Socialism is defined as "worker control of productive capital".
Capitalism is defined as "private control of productive capital".

The system I'm having trouble categorizing, turns everyone into a shareholder of the government. Everyone within the government's jurisdiction would be required to be a shareholder of the government above some minimum amount of part-ownership. If you leave the government's jurisdiction, you would be allowed to sell your part-ownership to anyone else for an agreed-upon price. If you want to enter the government's jurisdiction, you would be told to buy the minimum number of "nationshares" first.

The reason I'm having trouble categorizing the above system is because on the one hand, everyone in the community owns the institution that taxes/regulates/etc everything in said community. On the other hand, the collective ownership is determined by resellable "shares" which is a capitalist construct present in corporations.

  • Maybe neither. What happens when a citizen / resident refuses to purchase "nationshares"? You're forcing a binary decision, where neither option may apply. In terms of economic models, there's also fascism, which lies between socialism and capitalism. – Michael_B May 4 at 2:39
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    What about birth? How does a baby buy nationshares? – Obie 2.0 May 4 at 2:52
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    FIY: It would be illegal under current UN conventions to deprive people of nationality if they lost their shares under your model. Likewise for births @Obie2.0 Even countries that didn't sign up to the 1961 Convention implement jus soli. – Fizz May 4 at 7:50
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    It is not a "political system" in the usual sense, but a "definition of statehood/citizenship." A political system would define who governs the country, which are its limits and goals, and other issues. And a government may decide (within limits stated in the above comments) about the requirements for citizenship, but that is not typically part of the definition of "political system". – SJuan76 May 4 at 8:23
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    @Michael_b I have some bad news for you about how expensive visa and immigration fees can be in the west. The UK now charges several thousand pounds over the years it takes to get residence. – pjc50 May 4 at 9:48

It's not really either, but somewhat orthogonal

Socialism and capitalism deal with how an economy is organized, not necessarily directly with the system of representation. Thus you can have anarchosocialists and Nicolas Maduro both claiming to represent the true spirit of socialism. As another example, as long as relatively free commerce is permitted, and private enterprise dominates the economy, a country might be considered capitalist. But the government might be a dictatorship that tells its citizens who they can marry and executes any dissenters, or it might be as laissez-faire in every area of life as it is with the economy. Libertarian parties and Jair Bolsonaro both want capitalist systems, after all.

Your proposed system deals with government, not economy directly. You haven't said that any of the shareholders get profits from the government (nor would such a system work; the government usually needs net funding from its citizens to get anything done, not the other way around). It could be argued that it's capitalist in spirit, maybe, insofar as it applies a market ethos to government.

But you could imagine a country that implements your model where everyone owns an equal share of the government, where citizens vote to nationalize most industries and distribute the gains, which fits a typical socialist model (at least as implemented in the real world). Or, you can imagine a country where the citizens own an equal share of the government but vote instead to have unrestricted commerce and high levels of private ownership. Or, you could imagine a country where these shares end up concentrated in the hands of a few people, who will probably vote for something similar to the United States today, or other countries where wealthy people have high political influence.

Your system is probably much more likely in a highly capitalist society, but it's strictly consistent with either a socialist or capitalist economy, or something in between.

That said, some aspects of this model are unclear, and if clarified might lead to a clear socialist or capitalist economy, or at least change the probaility of either. For instance, can people freely buy and sell their shares, or only when they enter or leave a nation? Do children acquire shares from their parents when they die, or are new shares issued?

