Chapter 1: LIMITATIONS OF CAPITALISM
1. Capitalism has not won the game.
1.3. The failure of Soviet-style socialism
Why did Soviet-style socialism fail in the first place? The most central reason is that the state's economic planning has not worked effectively. The plans by national planning agencies were desk plans by planning officials who were administrative bureaucrats,tended to be an unreasonable challenge pushed by the Communist Party's leadership to "catch up and overtake the West, especially the United States!"
A more fundamental problem was the introduction of a planned economy without abolishing the commodity economy. Money is by nature an anarchic object that does not fit well with planning, and it was an unfulfilled dream to regulate the flow of goods and money in an orderly manner, even with any desk plan. The planned economy of the Soviet Union was nothing more than a flawed controlled economy. Conversely, a true planned economy would have gained meaning and functioned effectively only after the commodity economy was abolished.
In addition, in the Soviet Union's rush to industrialize and build up its armament, it adopted a policy that focused on heavy industry and military industries, which meant that the production system for consumer goods related to civilian life was lagging behind, leaving empty shelves in stores, which were often ridiculed in the West. The shortage of goods it symbolized became permanent, and critics dubbed it a "scarcity economy."
Due to these circumstances, the "developed socialist society" of the Soviet Union led to poverty in consumer life compared to the capitalist society of the West, leading to the accumulation of dissatisfaction among the masses.
1.4. Capitalism's "victory" and "non-victory"
The opponent that capitalism claimed to have won was actually collectivism with the above-mentioned reality. Surely we should admit this. In particular, the affluence of consumer life was the field in which capitalism achieved its most spectacular victory.
However, this "victory" is also with reservations. Capitalist countries have never let market economies go unchecked. Postwar Japan, in which the government has managed the capitalist economy through administrative guidance, is probably a good example of that.
In addition, as symbolized by the Swedish model, which has often been idealized in contrast to the Soviet model, welfare state providing labor laws and social security systems has been developed within the framework of a capitalist economy to support the lives of the working class and promote harmony between labor and management. Even the United States, the champion of capitalism with a laissez-faire economic system, has taken a similar course since the New Deal policy to deal with the Great Depression in the 1930s.
In this way, the revision of the principles of capitalism, in which capitalism leaned toward socialism, was also a major factor in bringing about the "victory."
However, the opponent that capitalism has not yet won is communism. Of course,the fact that capitalism has not won does not mean that it has lost to communism. For true communism has never been seriously attempted. It can be said that communism is still an unknown rival to capitalism. But before we start talking about this enigmatic unknown, it is necessary to give an overview of the current "victorious" state of capitalism.
