Capitalism Vs Communism: Lessons From History

In the social sciences, theories won't get us very far. Instead, we should look at the economic systems, e.g., USSR, CPR, Egypt, Great Britain, and the thousands of small communist and anarchist utopias around the world throughout history. There we will find that all communist economies eventually floundered because of lack of monetary incentives. They reduced the lowest levels of poverty, but could not advance the general material welfare. Internal violence was reduced, but not necessarily international violence. The only societies that had successful communist economies were primitive native tribes, e.g., American Indians, where most goods were owned by the tribe and personal possessions were few. However, we know what happened to these peoples when confronted by the capitalists!

It is true, democracies, autocracies, dictatorships, etc., are forms of government that have little connection with economic welfare. To understand that subject, we have to look at the economic systems, e.g., capitalism, socialism, communism, etc. Any of the above governments can and have worked with these different economic models with success (and failure). To date, capitalism has shown better results than any other system. However, the current forms of western capitalism are heavily modified by government "rules of the game" that ameliorate the unfavorable side-effects, such as, depressions, excessive inequality, poverty, etc.

Furthermore, feudal, socialist, and communist economies all over the globe, from small utopias (New Harmony, Lanark, Oneida in the U.S.) to colossal nations (Russia, China), with very few exceptions, have given up on their attempts to establish egalitarian societies because equality and incentive are incompatible.

Where they failed, leftists and fascists removed these liberal governments, but ultimately failed to provide an adequate prescription for per capita income advancement, either by improving technologies or conquering other countries, or both. They are mostly obsolete today. Additionally, all attempts by leftist governments to create classless societies, resulted in merely replacing the capitalist classes with bureaucratic classes, the general population remaining as poor as ever. This was certainly true of the U.S.S.R., China, and all eastern European countries under the hegemony of the U.S.S.R.

All the richer countries have capitalist economies and most are democratic. In these countries when inequalities generated by capitalism became too great, the exploited and oppressed masses pressured their representatives to pass laws that relieved the poorer segments of the population. Returning to new, revolutionary leftist governments, in the modern world, where would such a government obtain capital and trade to improve the living standards of its people? There are no large leftist governments with such excess money that they can support a poor leftist government until it becomes self-sufficient, a la the then U.S.S.R. vis a vis Cuba.

The rich capitalist countries certainly have no incentive to lend money to leftist governments as a matter of ideology. Best that a new Marxist government can do is redistribute income from the rich to the poor as was done in revolutionary Russia, China, and Cuba, but then what?

Redistribution benefits the poor at the expense of the rich, but it does not promote increased incomes generally because of the lack of incentives. Therefore, where does it obtain the capital and technology to increase incomes, if the capitalists will not provide it? Inexorably, the lack of incentives under socialism, communism, or any other leftist brand will lead to malaise and poverty, as it did in Russia, eastern Europe, China and Cuba. There are ample lessons in the 75 years of wars to reach the simple conclusion that democratic capitalist nations are successful, and totalitarian socialist nations are not.

Geography is important in determining whether Nepal has any prospect of becoming richer. Countries that have poor transportation facilities must devote much of the acquired technology to improving it. This was done in the formative years in the U.S. Otherwise, supplies cannot reach producers and products cannot reach customers cheaply enough to be bought by those with modest incomes.

We are talking here, not only of innovative scientists and engineers, the unattainable for Nepal, but technical operators, i.e., "technicians", the people who must know enough math and science to make small decisions involving the operation of increasingly complex machinery.

Whether and how fast can a country modernize itself and become rich, hence, depends not only on geography and culture, but also on the economy, polity, and of course, history of the nations.

(Kamala Sarup was born in Dharan. This article was published in Nepalnews.com. Kamala Sarup is editor of http://peacejournalism.com/)

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