Capitalism or Socialism?

The Socialist Party is the only party whose sole object is the replacement of the present social, economic and political system (capitalism) with a fundamentally different system (socialism). Socialists are men and women who understand and work for such a change in society.

Capitalism has existed for only the last four or five centuries. During that time it has spread from parts of Europe to every corner of the world. There are still pockets of previous forms of society-feudalism, tribalism, even slavery-but they are steadily being squeezed out by the incursions of capitalism. The roots of socialism may be traced to ideas first formulated in ancient civilisations, but as the abolition of class and private property society it has remained an ideal and not an activity. Indeed, it is only in the last hundred years or so that the material conditions for the establishment of socialism as a world society have been developed, making it a practical alternative to capitalism.

One of the basic features of capitalism is that the means of wealth production and distribution (land, factories, offices, transport, etc) are owned by individuals, private or public corporations or the state. The various forms of ownership have evolved and become more complex within capitalism. False claims have been made that, because certain industries have been “nationalised” or whole countries governed by regimes with the label socialist or communist, therefore socialism has been introduced. This is not the case; such reforms of capitalism change only its surface features, not its basic substance.

With capitalism goods and services are produced for sale in a market with a view to profit. Where it is not feasible to form a market or seek a profit, goods and services may be provided “freely” at the point of consumption. While some capitalist production is to meet human needs at a price, capitalist advertising creates wants that the market can then satisfy. With socialism production will be directly to meet human need, each person or group determining their own reasonable needs in a social context. There will be no buying or selling and no calculated exchange, but plenty of giving and taking.

Capitalism requires that access to goods and services be by “effective” or “economic” demand-generally, no cash, no carry. Exceptionally the state or local authority provides “benefits” in cash or kind, and charitable organisations give other handouts. Socialist society will mean free access, although some collective action may need to be taken in the few cases where access that is too free could result in harm to the individual or the community.

The profit system requires a class of owners of the means of wealth production and a much larger class of non-owners. The one class represents “capital” and the other “labour”. Of course this is the system in its crudest manifestation: in practice it has evolved very sophisticated forms of exploitation and presentation. Society is said to be composed of three or more classes, such as upper, middle and working. Workers may be given a “stake” in capitalism through ownership of small packets of shares. Socialism rejects the idea and the practice of opposed classes consisting of owners and non-owners. All persons will stand equally in relation to the means of wealth production in socialism.

Allied to the two-class division into owners and non-owners in capitalism is the two-class division into employers and employees. Again there are subtleties: employers may be individuals, corporations or the state; employees may be in employment, seeking it or retired from it. The self-employed are a marginal group. With socialism there will be no employment; work will be done on the basis of its product being needed, not because an employer can make a profit by “supplying” it.

The key market in capitalism is the labour market, where workers are forced to earn their living by selling their labour power to an employer. With socialism markets, like money, will be unnecessary and disappear.

Capitalism requires much work to be done that serves no useful purpose and is necessary only to keep the profit system going. Activities such as banking, insurance, selling, preparing for and making war, are only a few of many examples. Estimates of the proportion of current work that is necessary only to capitalism vary from 50 to 90 percent. With socialism no useless or harmful work need be done, although no doubt some people will choose to do things that others will see as without purpose. Artistic and creative endeavours may be expected to flourish, no longer confined and distorted by the profit motive.

Co-operation not competition

Capitalism requires individuals to compete with each other in various ways. It fosters a culture of winners and losers. Businesses compete with each other for the biggest possible share of the market-winners sometimes capture the whole of a market. Workers have to compete for jobs, the losers being the unemployed. Capitalist sport asserts that winning isn’t the main thing-it’s the only thing. By contrast socialism emphasises co-operation. While some forms of enjoyable and developmental competition may well continue (such as games and tests of skill and knowledge) no “losers” will be deprived of decent living conditions or be excluded from benefits that society can provide.

Today society tends to be divided into a few leaders and many followers. The shepherds need the sheep and the sheep need the shepherd. Whether in the workplace, the political arena, the media, or elsewhere, the powerless majority defer to the powerful minority. In socialist society people will no doubt continue to vary in their abilities, strengths and characters-differences will be valued but not exaggerated. It may be useful for some individuals to take highly specialised roles, but they won’t become permanent or powerful leaders.

