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Statism and Capitalism Where Confusions Arise

22 September 2009 147 views No Comment

People often get social institutions confused, by confusing the role of markets, the role of government, and the role of private social institutions.

Capitalism:

Capitalism typically refers to an economic and social system in which the means of production (also known as capital) are privately controlled; labor, goods and capital are traded in a market; profits are distributed to owners or invested in new technologies and industries; and wages are paid to labor. (Wikipedia)

Statism:

A major government or state role in the direction of the economy, both directly through state-owned enterprises and indirectly through the state-directed economic planning of the overall economy. (Wikipedia)

It is often stated that we live in a mixed economy, one where statism and capitalism co-exist. In some markets there is little to no government intervention in others there are large interventions by the government. I can think of no markets where government intervention does not exist outside of ‘black-markets’, or more abstract concepts of a market such as trading favors in a relationship, but these usually fall within the private social institutions grouping.

Socratic DebateI think it is important prior to expressing an opinion on something as broad as capitalism (or statism) to think about what social institutions create the concept of capitalism (or statism) and which particular social institutions are part of a critique or complaint. Usually the complaint is relative to a small aspect of a social institution rather than it to its entirety (or simply a critique about human nature rather than any particular social institution). Aligning our rhetoric with what we are truly perceiving helps with social discourse.

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