Is it possible to be a socialist and a capitalist?

Question

I don't know how to label my economic belief system, and it's frustrating when getting into discussions with other people.

I believe in Capital. I believe that people have a right to earn more than their neighbor. I believe in incentivizing people, and using capitalism in the workforce to do that. I believe in private property, but that rules/regulations should surround how people are able to use that property.

However I also believe in democratizing the production of certain industries (food, water, shelter) - In other words, every basic human need should have a public option, or provided by the state.

Now that doesn't mean that someone can't create a restaurant and be profitable. It just means that if a consumer wants to spend his expendable money on something nice (good food) they can, or they can go down to the state store and get some vegetables for free (paid for by taxes).

Is there a name for this kind of ideology? Because if I say that I'm a socialist capitalist to people - they all seem to tilt their head like a dog responding to a whistle.

Answer 1

What you are describing is a Mixed Economy. Essentially the state takes over certain markets either through direct control or regulation while letting others be more free-market.

Numerous economies ranging from the United States to Cuba fit into that model to varying degrees.

Going further, the concept of a Universal Basic Income combined with state control of food and housing costs also fits.

Answer 2

As NotMe's answer noted, economically, you are describing a mixed economy. It has some features of socialism and some features of capitalism (which vary by industry).

Politically, what you are describing seems to be a typical system associated with modern social democracies, namely capitalism with a very strong social safety net and certain industries nationalized whole or usually partially (in addition, your question didn't specify whether you want the safety net providers to be socialized or merely have people's use of private providers paid for/subsidized).

Majority of the society as you describe is more capitalist(ish) than socialist(ish), though - as I noted in the comment to your original question, socialism and capitalism, despite what Marx said, aren't two mutually exclusive discreet options; but are more along the continuum, often with different areas in same society along different points on the spectrum (e.g. railroads may be almost wholly nationalized, healthcare 50% nationalized, food 10% nationalized, and entertainment 0.06% nationalized). In China, widget production for export is 100% private whereas 95%+ banking is nationalized. Most consumer electronics production seems private yet most military production is nationalized.

And yes, that last paragraph is a long-winded way of answering YES to your title question.

Answer 3

Take a look on the various countries in europe. In Germany, after WW2 an economic policy was instated called Social market economy. In (heavily flawed) shortness, this policy meant, that the state sets a framework of rules, an within this rules the market is allowed to act freely.

Basic human needs, such as education or health coverage, are paid for by the tax payer. However, if you fancy to send your children to private schools, or seek treatment in private clinics, you can do so and cover the cost yourself.

I am not sure, whether this model is too little socialist, as some of the other answers lean more into the socialist direction.

Answer 4

Similar to a Mixed Economy like @NotMe linked, something else you can read about (but tends towards the left of the spectrum) is Market Socialism.

Market socialism differs from non-market socialism in that the market mechanism is utilized for the allocation of capital goods and the means of production.

(BTW I'm being a bit pedantic but chances are you're not a "capitalist", but rather someone who supports capitalism.)

Answer 5

What you are describing has a name - Capitalism.

Capitalism is not synonymous with 'no government'.

Some of the things Capitalist governments traditionally have provided include public:

Healthcare, education, energy, telecommunications, water, sewage treatment, emergency services, transport (including busses, trains, and airplanes)

Some times these public services are free. Sometimes they cost a small amount but still run at a loss, sometimes they make money for the government, and are described as "a tax by stealth" by people that want the system privatised so they can be the one making the money, sometimes they are free for vulnerable people, and cost something for others.

Many Capitalist countries have moved towards Neoliberalism, which is a specific interpretation of capitalism in which the government has little or no role. This transition has resulted in many services traditionally offered by capitalist governments being privatised or defunded.

Examples of Neoliberals include Ronald Reagan in the USA and Margaret Thatcher in the UK.

What you want to communicate to people is "I am a Capitalist, but I oppose Neoliberalism and support a strong safety net".

Note: food is an interesting example. Generally, Capitalist Governments have chosen to subsidise private food production, and rely on welfare payments to ensure they everyone can access this food. They have not got into food production themselves. I honestly don't know why this is the case. Regardless, even if you were to believe that the Government should produce some food essentials to provide to the poor, that is unlikely to contradict any fundamentals of Capitalism.

As to the question in the title. Yes, there is a spectrum of beliefs. Virtually no-one believes in absolute free markets (at a bare minimum, most people agree that courts should enforce a contract signed between 2 individuals or companies), and virtually no-one believes in complete state control of everything - even the USSR and China had significant amounts of private control over collectivised farms and allowed private farming as well for most of their history. Regardless, from what I have seen, your beliefs fit the standard definition of Capitalism, and have little of socialism in them.

Answer 6

I upvoted most of the other answers talking about Mixed Economy, but they used a political approach while mostly ignoring the economics, which I think is really the heart of the issue here (since we are talking about how to organize an economy).

