Yesterday, Today, Tomorrow

Growing up during the Cold War, the mantra of our government, established by President Harry Truman with the Truman Doctrine and Marshall Plan, and explained in the Long Telegram, was we had to contain Communism and prevent it from spreading. To let one country become Communist would result in a Domino Effect of other countries falling.  The historical proof was that the Soviet Union turned communist in 1917 spreading to the Republic of China by 1921, with China becoming Communist as the People’s Republic of China in 1949.   The United States and Western Europe believed Democratic Capitalism was the answer for world peace.   The two ideologies were incompatible. The United States and Western Europe stood firmly on one side of the equation and the Soviet Union and China on the other.  

     Capitalism and communism represent two different visions for how government and economies should be run. Capitalism champions free markets and individual entrepreneurship.  Communism advocates for a classless society with collective ownership of resources. The clash between these systems has shaped global politics, economies, and nations since 1917. In recent decades; however, Capitalist and Communist nations have demonstrated it is possible to incorporate elements of both systems to achieve economic growth and development.

Let’s revisit the ideals of Classical Capitalism as envisioned by Scottish Philosopher Adam Smith in his book “Wealth of Nations” in 1776 . Capitalism is an economic system where private individuals and businesses own the means of production and operate for profit. Firms and individuals own private property. The law of supply and demand in competitive markets drives a market economy. Individuals and businesses are driven by a profit motive to increase revenue. There is very limited government intervention in a capitalist system.

     Communism, as envisioned by Karl Marx and Friedrich Engels in their Pamphlet “Communist Manifesto” published in 1848, is a socio-economic system that aims to eliminate class distinctions by establishing central control of all aspects of the economy. The key characteristics of communism include: collective ownership, there is no private property and wealth is distributed based on need; central planning, all economic activity is controlled by the government for the common good and the law of supply and demand is not a factor; a classless society, workers and owners are equal with all money being shared equitably

     At its birth in 1949, China was one of the world’s poorest nations. It had been the target of hundreds of years of European control and decades of Japanese control. Internal conflicts between Nationalists and Communists divided the country.  Mao Ze Dong wanted to follow the Russian model for communism, and created collective farms owned by the state while nationalizing the industry, and having Five Year Plans to measure the economy.  

     Mao and his “Gang of Four” wrestled with the reality that some still rose to the top of the economic food chain and tried a “Cultural Revolution”  in the mid -1960s to eliminate capitalism from the economy. This failed and was ended in 1968, but the radical view persisted until Mao’s death in 1976.  With his passing, a new economic course was set      

     In 1978.  China initiated a series of market-oriented reforms under the leadership of Deng Xiaoping. These reforms included the decollectivization of agriculture, the establishment of special economic zones, and the gradual liberalization of trade and investment. These changes introduced capitalist elements into the economy, such as private entrepreneurship and market competition. This blend of both capitalism and communism often referred to as "socialism with Chinese characteristics," has propelled China to become the world's second-largest economy behind the United States. 

Since the late 1800s, the United States has been the most powerful economy in the world. The Capitalistic impulses of entrepreneurs like Cornelius Vanderbilt, Andrew Carnegie, JD Rockefeller, JP Morgan and countless others built a nation that spans 3,000 miles. Depending on who you ask, they were either Titans of Industry whose vision and drive built a nation or Robber Barons who used the people.  

     The U.S. was unchallenged and was the deciding factor in ending two World Wars with their economic and military might. 

     Despite that, unchained capitalism led our nation into a deep depression during the 1930s that made other nations, reliant on U.S. economic support, fall like dominoes as their economies stalled.  

     Americans rebelled against government’s hands off approach to managing markets and in overwhelming numbers voted Franklin D. Roosevelt into office four times.      

     He believed the government should be more involved and embraced the theories of John Meynard Keynes described in his book “The General Theory of Employment, Interest and Money," that the government has a role in managing the economy and ensuring equity.  This theory has evolved into programs that include socialist goals of promoting security and equity for all. 

While the United States is primarily capitalist, it has integrated programs to address social and economic issues such as Anti-trust legislation to prevent monopolies of industry, Tariffs to protect local industries, social security to protect the infirm and elderly, Medicare and Medicaid to provide health coverage, public education to train the workforce and build communities, Unemployment Insurance to help those out of work, Welfare programs, Public Infrastructure like roads, bridges and public transportation. These elements reflect a blend of capitalist and socialist principles.

     The United States and China have shown the dynamics of a changing world. Theories of Capitalism and Communism cannot survive in the real world.  Both nations have found ways to adapt for the good of their nations coming from opposite directions.  

     I still prefer to live in the United States along with 330 million other Americans, but 2.4 billion Chinese like China.  Of course, 2.4 million Chinese have chosen to make America their new home with about 76 thousand Americans emigrating to China.  

     I think the lesson here is that the two ideologies are not incompatible and perhaps we have more in common than we realize. 

     Prayers for those impacted by the flooding. The challenges seem to keep coming for  Kentucky and Lee County. 

Chuck Caudill is a recovering politician and military retiree. He has dabbled in the performing arts, journalism, and service industry. Currently a Social Studies and History teacher at Lee County Middle High School, he is writing this column to keep students and parents engaged in discussions that will prepare students to be the Shepards of the future.