How I Define Socialism and Capitalism
Why my definition is different from yours and why it matters
To me, socialism means the democratization of the economy. Allow me to elaborate by giving an example of how elections used to work in Sweden in the 1800s (Swedish Municipal reform 1862):
In 1862, the Riksdag (Swedish Parliament) enacted legislation allowing industrialists the right to vote in local elections, and the following year, "parliament additionally decided that all local taxpayers should have votes in proportion to their tax payments." The class of voters was perhaps larger than ever before in Sweden. Taxpaying people and companies could vote, but poor people could not.
Yes, that is right, in Sweden people with more money had more votes. Let us contrast that with the basic principle of democracy: Each person gets one vote. That is how we elect representatives to parliament.
However, a lot of the most important decisions in any country is made in the boardrooms, inside large corporations. Here, voting works like Sweden in 1862: The rich get more votes than the poor. Ergo, the economy as such is not democratic.
The most obvious example of making the economy more democratic is from Codetermination in Germany:
Codetermination in Germany is a concept that involves the right of workers to participate in management of the companies they work for. Known as Mitbestimmung, the modern law on codetermination is found principally in the Mitbestimmungsgesetz of 1976. The law allows workers to elect representatives (usually trade union representatives) for almost half of the supervisory board of directors. The legislation is separate from the main German company law Act for public companies, the Aktiengesetz. It applies to public and private companies, so long as there are over 2,000 employees. For companies with 500–2,000 employees, one third of the supervisory board must be elected.
It means half of the voting power in corporations is given to workers. That represents a democratization of the economy as it means rather than those with money to buy stocks get to make all the decisions in a workplace, the ones working there get to have a say as well.
This is an old system going back to the Coal and Steel Codetermination Act of 1951. In other words, the German economic miracle managed just fine while being very socialist. And Germany is not alone in this system. Many other countries have variants of this approach, such as the Nordic countries.
The fact that I define socialism as both political and economic democracy means that the USSR, Mao's China and the old East Block don't fit my definition of socialism. Why? Because neither of those countries had either political or economic democracy. Citizens could neither elect their leaders nor could they participate in decision-making in corporations.
Your Definition of Socialism is Wrong!
I know many will accuse me of inventing my own definition and give links to dictionary entries to "prove me wrong." Here is where you go wrong: Dictionaries are descriptive in nature, rather than prescriptive.
What do I mean by that? Itamar Shatz, PhD actually has a very good discussion of the fallacy of appealing to dictionary definitions when debating the meaning of a word:
dictionaries are descriptive in nature, rather than prescriptive, meaning that they attempt to describe how people use the language, rather than instruct them how to do so in a definitive manner.
In fact, dictionaries tend to contain multiple definitions of a word because words mean different things to different people in different contexts. The same applies to a word like "socialism." Socialism means different things to different people, and the meaning has also changed over time. There is not a single socialism but many. It is akin to Christianity. There isn't a single way to be Christian. There are orthodox, catholics, protestants, which are further subdivided into even more faiths.
Because there are so many schools of thought on socialism, I choose to define what I mean by it. Thus if you see me advocative socialism, you know what I am advocating. I am not advocating a USSR style system. Some consider that socialism, but I don't.
Why should you care about my definition of socialism? Well, you cannot criticize me for advocating something bad, if you don't even know what I am advocating. And my choice isn't arbitrary. My definition is in fact what most socialists in democratic countries have long advocated.
I am a Pragmatic Moderate Socialist
My role models are not tyrants like Mao or Stalin but rather people like the longest serving prime minister of Norway, Einar Gerhardsen. He was a commit to socialism, but strongly opposed to any form of totalitarianism. A strong advocate for democracy, freedom, and equality while always having a pragmatic approach instead of a "my way or the highway."
I feel much the same. Ideology will not always match practical reality. I don't think you can ever build a fully socialist society. There are too many practical obstacles to that. Rather, I see it as an aspiration goal. Something to work towards, but not necessarily something every achieved. In a small country like Norway, you are not going to get investors and companies established if workers made all the decisions in corporations. Nor would anyone put money on the line to start a business if they didn't have a sizable influence on how that business was run. Hence, one must find a pragmatic balance.