When I studied Econ back in the 80's, your mixed economy position was pretty much orthodoxy in Macroeconomics¹. The idea is that certain things are Natural Monopolies, and for those, since you are going to have a monopoly anyway, you should just accept that, and make it as accountable to the people forced to use it as possible. These are usually things with ridiculous start up costs and/or where it would be silly to have more than one. For example, it would be crazy expensive and wasteful for 6 competing electrical companies to all run their own separate wiring systems from their power plants to everyone's houses. You wouldn't even want that many wires running into your house.

Monopolies have the power relationship with customers reversed, which means the only way to keep them from becoming abusive is some kind of government control. This can range from regulation all the way up to flat out direct government ownership.

Some other things should be run by the government because we view them as a right, and the profit motive does not allow for fair universal access to rights. The typical example here is police and fire protection². From this economic standpoint, the debate (in the US) over universal medical coverage can be boiled down to a question of whether basic healthcare is a right or a privilege. If its a right, then as a matter of basic Macroeconomics it needs to be government-run.

On the other hand, monopolies like this are inherently inefficient. They are going to cost you more for the same thing, and they are going to be less responsive to users, no matter what you do. So in markets where the above doesn't apply, which is most markets (eg: Ice Cream makers), you want as free a market as possible. This generally means Capitalism³. If your ice cream vendor does something horrible (like charge way too much, or put listeria in their product), then you will just buy someone else's ice cream, and the crappy company will wither or go out of business. Free market capitalism is inherently Darwinian.

The only thing the government should be doing here is making sure someone doesn't artificially make themselves a monopoly anyway. And yes, this does take regulation and government action sometimes. Adam Smith himself argued this.

Politically world-wide this kind of economic position is most associated with centrist party ideologies like Christian Democracy and Social Democracy. In the US the two major "parties" are more like coalitions than traditional parliamentary system parties, but the Democratic coalition tends to strongly support the mixed economy system, and parts of the Republican coalition do as well. So this position is possible within either US party structure, but perhaps more secure within the Democratic one.

^{1 - My instructor was a Libertarian, but he was careful to teach the orthodoxy (as per the book), and then openly discuss where he personally disagreed with it. It wasn't by a lot either.}

^{2 - There was a time when professional firefighers were paid by insurance companies, and would sometimes refuse to put out fires and/or rescue residents on uninsured properties.}

^{3 - There's nothing stopping a healthy competing company in a capitalist system from being employee-owned, which is really what Marx was arguing as his main goal in the first place. "Labor owning the means of production" and whatnot.}

Answer 7

From a purely terminology standpoint, I believe you are in the social liberalism domain (which when implemented is usually referred to as a social market economy).

Just a preface...American line of thought on 'Liberal' to the degree where it's almost a curse word in the population does not align with what liberalism is. Liberalism in an economy sense is an individual promoting view and fully resists government involvement. I do assume this creates some hesitation in labeling yourself liberal anything with the US.

Though there are many strains of Social Liberalism, I believe from your comments that you'd fit into OrdoLiberalism https://en.wikipedia.org/wiki/Ordoliberalism which can to some degree be referred to as liberal conservatism. Ordoliberals tend to distinguish themselves as liberalism with a key focus on social justice and social security.

Just a quick edit: I believe the case can be made that when speaking of economics, liberalism and socialism are opposite (at least to some degree). I get a ironic laugh that the hard-core "Government out of everything" American populace is promoting Liberal Capitalism at it's core, but somehow views the word 'Liberals' to represent the people with far more socialist economic viewpoints. Might be a question worthy of language.se ;)

Answer 8

Many answers here describe what its called a 'Mixed Economy' or, more precisely Interventionism.

Interventionism is an economic policy perspective favoring government intervention in the market process aiming to correct supposed market failures and promote the 'general welfare' of the people. An economic intervention is an action taken by a government or international institution in a market economy in an effort to impact the economy beyond the basic regulation of fraud and enforcement of contracts and provision of public goods.

The real answer here is if we can indeed take the 'good side' of each economic system (free market capitalism in one side and government run socialism on the other) and if the resulting arrangement can be archived and mantained.

One can raise an argument that whenever government do some kind of intervention on the free market in order to address some supposed marked deficiency it may yield some unintended consequences which in turn will be blamed as another marked deficiency and require another intervention. This process can lead a circle in which each new intervention reduces the freedom of the market bring the economy one step closer to socialism.

The excerpt below is taken from 3rd Lecture of Economic Policy: Thoughts for Today and Tomorrow and describes this process using as example the price controls:

Now let us analyze the reasons for this. The government hears people complain that the price of milk has gone up. And milk is certainly very important, especially for the rising generation, for children. Consequently, the government declares a maximum price for milk, a maximum price that is lower than the potential market price would be. Now the government says: “Certainly we have done everything needed in order to make it possible for poor parents to buy as much milk as they need to feed their children.”

