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Where They Separate

 

“Capitalism and Communism are worlds apart but separated only by a thin line.”

 

Most of the people living in Capitalistic society get scared by the mere mention of the phrase, “Government take-over”. The first thing that pops up in their crania is “Communism”, which invariable translates into “Loss of freedom”. Now it is not completely untrue as in Communism you don’t have a choice about what you want to do, when you want to do it and how much you will get for doing whatever you do. But what people don’t realize is, doesn’t matter whether you are living in Capitalism or Communism, 60% of the population generally never has a choice. They have to do what is available to them and they only earn barely enough for their lives. And then another 35% only have better jobs. The only difference between the two forms of society for them is, in Communism you have to work even if you don’t want to.

 

However, I don’t support Communism, just like I don’t support pure Capitalism. I have my reasons which I have explained in various other write-ups I have done. If you read my write-ups you will know that I support “Equalism” which is Capitalistic to the extent that everyone is free to choose what they want to do, when they want to do and how much they want to get paid. However, you can get paid what you want to for your work but its’ total can only amount to a certain level, which is where it becomes Communistic, although unlike Communism, you can still earn way more than what many others will earn, simply because you are better, more talented, more hardworking or more enterprising then the rest. The Communistic cap on earnings to a Capitalistic set-up will make the society more equal in wealth distribution and opportunities more easily accessible to the majority of the population, which in Communism has no choice, and in Capitalism cannot avail them because they are beyond their reach.

 

Anyhow, this article is not about Equalism, Capitalism or Communism. It is more about how to differentiate what constitutes Capitalistic decision, what makes the same decision Communistic and what constitutes “Betrayal of national interests”. So let me explain it with a very simple example.

 

Suppose I want to set up an industrial unit manufacturing steel for car part industry. For this I will need pure Iron. I can buy Iron from an Iron ore processing unit which extracts Iron from mineral ore and then purifies to market it. Now that Iron extraction unit buys mineral ore from a distributor who is in turn supplied by a miner who controls the mining site. Based on this example, Communism, Capitalism and Betrayal of National interests can be differentiated as follows:

 

đ 1. Communism:

In Communism, the Steel manufacturing unit, the Car manufacturing units, the Iron ore processing units and the mines, everything is controlled and run by the government. Neither me, nor any other private individual can own any of it. All we will get is jobs in these units and get paid for our work like everybody else, because we all are equal.

 

đ 2. Capitalism:

In Capitalism, I have the freedom to own an industrial unit and run it as I please for whatever profit I want to make. I am free to switch over and own a car part manufacturing unit, or an ore processing unit, or own all of them provided I have capital to do so. This is the freedom in Capitalism.

 

đ 3. Betrayal of National Interests:

One thing you might have noticed under the above heading of “Capitalism” is that I didn’t mention “Mining site” in it. The reason is, the mineral wealth does not belong to any one individual but belongs to the entire community. There are two types of resources: Renewable (Like Sunlight, wind, rainfall etc) and non-renewable (Like fossil fuels, mineral ores etc). Both of these belong to the entire country or community, and not to one individual. (Do not confuse the issue with Middle East where the Sheikhs are the rulers by default and hence the Government within themselves and hence can claim the resources as theirs without anyone questioning them. But this cannot be the case in a Democracy.) Mineral wealth belongs to the nation and the Government in a democracy is not the owner of that wealth but just a caretaker. The public can change the Government any time via voting in elections. As such, the Government has got no right to sell those mineral sites to private organizations for cheap so that they can dig out the mineral wealth and make many times more money. That is underselling the national wealth for a private organization’s profit, which can be classified as nothing else but betrayal of national interests. More details are in my write-up on the same which can be accessed via the following link:

 

The Mining Betrayal – Economics Explained

 

 

đ 4. Equalism:

I know I didn’t mention it above that I will be discussing this point as well, but now that I have already gotten down and dirty with it, we may as well go through this muscle flexing exercise. In Equalism, the Government will control the mining sites as it should be doing in Capitalism as well but in Equalism, unlike Capitalism, everyone will be free to own a Steel manufacturing unit, a car parts manufacturing unit, an ore processing unit, either completely or as a share in them which will be no more than an investment of $1 Million. Unlike Communism, everyone will be free to earn as much profit from it as much they can as long as their earning are not more than 15times greater than the money the poorest in the society are getting as assistance from the Government every month. Everyone will be free to own what they want to but only one such thing. So if I own a steel manufacturing plant or a $1 Million share in it, I cannot own another business until I sell my share in the Steel manufacturing plant. There is freedom to do what I want to but just because I earn a lot more than others doesn’t mean I can buy out everything else in the market thus depriving others of an opportunity to succeed. And because everyone can own only one business, it means there are a lot more business opportunities in the market up for grabs, provided one is enterprising enough to seize the opportunity, work hard and succeed. The salary cap is big enough to make one’s living standards much better than most of the population as one can earn 15 times more than what the poorest get, while the employed can also earn as much as 10 times. At the same time the difference between 7-10 times and 15 times is not so huge that nobody else has the means or resources to own a business of their own and earn upto 15 times. The cap of one business along with the earning cap will make sure that no business organization will be huge enough so as to drain all the economy’s money into its’ account thus leaving the weaker sections of the society vulnerable to market diktats.

 

Another example:

 

Now since I am on fire, let us take another example. This time let me take the example of Public Transport.

 

đ 1. Communism:

Government owns and runs it. All profit goes into Government account. All loses are Government’s headache as providing this service is Government’s responsibility.

 

đ 2. Capitalism:

The Governments own the public transport and run it for profit or loss as Public Transport is Government responsibility. However, the Government can open up the Public Transport sector to Private operators giving them permission to bring their own buses, setting up their own business centers and offices, then hiring staff and running the services for profit after paying the Government a monthly or annual permit fees (Permit to operate a passenger transport vehicle) and fees to use public places like interchanges, bus terminals etc. This will mean that the Government will not only be not needed to spend and provide this service, but it will also be earning double profit; As tax from the profits earned by private operators plus the permit fees those operators will be paying to provide the services. The public will benefit not only because there will be competing services and hence better service, but they will still get the same number of jobs in this sector.

 

đ 3. Betrayal of national interests:

If the Government leases away the service to a private organization telling that organization to provide the service for it using the Government owned machinery, employing the same number of people which the Government will need to run the service on its’ own, and then pay the private organization money to run the service, it can be classified as nothing but betrayal of national interests. In this case the Government is suffering double loss. It is over spending as it is paying private organizations money for running what it can run on its’ own using same infrastructure and manpower (thus paying same salaries, benefits and expenses), but Government is also missing out on earning any profit which it would have in case the above mentioned example had been followed.

 

đ 4. Equalism:

The transport sector can be based on the example given under the heading “Capitalism” above but the business investment cap of $1 Million and one business per individual, along with the earning cap of 15 times will apply. This would mean that it won’t be just one or two companies who will own the entire Public Transport in a metropolitan area but many individuals who can afford to invest $1 Million can own a share of it.

 

đ Conclusion:

The thin line that differen tiates a Communistic and a Capitalistic decision is whether the decision curbs freedom that in no way affects national interests, or not. If the decision is taken in national interests as given in examples above, and does not curb individual freedom in any way, the decision is well within the reigns of Capitalistic set-up. Every Government takeover is not to curb freedom or convert to Communism. Remember, national interests are always more important than individual freedom, just like society is always more important than the individuals that make it.

 

 

Fatal Urge Carefree Kiss,

 

Amanpreet Singh Rai

 

 

 

 

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