Communist Party of Australia

We acknowledge the Sovereignty of the First Nations’ Peoples.


Journal of the Communist Party of Australia

ISSUE 68September 2018

Capitalism vs Socialism: The great debate

“A victim of collision on the open sea
Nobody ever said life was free/sink, swim,
go down with the ship
But use your freedom of choice”

The right-wing think tank the Institute for Public Affairs (IPA) which recently announced the creation of its youth wing, Generation Liberty, held a public debate entitled “Capitalism vs Socialism” at the Wesfarmers Lecture theatre in the Business School of the University of Western Australia.

According to its website, the Generation Liberty program “targets those aged 16-25, bridging the gap between the next generation and the ideas of free markets, individual responsibility, capitalism and democracy.”

The group chose writer Nicola Wright of Liberty Works author of articles, “Why capitalism trumps socialism”, “No we don’t need a law for that” and “It’s time to say no to renewable energy targets”, to advocate the benefits of capitalism while Dr Christopher Crouch, cultural historian and author of “An introduction to the Aesthetics of Sustainability”, “Modernism in Art, Design and Architecture” amongst others was approached to advocate the benefits of socialism.

A capacity crowd of over 150 predominantly young commerce and finance students filled the lecture theatre for the event which would feature 12-minute speeches by each speaker followed by a five-minute rebuttal speech. Attendees using their mobile phones could indicate their preference for each system in three questions before and after the speeches to see if their preference changed as a consequence of what they had heard and understood.


Dr Christopher Crouch began proceedings by acknowledging the meeting was taking place on Aboriginal land and though the crowd may be not warm to the ideas of socialism they were here for what was, “essentially an event marking Karl Marx’s bicentennial and the importance of his ideas.”

Dr Crouch continued by observing, “We can’t ignore Marx’s sociological ideas in the same way we can’t ignore Darwin on biology or Einstein on physics, which are foundational sets of ideas that emerged as the world industrialised.” The ideas were not fixed but were starting points which would develop and be modified as our expertise changed.

He proposed that the origin of socialist ideas was intimately linked with the emergence of capitalism and a direct consequence of its historical excesses in the late 18th and 19th centuries during the Industrial Revolution. The economies which grew out of these times had been built on trading human beings as commodities – the trade in people as slaves in Europe, England and the US. The imperialist countries at the time divided the world up into colonies and extracted low cost raw materials that were then transformed through cheap disposable labour – including that of children – with a minimum of regulation of wages and working conditions for making products for sale on domestic and world markets. He continued, “For Marx, and his co-researcher Friedrich Engels, it was as if everything which had previously been tangible about how people observed human social experience was melting away – in Marx’s own words, “all that is solid melts into the air.” As Crouch said of these changes observed by Marx and Engels, “Everywhere they looked they saw economic relationships supplanting social ones, creating people who were increasingly alienated from one another, themselves and from nature.” Every aspect of life was being commodified – and those without capital were treated mercilessly.

Crouch suggested that no social advance has ever been made be it the provision of employment rights, health care or education without being fought for every step of the way, if not by organised labour or political parties then by coalitions of concerned citizens. Social research has shown us that ultimately only communal endeavours make us happy which is facilitated by sporting clubs, art clubs, good public transport, easily accessible health centres, kindies and aged care centres. The heart of everyday life rests on how our work is valued and how our everyday lives intersect with our work. When we work (under either socialism or capitalism) we sell our time as labour, and we produce surplus value for those who employ us. What is done with that surplus and how it is managed lies at the heart of how our lives are lived. An example, Crouch said can be found in the research of PerCapita (a not-for-profit institute interested in the social aspects of taxation) who for the last eight years has surveyed national attitudes about tax. During that time there has been a continual rise in the support for the increased taxation of profits. The more we are taxed to provide social amenities, the happier we are. Increased taxes added Crouch, provide resources for our community as we all need access to kindies, schools, hospitals and health centres. The purpose of this infrastructure should not be to make medical corporations or schools wealthy or independent of the state, their purpose is to help build communities that are physically and psychologically sound so our children and people of all ages can develop their full potential.

