Analysis of economic systems from the perspectives of Capitalism and Socialism in the last 50 years, has revealed that both ideological frameworks have saliences that have worked. There has been an unpalatable tendency by ideologues to throw babies with water. For example, especially in US politics, Conservatives, on one hand, view anything that has a word “Socialism” in it as undesirable. Democrats, on the other, convulse when they are confronted with claims of being socialists. This is because, historically, the West (US) has been at loggerheads with the East (USSR-Russia), a political-economic baggage brought forward from the Cold War period (1945 – 1991). 

Critical review, however, shows that some elements of Socialism have worked very well in the West and many elements of Capitalism have worked very well in the East. In fact, Western democracies have adopted several features of what Marx and Engels called “Scientific Socialism.” These include a heavy graduated income tax; centralization of credit in the hands of a state national bank; centralization of communication and transport means in the hands of the state; extension of factories, lands, and so on, into state’s ownership; provision of free education to children; eradication of child labor and the combination of education with industrial production.    

Moreover, Marx and Engel’s economic philosophy centered, largely, on specific social maxims such as, “Equal work for equal pay” or “Kingdom of freedom.” They saw the idea of specialization in Capitalism as restrictive. Canada, for example, has relied upon some of these mantras in its national dialogue and law. The Ontario Employment Standards Act is based on a socialistic principle of “Equal work for equal pay” and the Canadian Income Tax Act uses the ideals of graduated tax regime. Land, even in the US, is in the control of the federal government. And, indeed, almost all Capitalistic nations have tended to frown upon child labor, and this includes the UN’s International Labor Organization (ILO). 

Capitalism anchors on freedom. This can be freedom to transact, to own property, to trade, to deregulate and even freedom from government controls. Specialization is a capitalistic concept and has borne wonders in the spheres of productivity and economic self-actualization. Deregulation of general production and regulation of contract have, generally, led to prosperity in many Capitalist countries, including in Communist China. 

Thus, in principle, the world is in a bipolar ideological system of Capitalism and Socialism, but in practice, it thrives by the combination of the saliences of these two ideological blocs. A new system of categorizing the two dominant world political and economic systems (Capitalism and Socialism) should be devised. This will eliminate the ideologue overtones and distrusts associated with Socialism.  

The new term is CAPISOLISM (acronym for Capitalism and Socialism). Capisolism combines the features of both ideological systems in a workable and practical reality. For pure Capitalism or “an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state,” has not existed anywhere. And Socialism or “a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole,” has never been fulfilled anywhere, either. What has happened has been a hybrid form or a combination of the two systems. Indeed, trade, industry, production or distribution can either be controlled by the private owners or by the state, depending on what is practical and profitable under the circumstance. This, in fact, is what obtains in reality. In Canada banking is controlled by the federal government while in the US, banking is, largely, in private enterprises’’ control. The hallmark of Capisolism is that both the private and the public sectors have the freedom to trade, produce and distribute in a synchronized and competitive free marketplace.  

The role of government in this arrangement, is to continue to be in charge of enacting legislation that regulates the freedom of contract and the equalization of opportunities in trade a s well as in granting unfettered accessibility to resources. In development, both capital and social imperatives matter.

By Charles Mwewa 

Dean (Paralegal and Legal Department) for Ontario at Herzing College.