Soviet Socialism vs American Capitalism

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I lived long enough under pure socialistic (USSR) and hybrid (Ukraine) regimes. Now I observe the capitalism in the US for a while and my main conclusion is - both Soviet socialism and American capitalism failed to make their citizens happy, not to speak about Ukrainian post-socialistic pseudo capitalism.


Socialism is an economic and political system based on public ownership of everything in the country (territory, resources, means of production, capital goods) and central planning/distribution of the common wealth.
Capitalism is an economic and political system, which allows private persons to own everything in the country (territory, resources, means of production, capital goods), and is based on market economy (individual planning and gaining).

These two systems can be easily imagined like domestic animals living on the farm and wild animals living in the forest.
Wild animals are more at risk and can easily be eaten or die from hunger and diseases, but they have more freedom and benefit from that. The analogy is complete if you imagine that wild animals must always give a good part of their benefits to the Lord of the Forest. Somehow, it is not very fair - the risks and costs are born solely just by them and the profit should be shared.
Domestic animals live relatively easier - they take less risks/stress and of course they have less freedom, but their constant benefit from such life is that they are always fed, protected from wild animals and even cured. And only after, someday down the road they will be eaten by their Lord of the Farm. It is not very fair either, but at least clear.


Socialism is based on clumsy planned economy which is considered bad (despite China became the world's #2 economy).
Capitalism is based on market demand-and-supply economy which is considered good (despite US national debt to GDP ratio is around 131% in 2020).

So both systems have their deficiencies and advantages. The most notable ones - socialism always lacks for goods while capitalism always lacks for money. Just to give you a smack of socialism which you might have missed recently - all Americans experienced the pure socialistic issues when they couldn't buy the face masks, paper towels, disinfectants, etc., for any money because of coronacrisis in spring-summer of 2020.

Capitalism and socialism are basically two sides of the same coin. None of them is better than another. Both of them are just the tools of organizing the economic life of society which are intended (theoretically) to make everyone happy (or not unhappy, at least). People usually pay a lot of attention to the imposed meaning of the word which is just a cliché.


Capitalism and socialism cannot exist without each other like Yin and Yang. There are no pure 100% capitalistic or 100% socialistic countries in the world. Every “socialism” has to be a little “capitalistic” and vice versa, the question is about the balance of these two oppositions in any given country. As an example - all the government employees in the US including all the politicians live basically in the “socialism” which is provided by “capitalistic” working majority.

Historically, Lenin had to start the New Economic Policy in 1921 which provided some elements of capitalism in Soviet Russia, otherwise the USSR wouldn't survive then.
If Deng Xiaoping wouldn give to the Chinese some capitalism in the 1980s, most likely the Communist Party of China and China itself wouldn’t already exist in their current form.
USSR collapsed in 1991 because the elite of Communist Party has built a scarce 100% socialism for the people ("from each according to his ability, to each according to his labor") and comfort communism for itself ("from each according to his ability, to each according to his needs"). The elite's needs grew faster than country's Gross Domestic Product, the expenditures exceeded the incomes (just like in the USA now), the people were getting poor, internal and outer conflicts (the war in Afghanistan in particular) were expanding and the USSR ultimately fell apart.

The opposite example of insertion the elements of socialism into capitalistic economy I found in Republican Party’s Platform 2016 on page 32 - almost 46 million Americans were on food stamps then and 77 millions on Medicaid. This is not a capitalism.


Thus a capitalism in the US is already a little socialistic by nature, but there is something worse. I call it “guided" or "crony" capitalism.

Capitalism means that the market is free and all participants are on an equal footing. There should be equal competitive rules for all participants otherwise it is not a capitalism. However, free competition works in the US only at the very bottom and does not reach levels where businesses of the US elite work. Here is the list of industries which are highly depended on the government from unrecognized Crony-capitalism Index and you may know better which families (or party donors) are behind them in the US: casinos, coal, palm oil and timber; defense; deposit-taking and investment banking; infrastructure and pipelines; ports; airports; real estate and construction; steel and other metals; mining and commodities; utilities and telecoms services. I would also add here medicine, medications and education. Free competition exists at the retailer's level here and not higher. The elites just agreed on sharing the market and thus this is "guided capitalism".

From that point of view "crony" or "guided" socialism is not much worse than "crony" or "guided" capitalism. The "guided" (planned) economy was similarly organized in the USSR, but the elite appropriated the lion's share of a national product there. The well-being of any country depends much on fair distribution of the national wealth. Unfortunately, the national elite which is able to distribute really "fairly” is a rare case.

That's why there are more prosperous capitalistic countries than the US in the world. Anyone can find them on-line in various indexes - for example, Numbeo Quality of Life Index or Human Development Index. The U.S. is not in the top ten everywhere. This is real place of the US in the world as of now. Based on those indexes, the US has not the highest quality of life and it does not care much about the development of its citizens. I heard Americans calling the US a “work, work, work” country. It seems they live to work just for paying their bills. Medical ones in particular.