What is possible and what is the right thing to do will depend heavily on political and economical realities in the rest of the world, as well as the state of technology. The AI revolution, for instance, will likely make socialism a more pragmatic choice than before, as humans will get replaced in the workplace.
How I Define Capitalism
On the flip side, I don't define capitalism as many capitalism fans today. Many conservatives and libertarians today define capitalism as freedom, democracy and free markets. And that is totally fine if you define capitalism like that. But know that when socialists such as myself criticize capitalism, that is not what we are attacking.
While I have zero love for Karl Marx, he did basically coin the term capitalism in a way that is still relevant today for socialists. To Karl Marx, capitalism was not about markets or trade because those things had already been going on for thousands of years. He would not have coined a new term for the social and economic system he saw emerge in his own time, if it had already been there for 3000 years.
Rather, he used the word "capitalism" to label the unique characteristics of the society that had evolved in his time. In earlier eras, markets and trade still existed but the mode of production was entirely different.
Humans worked in farms or workshops. Normally, you would help out the head of the farm or workshop. For a workshop, that meant being an apprentice. Once you learned the trade well enough, you would set up your own shop. Likewise, sons would work at the family farm before establishing their own farms and family as they got older.
In other words, there was a sense of progression in this society. Capitalism turn that upside down. Instead of working for a small workshop to learn a trade you got employed by a capitalist in a large factory. You did not work as an apprentice. There was no progression. You stayed a wage laborer your whole life. Always below somebody else. In the old society, people could aspire to be their own boss, either as head of a farm or a workshop. This certainly did not apply to everyone, but often enough that people felt alienation with this new factory system.
Suddenly massive amounts of capital were what mattered rather than the skills of a master craftsman. Whoever owned the capital rather than the crafting skills dominated all others. This change caused enormous growth in wealth and productivity due to the efficiency of factories, but ironically workers ended up much worse. They got poorer and got fewer rights.
Social upheaval, revolutions, and violence in the 1800s happened for a reason. Regular people got angry about seeing themselves get poorer while a small rich elite got tremendously rich.
It is this development socialist wanted to criticize. They gave this new society where a tiny rich elite controlled the means of production and turned everyone else to near slaves as capitalism.
This characterization is of course outdated today. Workers in the West today are hardly slaves. But a lot of the good conditions workers enjoy today are the result of socialist movements fighting for workers rights: the right to unionize. Better pay. Better work environments. In other words socialists saved capitalism from itself. It reformed it enough that it could benefit the vast majority of people.
Socialist criticism of capitalism has to be understood in this context. We are criticizing a system where wealth, income and economic decision-making is concentrated on a small rich elite. The antidote to this is more economic democracy such as the German codetermination system.
Notice how in my definition of capitalism, most of the things pro-capitalist fans cherish isn't included: Democracy and choice. Socialists want democracy and choice as well, so we don't see that as a feature of capitalism.
Nor is market economics a key part. It certainly is a part of capitalism. But it is not the thing we are most critical of. The point isn't to have planned economics for everything. Most socialists today realize that planned economics might work well for education, health care, prison, firefighters, police, military and many other things. But the government should probably not make the toilet paper or bread. Or rather, it should not do so in a planned economic sense.
Why Are You Writing This?
I get tired of debating what is meant by socialism and capitalism. I don't think we should be hung up on the words themselves, but on the ideas. When I say I am critical of capitalism, you should know what I mean. Instead of endless debates about what a world should mean, let us just accept that as people we define words differently and that is fine as long as you understand what the other person means.
If you define socialism as the USSR, then we can mutually agree that socialism is bad. But it is rather pointless to debate socialism with a modern-day socialist if you insist that it should mean a USSR style system. Your opponent isn't going to support such a system unless they are a tankie.
And when you say you advocate capitalism, let us at least figure out what parts we can agree on. You may be surprised to learn that many of the things you associate with capitalism is not opposed by socialists. In fact, many conservative or libertarians may even agree that a heavy concentration of wealth within a small rich elite might actually be kind of bad.
It is ironic how many conservative claims they have no problem with inequality or rich people, and yet they spend a lot of time railing against the elite and glorifying the common "real American". People may not disagree as much as they think. Instead, people are wedded to tribal ideas.