Capitalist organisations are mostly hierarchical, consisting of a few people at the top who give orders and the many lower down or at the bottom who take them. Communication is usually top down. Socialist organisations will be mostly lateral, meaning that all participants will work according to a democratically agreed plan. Communication will be free-flowing, not one-way.

Politics today involves the mass of the electorate choosing at periodic intervals professional politicians as representatives who will govern them for the next few years. With socialism delegates will play an important part. Wide-ranging issues affecting large numbers of people will be fully discussed and decisions democratically taken. Local issues will require less formality and decisions can be based on trust. People will not be governed; things will be administered.

The capitalist world is divided into nation states, some independent, others overtly combined into blocs for some purposes. Enmity is built into the capitalist structure. There are trade wars, preparation for hot wars, and actual hot wars. While some supporters of capitalism pay lip-service to the idea of a world community (and some services, such as weather forecasting, are already organised on a world-wide basis) it is only with socialism that there will be a meaningful world community, with different but non-conflicting cultures.

Education today is aimed at different ability groups. But, more significantly, it is separated into a superior kind for the elite and a basic kind for the mass. Elite education means higher staff-student ratios, better equipment and facilities, but above all the instilling of a belief that a class-divided society is the natural order of things. Mass education is starved of resources and aims to turn out productive but docile wage-slaves and consumers. By contrast, education in socialism will have no narrow class-dividing purpose. It will aim to develop the talents and interests of all. Initially socialist education will help to solve world problems of ignorance, poverty, environmental degradation, and so on. We can only speculate on how later education will enable the further development and progress of the human race.

Today crime is a big problem. But most of it is to do with private property. To keep the buying and selling system going, people are encouraged to want more and more things. But they are often not able to get the necessary money legally. So it’s not surprising that some of them break the law by stealing. Since doing this on a large scale would seriously endanger the profit system, there has to be a complex apparatus of police, law courts, prisons and the rest. The abolition of private property would not necessarily mean the abolition of all we could call crime, but certainly a large part of it. Even if the occasional murder still takes place, the person committing it will merit treatment and support rather than the punitive measures usually imposed today.

One consequence of capitalism that has become increasingly prominent in recent years is the many ways in which the pursuit of profit has resulted in damage to the environment. Some of the main forms of damage are air and water pollution, acid rain, deforestation, and global warming. Socialists welcome the attention that “greens” have drawn to the problem, but disagree with those among them who believe that the problems can be solved within capitalism or who want to go back to a pre-industrial era. In a socialist world high priority will be given to repairing the damage that the profit system has caused to the environment. Production solely for use and access according to need will be in the context of using the world’s natural and other resources in careful and sustainable ways.

The World Socialist Movement brings together men and women who have a committed, closely argued and well researched case against capitalism and some idea of at least the fundamentals of the system that will replace it. None of us knows exactly what the future will bring. But we do know that we can help to shape that future by putting the achievement of socialism, rather than reforms of capitalism, at the top of the agenda.



The most developed form of class society

Private (including state) ownership of the means of wealth production and distribution

Production for profit

Access by economic demand (payment, with some handouts)

Basically two classes: those who own and don’t own the means of wealth production

Employment (employers, employees, unemployed and retired)

Markets (buying and selling) for most things, including labour

Activities necessary to support the profit system (banking, insurance, salespeople, etc)

Emphasis on competition

Leaders and followers

Mostly hierarchical organisation (giving and taking orders)

Periodic elections to choose professional politicians

Government of persons

Nation states, wars, armed forces

Education for elites and for masses

Crime (mostly property), a legal system to uphold private property rights

Environmental problems (pollution, depletion of natural resources, etc) caused by profit seeking


A form of society without classes and class property

Common ownership of the means of wealth production and distribution

Production to meet human need

Free access, each determining their own needs (in social context)

No classes: all persons stand equally in relation to the means of wealth production

Work (all those fit enough volunteer services as preferred and needed)

No buying, selling or exchange (only giving and taking)

No wasteful activities necessary only to support capitalism (banking, insurance, salespeople, etc)

Emphasis on co-operation


Mostly lateral organisation

Elections as required to choose delegates

Administration of things

No nation states, wars, armed forces

Education for all

No property crime, any residual crime (e.g. murder) dealt with humanely

No environmental problems caused by profit seeking

Leave a Reply