The Core of Any Society is the Ownership of Property.

My intent is not to be professorial in addressing these terms. But there are many in America that have no clue to the real meaning of these different economic models.

Throughout human history, WEALTH has always been determined by the property and individual owns or controls. In real terms, property is land and building, e.g. real estate, the natural resources upon or below the surface of that land, and in today’s world the ownership of commerce such as stocks, mortgages, notes and capital assets of a business. 

Wealth is an asset that on its own generates more wealth over time. Personal property such as your car, electronics and such are not considered wealth in this discussion. They are just things and typically depreciate and do not generate more wealth.

In more recent history one’s labor has been considered a value (capital) that could be used in exchange for acquiring wealth. However labor capital is individual and resides with the individual and is not passed onto the next generation or exchanged separate from the actual labor performed. However, when that labor is exchanged for monetary compensation in producing a product or service, the owner of the product or service entity now owns that resulting value of that labor capital. Now when the owner of that product or service then exchanges it at a value greater than that it paid for the product or service, that product or service generated wealth to the owner, not the laborer, thus it is considered the real property (wealth or capital) of the owner(s).

Image from the PBS Masterpiece production of Downton Abbey. This program clearly defines the genesis of and carry over of the old feudal system by which those who owned the land were the lords over the people on that land (landlord) or near that land in the small villages that support the lord. Though this drama is during the early 20th century, such a system is slowly resurfacing both in Europe and in the USA due to the huge wealth inequality we are witnessing again.Similar to that time Downton Abbey is taking place. Image for illustrative purposes only.

For the past several hundred years wealth has been controlled under several economic and property ownership systems: Please note that all are Capitalist models, except for Communism.

Libertarian:

There are two subsets of Libertarians: 1) Anarchists that eliminate all governance and regulation, even self-regulation in the ownership, transfer and distribution of wealth.  It is basically a free-for-all system and when an individual captures or acquires wealth, they must hire, as individual contractors, security forces to protect the ownership of that wealth from others who want to capture it. 2) Anarcho-Capitalists, or also known as laissez-faire capitalism, which also eliminates all government. However typically these capitalists will organize and control society to protect their wealth. They may use private security forces to secure that wealth, as well as other services to protect themselves. The capitalist provide all needed services to the people for a price. If an individual cannot afford the price, then that individual can do without. No one else should give up any of their wealth to help those who own no wealth. It is Darwinian Capitalism, survival of the fittest economically. This is Ayn Rand’s philosophy that so many in the Republican Party in America advocate.

Free-market Capitalism:

This is the purist form of laissez-faire capitalism. The market is always pure and right. It shall adjust based on human need and desire. There is no need for any government involvement in that the market will self-regulate for its own survival. Governments are only needed for the security of wealth and the arbiter of disputes. Products will be safe for consumers because if they are not, the consumer will reject them and the product will naturally fail and leave the market.  Regulations of the market only skew the market in favor of the consumer or competitor, thus no longer a free and open market to flow in the same manner as the theory of Natural Law.

Socialism:

Modern socialism is not a centralized economic model. During the Soviet Union, socialism was the term used for a centralized economy and a centralized authoritarian regime. Today it is a process that those who gain wealth by way of the rewards gained by risking wealth (capital) in order to gain more wealth. It is assumed that all wealth gained was through the help of society at large.  Therefore a portion of that gain in wealth must be given back to that society for the general welfare and benefit of that society at large. This comes by way of taxation on their wealth that then provides critical social needs such as health care, care for the needy and poor, creating opportunities for those of lesser wealth to obtain more wealth on their own by way of education at all levels, and to provide safety nets for the variables of life caused by nature, lack of ability, and outside events beyond their control. It does not preclude private ownership of wealth, just a sharing of that wealth in the theme that all wealth is not created in a vacuum by one’s self. Today’s socialism works in tandem with capitalism so that capitalists have a steady and consistent consumer base, as well as a peaceful consumer base, to generate their additional wealth (capital).

Communism:

This model considers all wealth as being owned by everyone collectively. Everyone has equal title to the property and thus the wealth. This does not include personal property that is privately owned. Therefore, all land and natural resources are to be enjoyed by everyone, regardless of any social status or class. All commerce that generates wealth must also be owned collectively by everyone and the benefits enjoyed by all.  In theory this sounds great to those who have little or no wealth accumulation. But it cannot be put into practice effectively for any society greater than a few hundred individuals. If there is no one who has any wealth (capital) to put at risk to invent or produce products or services that the society needs or desires, then such products and services shall be lacking in availability, quality and innovation. Altruism has its limits.