; one of those who live in the big houses and get around in the good cars that "belong to the people". In short, a magnificent way to control an entire country, enormously simpler than the control that capitalism tends to exercise over the social mass, which is much more sophisticated.

Teatro Karl Marx en La Habana, Cuba.
Karl Marx Theatre in Havana, Cuba. [Photo: LPDS]
Although capitalism also has its own share of excesses, both from a material and human point of view, it does at least offer the individual the possibility of entrepreneurship in order to achieve dreams and goals. In practice, socialism and communism would be like that treadmill in the gym for citizens: you can walk, jog and run miles and miles... but you don't move forward, you don't move from the spot. Capitalism is ruthless in theory and in practice; It is like a card player who does not hide its aggressiveness from the beginning of the game. On the other hand, socialism/communism is truly humane, well-intentioned and even has a certain romantic air on paper... but in practice it is as ruthless as capitalism, or more, since it has deprived the people of any defense mechanism against abuse; in this case, the card player starts with its best smile... but during the game it will show signs of its relentless ferocity, knowing that it has not one, but all the aces up its sleeve. Although the exercise of power tends towards absolutism, authoritarianism and totalitarianism, while in a capitalist and liberal system there are breaks, counter-powers and punishments for such excesses, in the socialist/communist system, it is the State, and only the State, which at the same time it is power and counter-power; the same one who governs is also the one in charge of making opposition. while in a capitalist and liberal system there are brakes, counter-powers and punishments for such excesses, in the socialist/communist one such counterweights are absent.

And Something in Between?

And at this point... isn't there some system in between, capable of capturing the best of capitalism and socialism, while discarding their respective flaws? This question was once brought to me by someone after returning from its first trip to a "communist" country; yes, communist between quotation marks on purpose because during that intense experience lived on the street, among the people, that person realized that the day to day in that system had thick communist strokes, but also had capitalist brushstrokes. What if we look for a system that does not interfere with the freedom of the individual and, at the same time, instead of being aggressive, is humane, caring, protective of the weakest and respectful of the environment that surrounds us? I don't know if the search for that hybrid can be as successful as that of Eldorado, the Yeti or the Loch Ness Monster, but what at least seems clear at this point is that this slogan launched globally for some time now to the world population, stating that we must be calm and not fear nothing because "in 2030 you will own nothing and you will be happy"... it sounds not really convincing...

Our Freedom, the Real 2030 Goal

If we look closely, it is a clear message of a socialist/communist nature, which downplays private property in order to, despite this, supposedly endow the human being with its longed-for self-realization. And, beware, because the motto does not seem to remain only in the material sphere; perhaps the claim is that we do not have freedom either? Whatever it is, what is curious is that some of the bigwigs who promote this proclamation have not stopped in recent times from acquiring more and more properties, companies and land. To have at least some credibility when it comes to delivering that message, they should lead by example and not do the opposite of what they say, right? Why "in 2030 YOU will own nothing and YOU will be happy" and not "in 2030 WE will own nothing and WE will be happy"? It seems that the plan is designed by "them"... but it does not go with "them"... but it is directed to us... very suspicious...

You will own nothing and you will be happy... as a clam...

Returning to the axis of this article, it should be remembered that the United States suffered a terrible economic crisis in 1929, which spread to the countries subject to the capitalist system -remember that when the US sneezes...-. Some observed on that occasion that, if there is a good chance of selling the produced commodities at a profit, capital always shows some interest in encouraging production. Therefore, the true cause of misery would not be so much in the tyranny of capital as in the uncertainty of demand, which distances the capitalist from productive investments.

In turn, the decline in demand is due substantially to the low purchasing power of the working classes. If the workers, instead of being unemployed or earning little, worked and earned something more, they could buy more goods, and not only they would live better, but it would also result in the employment of other workers. There was therefore a vicious circle. The sharp decline in demand produced unemployment and misery; but it is that unemployment and misery tended, for their part, to lower demand. On the other hand, the greater the demand for merchandise, the greater the jobs and benefits, which in turn generated other demands.

New Deal, Green New Deal, Eco-Sustainability, Resilience...

But how could this tongue twister be broken or, in other words, how could one get out of this vicious circle? Only the state could give the initial impetus. Thus, Franklin Delano Roosevelt (1882-1945), elected president of the United States in 1933, put the economy in motion again, by increasing demand with a mammoth public investment program, known as New Deal -something similar is what the EU intends with its multi-million dollar program, curiously called Green New Deal, originality in abundance, to try to stimulate its economy with resilience and eco-sustainable investments. This experience was studied and theorized by the English economist John Maynard Keynes (1883-1946), in the work Theory on employment, interest and currency (1936), a source of inspiration for all nations that have not decidedly adopted socialism.

According to the Keynesian theory, which constitutes the most logical and coherent modern development of the ancient doctrines of liberalism, the State must not put a brake on private initiative, but it must not lose sight of the economic mechanism and must intervene when the time is right to stimulate it. There are essentially three state intervention instruments:

  • Monetary Policy, that is, the greater or lesser ease of recourse to credit. In the case of the EU, the monetary policy is common, since the member states do not have their own currency.
  • Fiscal Policy, or greater pressure in periods of well-being and relief in difficult periods. It is curious that in Spain, despite the fact that its economy is currently going through a clear critical moment, the Government's policies, far from alleviating the fiscal burden on families and the productive fabric, go in the opposite direction, making the suffocation even greater due to the effect of inflation. It does not seem the most appropriate thing to strangle the increasingly diminished and impoverished middle classes to maintain exorbitant public spending, on the rise for decades, in which fundamental items such as Health or Education already compete in clear inequality of conditions with those generated by the own structure of the State; that is, the overload of public officials and, especially, political positions and employees placed by ​​parties and unions both in the central Administration and in the regional ones -nepotism practice-, with the consequent and unnecessary duplication of functions and expense. In short, an already unsustainable, shameful and hurtful waste of public coffers. We are facing a monstrous public structure, which is barely mantained by the private sector; a whole conglomerate of patronage networks that will not only suffer, but should collapse once the purchase of debt by the European Central Bank, the sole support of the overflowing raft of the Spanish public deficit, ceases.

Presumably the Next Generation EU Funds should be that initial impulse that the State, through the Government, just as the New Deal did at the time, gave to the productive fabric in order to boost the economy. However, if not only the arrival of the funds is not being managed correctly, but also those that already arrived are serving to continue fattening the sick monster...

  • Direct Investments in the most vulnerable sectors of the private initiative, so as to contribute to the general progress of the economy.


To finish, I would like to point out that we are witnessing a historical moment in which the figure and role of the States, as we have been knowing them for the last century, seem to be undergoing a redefinition. The covid-19 crisis, within its enormous and multiple doubts generated, has made something clear: that large corporations, in this case pharmaceutical companies, hand in hand with technology companies and the media, not only exert pressure on different governments to impose their strategies, but rather, now without a mask and in broad daylight, they have shown that they are above them, either because governments are already directly at their service, or because they have avoided confronting these behemoths that not only control, but they seem to be erecting in the new States. Of course we are not discovering anything that is not known... but never before there has been an assault for control and against the Freedom of individuals, in a coordinated manner and on a global scale. Capitalism, Socialism and Agenda 2030, the rearrangement is accelerating.

Worry about protecting your health. But do not neglect to protect your Freedom.