Analyzing the SOHO Debate between Socialism and Capitalism.

In an ongoing query into socialism and capitalism, I decided to analyze a debate hosted by SOHO Forums in New York City between Richard Wolff, a Professor Emeritus of Economics at the University of Massachusetts Amherst; and Gene Epstein an Austrian School economist and associated scholar at the Ludwig von Mises Institute in Auburn, Alabama. This debate offers the proposition that socialism is preferable to capitalism as an economic system that promotes freedom, equality, and prosperity. Wolff argues for socialism as a preferable method and Epstein defends capitalism against socialism. This analysis focuses on the debate opening statements and rebuttals which is roughly the first hour of the video, this analysis avoids the Q&A section considering the most important content comes from the direct debate between the two experts.

Richard Wolff – Socialism

Wolff introduces us to socialism through a sense of history and the American public in the early 20^th century. He suggests that socialism for the workers rights and that capitalism delivered a false promise of liberty, democracy, and prosperity. Although Wolff does admit the faults of the Soviet Union, which led to the terror around socialism, he feels socialism is an immune response to the failures of capitalism. Wolff outlines the failures of capitalism through three methods:

• Unstable: 47 year economic downturns are common.
• Unequal: 80-90 of the richest in the world have more wealth than the bottom half of people (3 billion).
• Undemocratic: Buying of our political process.

Wolff returns to the historical context of capitalism as following a lineage of oppression from slavery (masters and slaves), feudalism (lords and serfs), and capitalism (employers and employees). He concludes that capitalism falls under its own making – much like every other system suggesting that socialism is about democratizing the workplace and freeing labour where workers have a decision on the who, what, where, when and why of production inside of an economic system. This – as a thesis – is how Wolff reflects socialism can be better – learning from the detrimental systems of the Soviet Union, China, and Cuba.

Gene Epstein – Capitalism

Epstein uses experiential learning as a lens for socialism – reflecting on the horrors that cannot be undone by socialism in the Soviet Union, and makes a humanitarian case for capitalism, compared to socialism, produced far-less bloodshed in the 20^th century. Epstein does not debate democratization in the workplace, rather challenges Wolff that democratization is alive and well in the workplace, such as: freedom to choose labour based on experience, education, location, and even bargaining with labour unions. Epstein does not condone labour unions, rather accepts the intermediary between owner and employee that is beneficial for all, considering owners (indirectly through contributions) and employees pay a lot of money into large labour unions.

Epstein stays with this idea suggesting democracy is already in the workplace through individual and personal decision-making which reflects a liberal ideology. In addition, reflects the billions of dollars that go into workers unions. With that framework, Epstein shows the inherent economic contradiction that socialism reflects through logic as he opines that the billions that go into trade unions and bank financing of organizations are needed to leverage socialism. Therefore, once socialism is implemented – where does the funding come from if there is no capital-financing for the system? This in turn shows that socialism falls under its own theory much like every other theory and – historically, speaking – in places like the Soviet Union, Cuba, and North Korea.

Epstein concludes that socialism as an economic system is highly political and eventually cycles through political power, which in turn, causes an arithmetical error in participative democracy. Although he says capitalism has its flaws, its most flawed is a far better system of freedom, equality, and prosperity through participative democracy, influence of innovation, and freedom of thinking; something that socialism fails to provide.

Rebuttals

Wolff starts his rebuttal with why we cannot still question economies, when everything else is open to criticism (family, society etc.). He returns to the comparison between slavery, feudalism, and capitalism being one in the same and that the people of an organization should make the final say, not the few at the top motivated by self-interest. When Wolff makes a workplace point, Epstein returns with a sociological point suggesting socialism goes beyond an economic system towards a dangerous social system resulting in fear, power, and control. Epstein is still wondering why socialism is needed because the worker is free to make decisions inductively within their organization through assessing risk and reward – showing that capitalism for the worker in any organization is being in business for themselves through freedom and democratization.

Analysis

Although I may have a lean bias towards capitalism, Richard Wolff is a coherent voice for socialism especially within the economic sphere. He is one of the few that proposes a true sense of socialist-Marxist ideals through a critical-utopian lens to try and make systems better. Epstein, however, already beats Wolff to the punch reflecting workers rights through unionization – which is funded from a capitalist structure – is the greatest beneficiary to workers freedom, equality, and prosperity. In reference to workers unions and the Sherman Anti-Trust Act of 1890, capitalism has a built-in system of worker autonomy that fits with company and organizational objectives of profit, something socialism fails to observe. This is perhaps the inherent contradiction, or as I would call the Socialism Paradox of Marx and Engels (1969/1848) in the Communist Manifesto suggesting state centralization of taxation along with state control of private land. If that happens, where does the taxation come to sustain state centralization?

Ultimately, Wolff addresses some of the shortcomings of capitalism such as instability, some areas of inequality such as wages, and the crony capitalism that is pervasive in politics. Epstein returns accepting that crony capitalism is a problem that should be addressed, wages are more equal now than before, and that with freedom, individuals can change their circumstance; and finally, although capitalism may have some broken parts it is far more economically, socially, and politically stable than socialism could ever achieve and history reflects this.

References

Marx, K., & Engels, F. (1969). Manifesto of the communist party (S, Moore Trans.), Progress Publishers. (Original work published 1848).