Crouch concluded by making a plea for a living wage in this country, a wage which isn’t just a wage that helps the individual exist from day to day, but is a social wage for transforming whole communities enabling them to live full, empowering lives. The construction of such a wage is about social cohesion, social trust and co-operation for our mutual benefit. All those qualities said Crouch, are dependent upon the social regulation of profit.


Nicola Wright began her presentation by saying while socialists have good intentions as they see inequalities, people needing change, profits shared and power centralised. Under the values of capitalism there is a desire for decentralised resources, monetary exchange for goods and services and a free exchange of these goods and services in a market with minimal regulation. Free markets are democratic as they allow people to satisfy their wants dependent only on the value of money they possess determining their access to resources.

Wright continued by asserting that free markets want people to be free.

Wright proposed that Marx’s view of how economies work presents many problems to people who try to put his ideas into practice today. She used the example of how the workers in the Pilbara would move the iron ore from the mines to the ports on the coast without the entrepreneurial skill and investment of the capitalist.

She went on to say that in Russia under the Soviet Union, Stalin wielded power to force the people into factories and agriculture to produce materials in a way which was foreign to them. He also killed millions of his own people in purges to maintain his control of power over the Soviet state. In China under Mao during the 1950’s and 1960’s he collectivised agriculture in a program of agrarian reform which moved China backwards and caused starvation and hardship for millions of Chinese people. However, from the late 1970’s under the new leadership of Deng Xiaoping a process was begun of introducing market reforms to the Chinese economy and today China is the second fastest growing economy in the world.

Wright continued by asserting where there is more economic freedom there is a greater opportunity for the improvement of people’s lives and as an example; child mortality is lowest in free market economies. Where capitalism has not lived up to its promise is where cronyism and corruption have given capitalism a bad name. Government itself is bloated as it tries to do too much which capital could do better, and smaller governments are better as they are less able to interfere in the market and economy. It is natural for people to be lovers of the free market once they have had a taste of them whilst poverty was a default human condition. “Never before have so many people had it so good”, added Wright as entrepreneurs make the whole pie bigger. However, there were people under a free market system who do not fare so well as not everyone is equally talented. Wright also asserted that only through coercion and control can people live in collectives where resources are pooled for the benefit of all as would occur under socialism. It has been shown the bonds of altruism can only exist in small groups such as a Kibbutz or commune within a large capitalist economy – and then only for relatively short periods of time as there are restrictions put on people’s freedoms in these types of communities. Freedom is achieved for the greater number of people in capitalist economies through the exercise of their freedom of choice in the products and services you choose to buy.

In socialist societies these freedoms could not exist and therefore concluded Wright, “Socialism is slavery.”

Rebuttal by socialism

In response to Nicola Wright’s remark that all socialists did was seize existing assets created by capital, Dr Christopher Crouch began his rebuttal of the arguments for capital by saying he looked forward to seeing some manufacturing being developed in Australia rather than being moved offshore.

He observed that the operations of markets were also on display during the recent US led missile attacks on Syria which saw the stock market value of Raytheon, Boeing Lockheed and Northrop Grumman – the missile manufacturers rise by $5 billion. “There was a time”, said Crouch,” when it would have been impossible to imagine a world without kings and queens. Today it is hard to imagine a world where capitalism behaves ethically under its own volition, but when it does that will be socialism. It was Marx who observed how a world exclusively focused on economics destroyed social relations. Because of these observations Albert Einstein argued for a, “socialist economy, accompanied by an educational system which would be oriented towards social goals.”

He concluded by saying that Socialism is about taking control of our lives and working together for the common good, to build a world that acknowledges our interconnectedness; “Let’s join together in trying to live differently – a better world is possible”.

Rebuttal by capitalism

Nicola Wright began her rebuttal by saying it was difficult to argue against the most central aspect of socialism which was the collective ownership of the means of production when the advocate for socialism had not elaborated upon the point. However, notwithstanding the presentation of the argument, Wright went on to say under socialism, people have to be forced to participate. Socialism brings its own demise as it denies people their freedom.

