If there’s one thing Congresswoman Alexandria Ocasio-Cortez is good at, it’s stirring up a digital storm with socialist social media commentary. The latest viral moment came after an AOC Instagram video where she attacked capitalism and argued that most people don’t actually support it.
“Let me tell you a secret,” AOC said in a (kinda creepy) whisper. “Most people don’t really know what capitalism is. Most people don’t even know what socialism is.”
“But most people are not capitalists, because they don’t have capitalist money—they’re not billionaires,” the congresswoman concluded.
AOC does the Biden whisper pic.twitter.com/1MJnJlJIru
— Jewish Patriot 🚛 (@MAGAJew2) March 18, 2022
It’s worth engaging with AOC’s claims. So, let’s define capitalism and socialism, something easier said than done.
First, the formal textbook economic definitions.
Capitalism is defined as a system where the means of production (i.e. factories) are owned by the private sector and socialism as a system where they are controlled by the government. However, in daily political discussion in a world full of mixed economies, regulations, welfare programs, and other ways we have neither a free-market nor textbook socialist control of the economy, these formal definitions aren’t particularly useful.
I think it’s more helpful to think of socialism and capitalism as value systems.
One of capitalism’s defining values is voluntary exchange. Under free-market capitalism, people should be free to make any trade or exchange that two parties agree on.
For example, I should be able to work for $10/hour if I think that’s a good opportunity for me and my local Starbucks is willing to employ me at that wage—not have that exchange prohibited by the government in the name of a “fair” minimum wage.
I should be able to buy whatever healthcare insurance plan I want or none at all, not bound by a government requirement to purchase health insurance or forced to buy expensive, expansive coverage that requires maternity coverage even for men like myself, as Obamacare did.
I should be able to exit and enter an occupation with minimal government barriers and then succeed or fail on the merits of my enterprise, not arbitrarily blocked from competing in certain sectors by expansive licensing schemes and massive regulatory burdens.
I should get to keep as much of my own income and property as possible, with only minimal taxation to fund essential societal services like national defense, the court system, policing, and so on. I shouldn’t have my incentives to earn and produce destroyed through heavy income taxation. Nor should my wealth be confiscated and redistributed against my will by the government in the name of “redistribution” and “equality.”
You get the idea. At its core, free-market capitalism is defined by voluntary trade, private property, and economic freedom.
Socialism, on the other hand, is defined by coercion and the preemption of voluntary exchange, all in the name of the greater good.
You can’t work that job because the benevolent government doesn’t think it pays enough. (Of course, the alternative is $0.) You must buy health insurance because your benevolent betters think that’s what your priorities should be. You can’t operate your business like that or enter that industry because the very smart folks in charge, like AOC, have other plans for you.
Congressman Barney Frank famously said, “Government is simply the name we give to the things we choose to do together.” Ironically, the opposite is true.
The big government economic schemes favored by today’s socialists are essentially things favored by some then forced onto all. After all, if everyone actually agreed that no one should work for less than $15, you wouldn’t need a law prohibiting it. If everyone was actually on board with paying for other peoples’ healthcare, it wouldn’t need to be forced through tax collection, you could simply raise the money voluntarily.
You get the idea. At its core, socialism is an impulse toward centralized control and against personal choice and private property.
Congresswoman Ocasio-Cortez might actually be right that most Americans don’t really understand what capitalism and socialism are. After all, most Americans can’t even correctly name the three branches of government. Our (mostly government-controlled) education system is… not doing so great. But I’m not sure AOC can really define capitalism and socialism either.
Meanwhile, I’m quite sure that if most Americans did understand the differences between these systems, they would favor voluntary exchange over centralized coercion all day.