I want to talk about who owns the means of production in society, since this is arguably the most important issue in political economy, and it so happens that socialism, capitalism, and many other systems can be defined quite neatly in this way. A century ago, when it was still acceptable to talk about systems of political economy other than capitalism and socialism, the definition I’ve proposed was one of the most common. You don’t hear it very often now, and there’s a reason for that.
Since 1945 the conventional wisdom across most of the world has insisted that there are two and only two possible systems of political economy: socialism on the one hand, capitalism on the other. That’s very convenient for socialists and capitalists, since it allows both sides to contrast an idealized and highly sentimental picture of the system they favor with the real and disastrous failings of the one they don’t, and insist that since the two systems are the only available options, you’d better choose theirs. This allows both sides to ignore the fact that the system they prefer is just as bad as the one they hate.
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Promoters of socialist systems like to pretend that if the means of production are owned by the government, they’re really owned by the workers, but I trust none of my readers are simple-minded enough to fall for that bait-and-switch tactic. In the same way, promoters of capitalist systems like to pretend that if the means of production are owned by stockholders, a little old lady who has five shares of Microsoft has just as much effective ownership as Bill Gates; here again, the old bait-and-switch tactic gets a hefty workout. In socialist systems, control of the means of production is kept within a small circle of upper-level bureaucrats; in capitalist systems, control of the means of production is kept within a small circle of upper-level plutocrats.
That’s not something either socialists or capitalists like to talk about, in turn, because once you start looking at who owns the means of production, it really doesn’t make sense to insist that the only choice your society has is either to hand them over to a small coterie of bureaucrats, or to hand them over to an equally small coterie of plutocrats. Most people, considering that choice, will quite sensibly ask why some other arrangement is out of the question—and that is not a question either socialists or capitalists want to answer, or even to hear.
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