Capitalism v Socialism: The Truth Without The Hype (EP. 377)

The truth about capitalism v socialism. And insights about redistribution and communism and the correct size of government. YouTube:
The truth about capitalism v socialism.

There are a lot of agenda-based partial truths and downright lies being tossed around about the capitalism v socialism discussion. With occasional self-serving comments about communism.

A few episodes ago, we spoke about personal finances, and the need for personal understanding and discipline. Today we are applying the same process, understanding and discipline, to public finances.

(N. B. With the weekly first Revolution 2.0™ YouTube video posted November 4th, and the podcasts continuing into their 4th year, this space is now a summary, more like my speaker’s notes, pointing to both the audio podcasts and the videos.)

Capitalism v socialism.

That is the subject of today’s 10 minute episode


Capitalism is the greatest wealth producing engine the world has ever seen. Out of poverty. A system wherein people, individuals or groups, including corporations, own the means of production and engage in voluntary exchanges of money for goods and services.

Profit: Selling things for more than it costs to make them, drives everything; capitalism, democratic socialism, traditional socialism, communism, no matter what the system is. Here we are not talking about taxes or what you do with taxes; we are talking about how you make the money and wealth that is taxed in the first place. You have to create wealth before you can redistribute it. That is done through generating profits. The gozindas have to exceed the gozoutas or nothing works in any system.

Socialism; so-called “Democratic” or not, means governments own the means of production. We don’t. Denmark is often used as an example of democratic socialism. But Denmark disagrees; their model is capitalism with heavy income redistribution. After seeing his country held up as an example in the 2016 US Democratic presidential debate, Danish Prime Minister Lars Løkke Rasmussen used an address at Harvard to explain the Nordic model to a US audience suddenly very interested in Denmark. “I know that some people in the US associate the Nordic model with some sort of socialism. Therefore I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”

Redistribution is not socialism. All societies redistribute wealth. All of them. If all a particular society did was to tax enough to provide roads, some would pay more for those roads than others. Most people are likely to use the roads disproportionately to their tax contribution. Some more, some less; that’s an example of redistribution. The question is not whether to redistribute wealth, but what is the proper level of redistribution.

Communism means you are not allowed to own your own business. Leading communist countries, including Russia, China and Vietnam, have all finally allowed free market practices to exist legally. Out of necessity. Communism has simply not worked anywhere. And never will. Those countries need free market profits to support their economies and to keep their one-party leaders in power. Capitalist engine supporting communist dictatorships. Capitalism v socialism.

What government does uniquely well. Not start with big or small. What should it do, cost, fair taxes. Answer.

Clear: Roads. First responders.

Fund but not provide: K-12, Utilities? Corrections?

Not at all: Manuf, service industry, the vast art of our economy, etc.

Stories can paint pictures and make points in memorable ways; this story is a case in point. Here we have a tourist from America, travelling in an Eastern European socialist country engaged in a conversation with a local. They are involved in a discussion about socialism, with the European touting how devoted he is to the concept. The American asks, “So, if you had 1,000 horses, you’d give away 500?”

“Of course,” was the reply.

“And if you had 500 sheep, you’d give away 250?”


Impressed, the American had one more question before moving on. “And if you had two goats, you’d give away one?”

“No!” said the self-avowed socialist with some emphasis.

“Why not? What’s the difference?

“I got two goats,” was the reply, ending the conversation.

Telling you exactly why the massive redistribution approach works only in theory. And then not all that well.We all have the personal responsibility to be financially responsible and to ensure that our government does the same thing. The same rules apply. Speaking of personal responsibility, this principle does not stand alone; the two main and interdependent principles at Revolution 2.0 are:

1. Personal Responsibility; take it, teach it and,
2. Be Your Brother’s Keeper. The answer to the biblical question, “Am I my brother’s keeper?” is a ringing, unequivocal “Yes.” There is no other answer.

Where do you stand? What are you going to do? Remember, it does not matter where you stand if you don’t do anything. You can start by subscribing to these episodes, and encouraging others to subscribe with you.

As always, whatever you do, do it in love. Without love, anything we do is empty.


As we get ready to wrap up, please do respond in the episodes with comments or questions about this episode or anything that comes to mind, or connect with me on Twitter, @willluden, Facebook,, and LinkedIn, And you can subscribe on your favorite device through Apple Podcasts, Google Podcasts, Spotify and wherever you listen to podcasts.

This is Will Luden. We’ll talk again soon. In the meantime, please subscribe and encourage others to subscribe with you on our YouTube channel.

Will Luden
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