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Modern Socialism: The Difference From Socialism, Capitalism, and Communism

Updated on February 12, 2013

First off, what is Modern Socialism?

That's a tough question to answer succinctly, actually. The best way I can explain it is that it's an economic philosophy that revolves around shared sacrifice, equality for all, and a vital social safety net. It is not an economic system. Rather, it is a set of ideals and policies that are put forth by lawmakers, such as unemployment benefits, welfare programs, universal healthcare, etc. The underlying economic system is capitalism. Sound familiar? Well, it should because it is what's known as a social democracy. It's also arguably what we have in America. While our system doesn't go as far as other nations (ex: universal healthcare), it is quite similar.

Then why does socialism have such a negative connotation in America?

The main reason is that many confuse socialism for communism, which is actually a subset of the old definition of socialism, or the classic version.

Classic socialism is an actual economic system, which was created in opposition to capitalism. The goal was to have a state-run economy that created goods based upon the need from the populace, rather than the need for profit, like in capitalism. Sadly, communism became the poster-child for socialism and thus, the two words became interchangeable. In reality, it was not representative of the ideals of socialism, as it usually impoverished the working class and obliterated human rights. But, here's where we come to modern socialism.

Capitalism vs Socialism

The war between these two economic systems has been raging on for more than a century. Socialism was created in direct opposition to capitalism and its supposed evils of greed. Arguably, the war is over. Capitalism has taken its place as the predominant economic system, due in large part to the emergence of an economic superpower, the United States. While we were a beacon for capitalism in the world, we also passed social programs to defend against capitalism's downsides, such as income inequality (which still lingers today), poverty among the elderly (Social Security and Medicare/Medicaid), poor children and families going hungry (food stamps), and people inevitably becoming unemployed at certain points in their lives (unemployment).

The bottom line

The main point of this article is to point out that modern socialism is nothing to fear and has nothing to do with communism, fascism, or stateism. It's a common misconception here in America, but really needs to be put to rest. If you polled most Americans on the individual aspects of modern socialism, I'm quite sure you'd find a lot of support for them. But, if you were to use the word "socialism," the numbers would drop drastically, even among Democrats.

As a country, we have embraced many social programs. Even Republicans are supportive of the major social programs, albeit not as much as Democrats, and they also want to cut benefits to a certain degree, but the programs are here to stay. We have become a social democracy without even knowing or acknowledging it. The fact is that's okay. It helps us take care of our sick, elderly, destitute citizens, while preserving the economic engine that is capitalism.

Long live the social democracy!

The journey ahead - an opinion

As a nation, we are becoming more and more progressive. ObamaCare, the landmark achievement for President Obama, extends healthcare to the nearly 40 million uninsured and sets the stage for further improvement of our healthcare system, which is quite inferior compared to other civilized, industrial nations, such as the United Kingdom, France, Germany, and Canada. Our tax code is also the most progressive it has been in a while since the bush tax cuts were extended for middle and lower class Americans, but raised for people making over $400,000 ($450,000 for families).

I see America passing some form of universal healthcare in the future, whether its by expanding Medicare coverage to include everyone, starting at the age of 18. I also see a housing plan put in place. We have far too many people homeless and hungry in this nation. It seems unconscionable that we can spend more than the next 10+ countries on defense and have so many problems at home that are unfixed.

We have seen capitalism when it is unrestricted. The financial collapse of 2008 was a direct result of the reckless and unregulated nature of our economy. Ayn Rand's prodigy, Alan Greenspan (former Chairman of the Federal Reserve), even admitted after the collapse that he was wrong. Our economy could not self-regulate. The human need for greed is great and capitalism only spurs that. But, capitalism has also been great for increased standard of living among all members of society. It has its pros and cons, but one thing it should never be is unregulated.

So, in my opinion, I see America forging forward into a more progressive future where we, as a nation, make it a priority that no one goes hungry, no one sleeps on the street, no one goes bankrupt over healthcare costs, no one gets gunned down in a school, no one is discriminated against because the color of their skin, and that no one is denied the right to marry based on their sexual orientation. That is the future I see.

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      Howard Schneider 4 years ago from Parsippany, New Jersey

      The form of socialism that we and other countries adopt are simply controls on the capitalist system. Capitalism is a system of economic competition where greed often predominates. Social programs protect citizens from capitalist excesses. Karl Marx foresaw the end game as a communist revolution. He never envisoned what FDR and others have done since the 1930s. Strict systems of all sorts eventually become oppressive. Our hybrid system curbs these excesses. Socialist and communist are just name calling that Republicans spew to gain votes and scare the public. Great Hub, Steven.

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      joshua white 3 years ago

      I believe, as it stands right now, we do not have a true capitalist system. True capitalism is not regulated by government as it is today. The essentials of true capitalism are having a free market, private property, and letting people voluntarily help one another. What we have today is more of a corporate oligarchy. You do however make a good point in saying socialism has changed dramatically in the last century or so. In conclusion you talk of not demonizing socialism so lets not demonize true capitalism.

    • pramodgokhale profile image

      pramodgokhale 2 years ago from Pune( India)

      Sir,

      I am an Indian and after WWII ,global political map had changed and in Asia and other Continent nations got freedom and began their development and due to poverty and backwardness they opted socialism as a way to prosperity.

      You rightly say that confusion socialism with communism same is applicable to democracy to capitalism . Capitalist is not a product of democracy but it came out from industrial revolution in England and British empire.

      Civilized nations or societies in Europe actually robbed and plundered Asia,Africa. Their empire flourished due looting of resources and slave trade .

      India had mixed economy for development but corruption and bureaucracy in India made under British empire could not understand creativity and productivity so our mixed economic model also failed.

      problem with capitalism is monopolies, media management, unfair practices , to gain business.

      Socialism assured lifetime employment and subsidies but people did not deliver what government needed for development .

      In Indian context , we need to select a model to build ourselves.

      pramodgokhale

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