How We Distribute Wealth in Society
Capitalism, Socialism, Marxism, and Communism Revisited
The Competitive Trap
Throughout history, the simple answer to the question of who owns what, and why has been competition. The strongest, smartest, and, yes, the luckiest, have always enjoyed an abundance of wealth and its byproducts: security, freedom, and pleasure. The weakest in every society have always suffered from a lack of these.
History can be viewed almost exclusively through the lens of competition. Nearly everything in life must be competed for: a good job, promotions, a desirable mate, a house or apartment, admission to college, popularity in one’s social circle, or even little things like a parking place or a spot at the head of a line.
In prehistoric times, competition worked well for humanity. It culled defects from the gene pool and, later in our history, motivated us to excel, leading to greater advances in agriculture, industry, technology, and countless other facets of life. Cream, as they say, rises to the top, and in a highly competitive system, the best and the brightest are free to exercise their talents to advance civilization further and faster.
Throughout history, the simple answer to the question of who owns what, and why has been competition.
Another advantage of competition is its self-regulating nature. No stifling regulations needed. No futile attempts at universal consensus. No ambiguous questions about what’s fair and what’s not. As Johnny Depp says in Pirates of the Caribbean, “The only rules that really matter are these: what a man can do and what a man can't do.”
But that brings up the obvious dark side. Ethics are frequently left out of the equation. Winners need not be decent people, and we often respect them whether they earned their success honestly or, like pirates, they lied, cheated, and stole their way to riches. The cream may rise to the top, but so does the scum.
The competitive model likewise impels us to vilify the losers. People who repeatedly lose out in life’s challenges are lazy, stupid, or fatally flawed and not the victims of adverse circumstances or bad luck. We have accepted a modern, warped form of Calvinism, in which the winners confirm their salvation by succeeding, while the losers earn their place in hell by failing.
We have accepted a modern, warped form of Calvinism, in which the winners confirm their salvation by succeeding, while the losers earn their place in hell by failing.
For this reason, economic systems based on competition must lead to a breakdown in morals. If the wealthy can break the law and feel righteous while the poor live in self-induced misery, then society has no rules except to win, and only the timid and the naïve will follow the law.
On the global scale, competition is equally problematic. As populations increase, whole countries are caught up competing for dwindling resources, increasing the likelihood of conflict and war. Most of history can already be seen in terms of this struggle, with one country attacking its neighbor for land, food, minerals, and other essential commodities. And as resources dwindle, the struggle will only worsen.
The Failure of Political Systems
You might argue that we already have a solution to many of these problems – government. The first governments arose eight thousand years ago when people agreed to give up certain freedoms to live together peaceably under a common set of rules. The social contract that we signed not only led to the overall advancement of humanity but to a dramatic decline in human suffering.
Unfortunately, most early governments devolved into monarchies, aristocracies, or tyrannies. Eventually, more equitable forms of government evolved. Chief among them were democracy, socialism, Marxism, and Communism.
For various reasons, I am skeptical of all four.
The first governments arose eight thousand years ago when people agreed to give up certain freedoms to live together peaceably under a common set of rules.
The problem with democracies is that virtually all of them are capitalistic. Whether it’s the New Deal capitalism of the 1930s or today’s shareholder capitalism, competition is still the primary mechanism for distributing wealth. And as Thomas Piketty demonstrated in Capital in the Twenty-First Century, capitalism always leads to inequality, because the yearly return on capital always exceeds the increase in wages earned by workers, and most of the capital in our societies is owned by a small percentage of people. This premise is borne out by history – every capitalist society winds up with a rich minority, a struggling middle class, and a poor majority. These disparities existed even during the most progressive polices of the New Deal era.
The opposite of Capitalism is Communism, which relies entirely on the government to distribute wealth. So far, such governments have little to show for themselves. Not only do they stifle individual ambition, but they centralize power in the hands of tyrants or party officials who wind up repressing, instead of helping their citizens.
Marxism is perhaps the noblest in theory, striving for a classless society to provide goods and services “from each according to his ability, to each according to his needs.” Unfortunately, Marxism doesn’t specify a practical form of government, and in every case that I know of, it has devolved into a form of tyranny.
Socialism occupies a middle ground. While the least offensive of the four, it too has problems. Socialist governments are still capitalistic, leaving them vulnerable to spiraling inequality. They also diminish the rewards for individual effort, create a stifling bureaucracy, and put the state in charge of decisions that many people consider personal. The last objection is especially problematic in America, where the aversion to socialism is great. For that reason alone, its acceptance in this country is a non-starter.
The Underlying Power of Culture
If governments can’t solve the problem of wealth distribution, what can?
Perhaps the most important contributor to any government’s success is the culture that underlies it. Governments are based on the values of society and not the other way around. If those values change, it stands to reason that our governments will too.
What I’m suggesting is a co-operative, rather than a competitive set of values. Any society that extols the rugged individual striving heroically to reach the top more than a group of people working together to reach a common goal will always be at war with itself.
I would go even further and assert the desire for extraordinary wealth is a defect rather than a virtue. As Ragnar Lothbrok said about power in Vikings, “It attracts the worst and corrupts the best. It is only given to those who are prepared to lower themselves to pick it up.” You can replace the word “power” with “wealth,” because in today’s world they are the same.
Taking the long view of history, most of the world’s true progress has come from the contributions of the many and not the outstanding efforts of the few.
Taking the long view of history, most of the world’s true progress has come from the contributions of the many and not the outstanding efforts of the few. We tend to remember the Einsteins, Edisons, and Lincolns without considering the historical circumstances that enabled them to make their contributions, and we assume, wrongly, that had they died in childhood, no one else could have duplicated their achievements.
A hundred people will always accomplish more than one, no matter how talented that one person is. In our current culture, we like to focus on the high-risk, low-return gambles while neglecting the low-risk, high-return efforts that historically have proven to be our surest path forward. Co-operation has always been an essential feature of humanity, and we rely on it in countless ways to maintain and build our communities.
Professional associations, leagues, and bureaus
Mentoring and team-building programs
Clubs and fraternal organizations
Volunteerism and charity
The nuclear and non-nuclear family
Scientific and cultural sharing
Business co-operatives
Unions
Churches and other religious institutions
Clearly, the culture is already there. It’s more a matter of emphasis, myth-making, or public relations. If we begin to see co-operation as a source of strength instead of weakness, we can do much to improve our lives. United we stand, divided we fall was the foundation on which our nation was built. That foundation has been badly fractured, but if we embrace the rights and needs of the many over the few, we will change the policies of our extraordinarily wealthy country and ensure that our future is more peaceful, just, and prosperous for all.