I think that medicine in the US is one of the most profitable businesses for the elites and seems to be the most painful topic for the Americans - around 66% of personal bankruptcies in the U.S. were due to medical issues in 2019. "Obamacare" seems a "good" thing just because everything else is even worse. Entire medical system of the US fails and coronavirus exposes that ruthlessly.

Everyone obviously will pay whatever for the health and this fact is smartly used by the US elites. The medicine is very expensive in the US (full capitalism). Formally it cures, of course, but rarely helps if the question is about therapy and not surgery. On the contrary, the medicine in the USSR was formally free (full socialism) and barely helped either. The medicine in Ukraine now is relatively inexpensive and barely heals as well. So neither cheap, nor free, nor expensive medicine is good. I haven’t found a fairly-priced and effective enough medical care system yet. The only thing I am sure of is that any working person should be able to pay his medical bills out of his pocket like he buys the food not involving an insurance company for that.

Americans want to earn more money and it's normal. And all their doctors and politicians do as well. This is where different issues of “guided" and "crony" capitalism appear in the medicine industry. Those who work in a competitive “capitalist” field in business can hardly earn more - their incomes are limited by the market which limits prices. The medical service market is ruled by the state and functions in a more protected field. It is much overpriced due to necessary (or unnecessary?) teaching of the students, trainings of the doctors, manufacturing the excessively expensive equipment, medications and licensing. Every beginning doctor is also forced to raise his prices to pay off the debts for the training and for his insurance. All those high prices are heaped on the people's shoulders and they have to pay them off anyway - either out of pocket, via collection agency or by using very sophisticated and confusing system of medical insurances which belongs to elites as well. No single dollar should be omitted!


I personally try to avoid meetings with doctors in the US because their services are highly overpriced and do not help. Even more - I feel completely helpless and financially unsafe in doctor's office because I know they may charge me in addition after months. One day I took my son to a doctor because he has got a high fever. We didn't have an insurance, I signed some papers, my son was examined, some tests were done, the pills were prescribed, I paid $125 for 15-minutes visit and we left. Basically, I paid for just the antibiotic prescription. I could buy the antibiotics in USSR (if I was lucky to find the needed) and in Ukraine (very likely - counterfeit ones) over the counter. That's the difference between guided capitalism, planned socialism and crony pseudo capitalism. As you can see nothing is good. And I understand the rules in the US - my son should better be examined before the prescription, doctors and nurses were highly trained and licensed, they used the expensive equipment etc, the A/C worked fine, but... If the price was twice less (subjectively) I would be paying happy.
After half a year I received an additional $25 bill for this visit. I didn't want to pay on principle, they handed my documents over to a collection agency and ultimately I had to pay an additional $35. Why? I asked one of my American friends about all that and he told me: "You have signed the papers and the lawyers would squeeze your money anyway. It is easier to pay. " The only question remained - what if they would bill me additionally for $125 or $225 instead of $25?


And there is no political market in a capitalistic sense in the US. The government (legislative and executive branches) determines the way the medicine and many other industries operate in the country, but governments at state and federal levels consist just of Republicans and Democrats in different proportions. Therefore, the political (and thus economic) market is monopolized by Republican and Democratic parties and they peacefully shared both markets until the presidency of Donald Trump occurred. Really, why to fight each other if everything can be agreed between the two of them? RP and DP have been ruling the country in that way for last 150 plus years and it was all right (for them) so far. Mr. Trump is really a very good provocateur and he managed to drive a wedge deep between two parties and, which is the worst, between the Americans. However, it's not so much about just Trump. He couldn't do that alone and within 4 years. So everything was ready for him and "guided " capitalism was already in operation for a good while before his enthronement.

Democrats and Republicans will clearly keep fighting and only people of the US can stop them just because there is nobody else to make that happen. Unfortunately, the Americans do not understand what is wrong with the country and begin to fight and even shoot at each other slowly for political reasons instead.

As a matter of fact, Americans are very busy with everyday material survival to look objectively at themselves and at the country's future. If there is no question "why the things go the way I don't like" - there is no motive to look for another way. The seeing of “another way” presupposes that you have understood everything about the current one. And the Americans haven’t, judging by the attitude to Presidential Election 2020. Voting for Trump or Biden does not change the course of the country and Americans will keep enjoying the malfunctions of guided capitalism while feeding their rulers with the fruits of socialism. One article of Thomas Friedman from The New York Times is called "Made in the U.S.A.: Socialism for the Rich. Capitalism for the Rest". Very correct.

That’s why all political disputes are useless and nothing can be done. America keeps voting for Republican or Democratic Party representatives which lead the country to a future that neither people of the US nor their rulers want to happen.



P.S. Dear Reader! I am very much interested in your opinion on the subject of this article. Please, write a comment or ask a question if you want to clarify something.
Yours,
Igor Chykalov