But what happens? On the one hand, the lower price of milk increases the demand for milk; people who could not afford to buy milk at a higher price are now able to buy it at the lower price which the government has decreed. And on the other hand some of the producers, those producers of milk who are producing at the highest cost (the marginal producers) are now suffering losses, because the price which the government has decreed is lower than their costs. This is the important point in the market economy. The private entrepreneur, the private producer, cannot take losses in the long run. And as he cannot take losses in milk, he restricts the production of milk for the market. He may sell some of his cows for the slaughter house, or instead of milk he may sell some products made out of milk, for instance sour cream, butter or cheese.

Thus the government’s interference with the price of milk will result in less milk than there was before, and at the same time there will be a greater demand. Some people who are prepared to pay the government-decreed price cannot buy it. Another result will be that anxious people will hurry to be first at the shops. They have to wait outside. The long lines of people waiting at shops always appear as a familiar phenomenon in a city in which the government has decreed maximum prices for commodities that the government considers as important. This has happened everywhere when the price of milk was controlled.

But what is the result of the government’s price control? The government is disappointed. It wanted to increase the satisfaction of the milk drinkers. But actually it has dissatisfied them. Before the government interfered, milk was expensive, but people could buy it. Now there is only an insufficient quantity of milk available. Therefore, the total consumption of milk drops. The children are getting less milk, not more. The next measure to which the government now resorts, is rationing. But rationing only means that certain people are privileged and are getting milk while other people are not getting any at all. Who gets milk and who does not, of course, is always very arbitrarily determined.

Whatever the government does, the fact remains, there is only a smaller amount of milk available. Thus people are still more dissatisfied than they were before. Now the government asks the milk producers (because the government does not have enough imagination to find out for itself): “Why do you not produce the same amount of milk you produced before?” The government gets the answer: “We cannot do it, since the costs of production are higher than the maximum price which the government has established.” Now the government studies the costs of the various items of production, and it discovers one of the items is fodder.

“Oh,” says the government, “the same control we applied to milk we will now apply to fodder. We will determine a maximum price for fodder, and then you will be able to feed your cows at a lower price, at a lower expenditure. Then everything will be all right; you will be able to produce more milk and you will sell more milk.”

But what happens now? The same story repeats itself with fodder, and as you can understand, for the same reasons. The production of fodder drops and the government is again faced with a dilemma. So the government arranges new hearings, to find out what is wrong with fodder production. And it gets an explanation from the producers of fodder precisely like the one it got from the milk producers. So the government must go a step farther, since it does not want to abandon the principle of price control. It determines maximum prices for producers’ goods which are necessary for the production of fodder. And the same story happens again.

The government at the same time starts controlling not only milk, but also eggs, meat, and other necessities. And every time the government gets the same result, everywhere the consequence is the same. Once the government fixes a maximum price for consumer goods, it has to go farther back to producers’ goods, and limit the prices of the producers’ goods required for the production of the price-controlled consumer goods. And so the government, having started with only a few price controls, goes farther and farther back in the process of production, fixing maximum prices for all kinds of producers’ goods, including of course the price of labor, because without wage control, the government’s “cost control” would be meaningless.

Moreover, the government cannot limit its interference into the market to only those things which it views as vital necessities, like milk, butter, eggs, and meat. It must necessarily include luxury goods, because if it did not limit their prices, capital and labor would abandon the production of vital necessities and would turn to producing those things which the government considers unnecessary luxury goods. Thus, the isolated interference with one or a few prices of consumer goods always brings about effects—and this is important to realize—which are even less satisfactory than the conditions that prevailed before.

Before the government interfered, milk and eggs were expensive; after the government interfered they began to disappear from the market. The government considered those items to be so important that it interfered; it wanted to increase the quantity and improve the supply. The result was the opposite: the isolated interference brought about a condition which—from the point of view of the government—is even more undesirable than the previous state of affairs which the government wanted to alter. And as the government goes farther and farther, it will finally arrive at a point where all prices, all wage rates, all interest rates, in short everything in the whole economic system, is determined by the government. And this, clearly, is socialism.

What I have told you here, this schematic and theoretical explanation, is precisely what happened in those countries which tried to enforce a maximum price control, where governments were stubborn enough to go step by step until they came to the end. This happened in the First World War in Germany and England.

Answer 9

As stated above, you have forms of market socialism.

Market socialism differs from non-market socialism in that the market mechanism is utilized for the allocation of capital goods and the means of production.

Forms of market socialism like mutualism are considered a form of libertarian socialism and act as a system "that endorses a society based on free markets and usufructs, i.e. occupation and use of property norms." This form of socialism also technically meets the basic definition of capitalism: an economic system in which private actors own and control property.