A socioeconomic commentary



A communist system, very simply put, is the result, in Marxist “scientific” theory, of a struggle between the capitalists or the bourgeoisie (the owners of the means of production) and the proletariat by revolution to the end of common ownership of the means and operation of production for the benefit of all.

That unconstrained capitalism is damaging to society as a whole is well known. Neoliberal thinking (which still irritatingly persists these days) is that the economic forces of the market are the answer to all ills.

In fact, it is quite clear that these forces are the direct cause of most of society’s ills; they create an economic gulf between the owners of the means of production and everybody else.

The self-interest and sheer greed of the owners of the means of production—the capitalists, sucks up all the wealth, leaving everybody else dependent upon them. Capitalism and democracy appear to be contradictions.

Socialist oratory has great appeal to the dispossessed. It promises a more egalitarian distribution of wealth and that is what those who “have not” would like to happen, so “down with the capitalists, the bourgeoisie, take their wealth and distribute it to all.” “Let’s have a revolution!”

But having a revolution, dispossessing the bourgeoisie and divvying out their money doesn’t really work either, and bloody revolutions are certainly out of fashion these days. Should the workers take control of the means of production themselves? How to decide how much of anything to produce? Somebody has to do that, to decide how much production there should be to fairly satisfy the needs of all. Enter central planning and the command economy, that doesn’t work either—planning involves the future! So after the revolution and achieving what was perceived as a utopian state, the capitalists are gone, they are dressed in rags, the people operate the means of production to meet production quotas dictated by some higher authority, which also sets and enforces other rules for the management of society. A totalitarian state is established and individual freedoms are lost, all are forced to labour for the common good as determined by some all-powerful faceless bureaucracy and capitalists and the proletariat queue for bread together.

Neither end of the spectrum is very appealing, nor are they very good for society and the individual. On the one hand, the bourgeoisie take everything for themselves at the expense of everybody else, and on the other, there is no individual freedom or ability to think and decide for oneself.

Enter social democracy and John Maynard Keynes, a British economist who was of the view that a system could operate in which the state could reconcile the private ownership of the means of production with democratic management of the economy. The view of the social democrats was that the private capitalist sector should continue to operate but should be held in check by the state, and even as necessary become subservient to the needs of the state. Further, the social democrats established welfare states to ensure that those who could not afford should not be disadvantaged—the state would provide; housing, medical service, education—the basic necessities.

Some of the most socialist nations in the world aside from China, are Denmark, Norway, the Netherlands, Canada, Sweden and Finland. Most people would not recoil in horror at the results of operating socio-economic systems like these countries, other than perhaps the old Chinese communist system —they look like quite good places in which to live, don’t they?

There is a middle ground, but in order to achieve it, the government must know when and where to intercede in the operation of the capitalist/private sector and they must have the will and integrity to do so in a consistent and fair way to the benefit of the citizens, who elected them to positions in government to serve. It is within the role of government to ensure that things run smoothly and efficiently. For government to play bureaucratic games with its citizens and stop anything from happening rather than facilitating the right things to happen is a big mistake and is directly against the interests of the people.

It would be ridiculous to expect that all the citizens would know how to handle any particular situation, even less that they would all be able to agree on a single course of action.

The role of government in representing their interests is to ensure that the most appropriate action is taken for the good of all. It’s a balancing act and its success can only be judged by improvement in the overall quality of life of the people, and this is not achieved overnight. Capitalism and the operation of the private sector, the owners of the means of production, and that includes the ownership of land, must be allowed to make a profit and invest, but under the control of a government which itself continues to own and operate critical parts of the national “means of production,” and represents the interests of all—and there are many more of the proletariat than there are of the bourgeoisie!

Mike can be contacted at mawootton@gmail.com.


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  1. arthur keefe on

    Clear and thoughtful as ever. The problem in the Philippines is that there are rules to contain the excesses of capitalism (and feudalism), but they are rarely used, so capitalism is rampant, and so is poverty.

  2. A good overview of the two economic systems. The importance of the oversight responsibilities of the government in a capitalist economy often seem to be either overly burdensome or ineffectual in protecting consumers. The regulatory agencies are suppose to act as the referees between capitalists and consumers in setting rates, prices, environmental standards and ensuring minimal levels of service. In areas which are monopolistic by nature (one seller and many buyers) such as the energy sector, the regulatory function is essential to avoid predatory pricing and to ensure inclusive availability of the product to consumers. While the the framework for regulation in the Philippines is in place (we don’t need additional agencies or statutes) the effective, timely, objective (unbiased) and efficient application of existing rules is often missing or inappropriately applied. Perhaps new leadership which provides a role model clearly defining the role of bureaucrats in serving all citizens will help.