Scott Hughes: Socialism vs. Capitalism

Recently, during a discussion about politics that I was having with another individual, I asked the man what he thought Socialism was. His reply did not surprise me at all because what he said was what I’ve heard many times before. We are in the South East and it seems that ideas like Socialism, for whatever reason, are taboo. I responded to him objectively and told him what Socialism really is in regards to commerce and the workforce.

His definition of Socialism was something like this: “It’s when the government tells you what kind of job you will have, how many children you can have, who to marry, where to live, etc.” I had heard that before so I wasn’t at all surprised. My response was “that sounds like North Korea on steroids.” In fact, many people believe that and the “establishment” wants it that way. Any idea that is progressive and promotes equality threatens the existing establishment and they will do whatever is needed to crush the opposition.

The truth about Socialism is this. Socialism is when workers compensation is directly correlated with their output or production. I’m going to give examples of both Socialism and Capitalism figuratively to show how they differ. John opens up a manufacturing plant that makes widgets. The factory is located in NC. and has 40 employees. All of the employees are paid minimum wage. The first year, the company’s net revenue is $100,000.00. Three years later, the net revenue has increased to $400,000.00 but he still has 40 employees and they all still make minimum wage. The increase in revenue has totally gone to John and now he is a very wealthy man. Later, John decided to make his company public and now it’s on Wall Street. He now has a board of directors and a CEO. John just sits at home and counts his money. The CEO’s loyalty and responsibility is with the shareholders and not the employees. It is determined that the widgets can be manufactured at almost half the cost if the factory moves to Mexico. So the company moves and the 40 underpaid employees are now unemployed. They would have left that job years ago but there were no other jobs available so they were stuck making minimum wage. This is a clear example of Capitalism.

Now let’s look at Socialism. John builds the same manufacturing company in NC and hires the same 40 employees whose starting salaries are all minimum wage. The first year’s revenue is $100,000.00. Three years later, revenue is now at $500,000.00. John’s profits (personal income) has increased but the 40 employees have larger salaries now. The employees’ salaries are directly related to the output, or net revenue. John doesn’t have a choice. The harder the people work and the more productive they are, the more money they will make. The factory can never be moved to another country. If it were to be moved, the current employees with either be paid for nothing or would have to move to Mexico with the factory. So all of the employees keep their jobs and no longer have to deal with ridiculously low salaries. This is a clear example of Commerce Socialism.

When comparing the two different models, it’s clear to me that the Socialist model is much better for the employees of the company. Because of Socialism, the employees make more money, will keep their jobs, and will increase their spending. This will help the economy because of the increase of money injected into the system. Now that you know what Socialism really is, does it sound that bad? There is no government Czar telling you how many babies you can have and you won’t be told where you have to work. What will happen is that unemployment will decrease to the point of almost nonexistence and workers will be paid in a fair manner and no longer be exploited. Now you have the correct definition of Socialism. What you do with your knowledge is totally up to you but think of how our country is now. Think of the unemployment and the poverty. Think of all those glass ceilings. Think of how much better things could be. Now remember all of these things when you go to cast your vote and you may be able to finally make things better.


Scott Hughes
Henderson, NC
Former Vance County Commissioner

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