  • +1 Yeah, being forced to purchase one's nationality is likely more capitalist, but then it depends on the details of how such a purchase (payment) is made. – Fizz May 4 at 8:04
  • For clarification: The nationalization/privatization of industry depends on the govenrment's shareholders' (everyone in the country) desire; they can choose to "take" everything, or just earn an income from a 1% annual private wealth tax. The shareholders can freely buy/sell shares on the market; they just must maintain ownership of a minimum number of shares (shares are locked up) to be within the country. Most wealth would be in these shares because a resident shareholder's nationshare wealth must exceed his/her private wealth. Newly-born children receive the minimum number of nationshares. – Jurhas May 4 at 17:47
  • I don't understand how this system would work at all. For every individual's nation-share value to exceed their private wealth, the nation-shares must be exceedingly valuable. This would not be the case in all but very small polities if the shares can be bought and sold - they would sell for a very small amount. If my vote is only 1/1,000,000 of any decision, I won't buy another one for $100, except perhaps for bragging rights. – Obie 2.0 May 5 at 0:21
  • Unless, contrary to what your question implies, these shares do entitle an individual to some share of government earnings through taxation. In that case, the government would need to take more than 50% of an individual's income in order to attach it to the value of the nation-share. But even in that case, if they can cash it out they will and thus end up their shares being worth less than their wealth, and if they can't it's not the value of their share anymore, just regular government money. – Obie 2.0 May 5 at 0:32
  • @Obie2.0, government profit as a cash dividend is not the only dividend shareholders are getting. Shareholders are also getting service dividends (military/police protection, property protection, justice, roads, good working conditions, carrying/hunting permission, etc... ) that would all need to be taken into account when determining the market value of the nationshare. Also, see above where a resident shareholder's private wealth cannot exceed his/her wealth in nationshares. This (artificially) increases nationshare demand/scarcity/price which increases nationshare wealth. – Jurhas May 5 at 1:59

This reminds me of the voucher system in the (botched) privatization of the Russian economy following the fall of the Soviet Union as it attempted a transition out of communism.

In short, it failed for similar reasons I could see your proposed system failing generally speaking, in that it allowed for financially/politically savvy predators to scoop up the "nationshares" of vulnerable or unwitting individuals and ultimately fashion themselves as oligarchs

  • They shouldn't have been allowed to sell all of those shares. Which is why I wrote this part above: "If you want to enter the government's jurisdiction, you would be told to buy the minimum number of "nationshares" first." It means everyone IN the country, would be mandated to stay a shareholder of some min amount. Owning the shares entitles the holder to a service dividend; military/police protection, roads, courts, etc. So it would be theft of services to sell all of your shares and still use said services. – Jurhas May 8 at 12:22
  • I had assumed that, say the minimum amount you could hold was 1 share, everyone is given 5 shares at birth, and thus someone could amass shares without depriving people of all their shares. – Gramatik May 8 at 14:00
  • The actual ratio would be way more conservative, like 1000 nationshares during the transition, 900 nationshare minimum, and 900 nationshares printed to baby at birth. This ratio can change, of course, but it has to be conservative at first to educate the public. Then the minimum can go down 1% a year, or decade, forever. – Jurhas May 8 at 15:26

It’s capitalist. Being a shareholder is how capitalism interprets democracy in the workplace. It’s a very weak form of such democracy, if it can even be called that.

In fact, as most forms of capitalism allow for governance by some state authority. For example, Hayek in his Road to Serfdom, ostensibly a polemic against socialism, points out market economies require a strong legal framework for a free and competitive market to operate. For example, to break up or stop monopolies from forming.

Socialism is about asserting citizenship as a citizen per se. It’s about extending democracy into the market and not about extending the market principle into democracy.

  • Free Market and Gov't regulation tend to act as opposites, as any restriction of the market (even for the greater good) is a reduction in the freedom of the market. Competitive markets on the other hand, require that the barriers to entry into any particular trade be held low enough to allow free entry/exit (buying/starting/selling/dissolving companies). This is more in line with gov't regulation. Pure Capitalism is an unstable system, as it tends to monopolize high-barrier industries, which can then act outside of competitive bounds. – GOATNine May 4 at 14:55
  • @Goatnine: That's the naive view. Without a strong legal framework, courts and a police force how are property rights to be protected? – Mozibur Ullah May 5 at 8:57
  • In a true free market, property rights exist insofar as the individual is able to enforce those rights. It's not realistic in the real world. Tax funded police are a form of socialized public protection, and many proponents of a free market economy don't seem to understand that. Ditto for courts, infrastructure, international IP protections.... The list goes on. Socialism is a sliding scale, not a state of being. – GOATNine May 6 at 13:58
  • @GoatNine: You're confusing a free market with the rule of the jungle, the war of all against all. This might be a 'free market' to you but its not how classical economists think about it. You might as well think the moon is made of blue cheese. – Mozibur Ullah May 9 at 10:05

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