Wright concluded her rebuttal by offering a quote from the Austrian economist Joseph Schumpeter who was an advocate for capitalism (but ironically also later in life an advocate for socialism replacing capitalism) “At the heart of capitalism is creative destruction.”

Results of the debate

The format of the debate did not allow for any testing of propositions as there was no Q & A. Instead, in the style of the type of freedom which we have under capitalism, a predetermined choice lacking any nuance was offered. Prior to the debate starting, participants were asked to log on to the website of Generation Liberty and answer three questions about their preferred system: capitalism or socialism. The result listed online before the debate was 54 percent in favour of capitalism and 27 percent for socialism while after the debate it was 63 percent for capitalism and 26 percent for socialism with the balance being undecided. It should be noted that these results can’t be independently verified and it seems highly unlikely that Generation Liberty would publicise a result that didn’t reflect favourably! In the absence of a Q & A, I approached Nicola Wright and put two propositions to her. The first was about her proposition that more people are better off as there is more wealth in the world today. I suggested to her there was more wealth in the world but it was concentrated in fewer hands; the 1 percent, while many of the 99 percent were worse off. Wright said that in China more people had moved out of poverty as China chose a more capitalist model for its economy.

In regard to her identifying the countries which had socialist societies/economies I reminded her of her omission of Cuba. Wright responded by saying that if Cuba was so good why were people fleeing to Miami. I responded that the Cuban Blockade by the United States government produced distortions in the way wealth was generated in Cuba but also that people were no longer fleeing to Miami as the previous administration of President Obama had abolished the Wet Foot/Dry Foot policy which made it profitable to flee Cuba but almost impossible to legally migrate to the US. Cuba also had one of the lowest rates of infant mortality in the world, better than the US and equal to Australia.

Debating dishonestly

Wright and the organisers of the event were wise to avoid any mechanism whereby their fallacious arguments could be verified. This is because her arguments rest upon baseless assertions, cold war black propaganda, and absurd “newspeak”. Indeed the phrase “socialism is slavery” would have made Orwell proud and would not be out of place alongside his famous lines: “war is peace, freedom is slavery, ignorance is strength”!

Rather than debunk each of Wright’s specious claims step by step, it is enough to point out a key flaw in her argument: the idea that the market, aka capitalism, is democratic and encourages freedom while socialism is the opposite. She stated that free markets are democratic because they distribute resources based only on the ability to pay. If something is democratic it implies that all participants are equal and one person has one vote. A system could hardly be considered democratic if most people only get one vote while a handful of people get millions! So how could the market possibly be democratic when individuals participating are not equal in their ability to access resources? The idea of market distribution being democratic is patently absurd. Yet absurdity doesn’t bother the ideologues of capitalism. Just like when advertising a product, all they need do is create associations with positive terms, rather than engage in honest discussion over the real character of their system.

Freedom is a catch cry among the propagandists of capital. Yet, what does freedom actually mean in a capitalist context? What does it boil down to? According to the content of Wright’s speech, freedom under capitalism is essentially the freedom to choose what to buy! Setting aside the other inequalities which exist in a capitalist society, most people’s “freedom of choice” is limited by their lack of income. In fact, what capital really means when they say freedom is the freedom to exploit and do whatever they want in the pursuit of profit. People would do well to remember that.

Rather than people being forced to participate under socialism, it is capitalism where the stick of poverty, hunger and homelessness is wielded against working people to force them into an unequal exchange with capitalists. No one accepts zero-hour contracts, being on call 24 hours a day and no job security without coercion. Such is the newspeak of modern capitalist apologia that such a “choice” is presented as freedom while socialism’s guaranteed work for life and state provided housing, healthcare, education, childcare and retirement are “slavery”.

In contrast to Wright’s apologetics, Crouch’s arguments for socialism relied less on emotive responses and more on appeals to reason, historical context, sustainability and what was better for the common good.

Ultimately, should the Communist Party have engaged in such a forum and would we do it again? The answer is most definitely yes. When your opponent fears the threat of a good example we should show people what the Communist Party of Australia has to offer as often as is possible.

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