Friday, May 13, 2011

Capitalism and Socialism, Democracy and Oligarchy©

By: Dan Reed, American Citizen
Many Americans are asking what direction is America going? Conservatives claim America is moving toward Socialism. Progressives claim a powerful corporate oligarchy already rules America. At the center of these two extremely diverse views is the American people’s understanding and perception of four economic and political philosophies: Capitalism and Socialism, Democracy and Oligarchy.

To better understand the meanings of these four philosophies, I consulted the new Webster and Oxford American Dictionaries, two college economics books, and Google. I then compared these philosophies in two ways:
·         Capitalism and Socialism Economic Philosophies, and
·         Democracy and Oligarchy Political Philosophies. 


First, Capitalism is governed by six principles:                   

1. Private Property Private individuals and institutions own scarce resources.
2.Freedom of Choice Privately owned enterprises are free to obtain and use resources as they see fit.
3. Self Interest Capitalism is individualistic - Property owners can do what's best for them!
4. Free Markets Buyers and Sellers in a "free market" represent a self-regulating force.
5. Supply & Demand Supply and Demand in the market controls available supply and prices.
6. Limited Government Free Markets, and Supply & Demand, eliminate any economic role for Government.

Second, there are two different forms of capitalism: free enterprise and laissez-faire:

1. Free-Enterprise Capitalism is the individual entrepreneur who owns their butcher shop, bakery, pub, store, farm, manufacturing company, etc. Free enterprise means the freedom to try, the freedom to succeed, and the freedom to fail. As long as the business expenses do not exceed revenues, the enterprise is free to continue indefinitely without the need to grow, expand, or increase its profit. This is our founding fathers modal of capitalism, which was explained in Adam Smith’s (1776) Wealth of Nations.

2. Laissez-faire Capitalism is the corporate banker! Laissez-faire encourages private investment in corporations, where ownership is shared between a collective of capitalist investors (i.e. shareholders)! This form of capitalism requires a return on investment (ROI). Example: If I invest $100 in a business, I had better realize a minimum of $106 by the end of the year. If I reinvest my $106, I better receive $113 the next year, etc, etc, etc. Laissez-faire capitalism demands consumption, explosive growth, huge profits, and continued expansion, for the sake of making a few shareholders very wealthy.

Laissez-faire capitalism raises two fundamental questions: Do corporations exist to compete in a free market, or do corporations exist to monopolize the free market?

Monopoly exists when a single individual or a collective few individuals own a dominant share of a market.

Owning a dominant share of a market allows the monopoly to control supply, control production, and control prices. 

Monopolies destroy capitalism by eliminating the self-regulating force of a free market! 

When monopoly exists in the market, the concept of limited government no longer works!

Everyone has heard corporate conservatives crying about big government socialism. Frankly, I can’t comprehend what they’re talking about? According to Webster's New World College Dictionary, socialism refers to a system wherein "...the ownership and operation of the means of production and distribution [is] by society or the community, rather than by private individuals, with all members of society or the community sharing in the work and the products."

Thus, based on the definition of socialism and U.S. property rights laws, socialism is impossible in America!

I can only guess the corporate conservative definition of socialism refers to government funding of: Public Schools, Medicare, Medicaid, Police, Fire, Central Water Systems, Government ownership of: dams, bridges, dikes, interstate highways, NASA, the SBA, Air and Water pollution regulations, Banking regulations, etc.

I can only guess that corporate conservatives are crying about the U.S. Income Tax System, that levies taxes on profits, which reduce shareholders wealth, and violate the Conservative Virtues of Selfishness Doctrine (Ayn Rand).


In America’s democratic republic, we the people elect representatives to make laws and govern. In a republic, a few people operate a limited government in their own self-interest.


Does anyone ever hear corporate conservatives complain about big corporate Oligarchy? No, because Oligarchy: Must-Not-Be-Named! According to Webster's dictionary, Oligarchy “is a government in which governing power is in the hands of a few.” And, the needs of the few outweigh the needs of the many.

Most classic oligarchies have resulted when powerful elites are recruited from a privileged class, which tends to exercise power in its own self-interest, meaning: Limited Government! 

Oligarchies are not new to America. In 1908, President Theodore Roosevelt busted the Robber Baron monopoly trusts: DuPont-Chemicals, J. P. Morgan-Finance, Carnegie-Steel, Duke-Tobacco, and Vanderbilt-Railroads. The 1929 Wall Street crash, the Great Depression, and FDR’s-New Deal ended the American Oligarchies. Well…Their Back!

Today’s Oligarchies include: Wall Street Banks-Global Finance, Multinational Corporations-Manufacturing, Feudal Cartels-OPEC Oil, Business Monopolies: Health Insurance, Agriculture-Food, Energy, Defense Contractors-Military Weapons, Pharmaceutical Industry-Drugs, Industrial Trade Associations, and the Super Wealthy.

Summary Comparisons

Capitalism and Socialism Economic Philosophies - Is American moving toward Socialism? Absolutely Not! In America, ownership of property and the means of production and distribution reside in the hands of private individuals, not society or communities. Socialism has never existed in America and never will! Furthermore, a much stronger economic argument can be made about corporate monopolies controlling markets and threatening capitalism. To name a few: OPEC, Wall Street Banks, Health Insurance Monopolies, Corporate Farms, Defense Contractors, Energy Corporations, etc.

Democracy and Oligarchy Political Philosophies - Does a powerful corporate oligarchy rule America? No! The American people still elect our president and congressional legislators. However, the U.S. election system has become extremely corrupted by the huge sums of money our president, congressmen, and senators must amass to run their election campaigns! This environment allows those with money (Wall Street Banks, Multinational Corporations, and Super Wealthy Individuals) to openly bribe our elected representatives. This practice raises the following questions, is our democratic republic: of the people, for the people, and by the people? Or, is America a republic: of the corporations, for the corporations, and by the corporations?

Conclusion - It’s no accident that we hear corporate conservatives proclaiming the virtues of a republic, while advocating for limited government, and questioning representative democracy! Corporate conservatives appear to be on a mission to replace representative democracy, with Rule By A Few – Oligarchy! 

© This document is property of Dan Reed and reproduction requires his prior approval. Approval may be attained through an emailed request to 


  1. Excellent and accurate analysis

  2. Thank you for the excellent analysis. I am writing on June 27th -awake late because I am troubled at the evident trend our government is taking down the road towards oligarchy. In my opinion we are already there in many respects. What can we do? I normally have no trouble sleeping but this troubles me. Should I request political asylum from another country. I don't know if I can live in this country as it is becoming very rapidly.

  3. The entire world is an oligarchy. If you do the research! The capitalist get blamed, but who owns them? For instance, almost every oil company leads to the same people, sure they have different names and logos, but they and all banks are lead to a few select families. These families interbreed with each other and you do not see them on television or hear of them. They sit in their castles hiding. They control the media, education, health care, banks, the food we eat, our fake religions they created. All of it

    1. Thank you. This article is off. This world is run by a few elite.

  4. Funny commentaries above. The spectrum of idiocy is far and wide! Yes, people with money and vested interests in certain industries try to persuade the system, but to believe in a global conspiracy reflects true ignorance about human nature. In reality, family members can't even agree on who should win American Idol. To believe that families, spanning generations, conspire to bring about ANY outcome is simple minded. Climb out of your bunkers and experience the real world. That being said, socialism always fails, and capitalism is the only system that can/should be trusted.


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