Does capitalism need a dose of socialism?

clenched fist

Occasionally, however, capitalism requires a good dose of diluted socialism to keep it kicking, and the capitalist elite may well be hankering for a bit of socialist economics to straighten out the neoliberal disaster engineered by ideologues with fanciful derivatives they can’t understand (and neither can the “rocket scientists’ who engineered them) and an energy crisis that they can’t break out of.

Oh, the rocket scientists understood their derivatives well enough, it was the risk they didn’t understand. “The range of markets practically never goes outside two standard deviations.” Yet in the 1987 crash, it was twenty standard deviations. Oopsie. “Our models predict no more than a 2% default rate in subprime mortgages.” Whoops, “How did the default rate go to 4%, our models show that to be impossible.” Darn that pesky reality that refuses to conform to mathematical models.

Socialists tend to think that capitalists control the system with a firm hand and glacial calm. Not so. Financial markets sometimes careen about like chipmunks on meth with no one in control or knowing what will happen next. Like now, for example.

Yes, capitalism absolutely needs a huge influx of money to pay for R&D and development of clean energy. They know this. The money will come from governments, private enterprise, and non-profits (like the Google foundation.) Venture capital firms like Kleiner Perkins already are pumping in millions, probably billions. Some governments are deeply involved, sadly not ours (yet.) Hey, I don’t care how clean energy gets developed as long as does and becomes available to all.

As for the derivative debacle, it signals the death knell for neocon lunacy and their hands-off-the-market philosophy, as this rather clearly led to massive greed followed by the credit crisis. Plenty of hardcore capitalists are now calling for increased and strict governmental regulation to insure this can’t happen again.

So, if governmental investing in clean energy and increased regulation of markets be Socialism Lite, then it most assuredly is coming.


    Yes, capitalism need to be somehow regulated with a social net , that gives the oportunity to the people at the bottom, desire and work the way to the top, corporation as good as they are to create jobs and also to contribue payng taxes, are obligated to be regulated by goberment, imagine a country with only one electric company or telephone company, capitalism that is not watch becomes an arab state! the beautiful of this country the U.S that is! avoids to have a system like Mexico! just google Carlos Slim and find out you can also write me at

  • I vote for armed insurrection.

    This year I go back to my roots – my grand-parents socialism. No ore Mr. Nice Guy.

  • They were Wobblies, right?

    As for armed insurrection, just remember what Saul Alinsky said about the Black Panthers, “it’s just idiocy for the Panthers to talk about all power growing from the barrel of a gun when the other side has all the guns.”

  • DJ

    (1) Capitalism as practiced HAS a dose a socialism– though admittedly a small one. We’ve got social security, medicare, and in some states (like mine) even socialized liquor.

    (2) Control of markets when they get out of control is not a socialist idea– it’s a part of capitalism that the greed-mongers hope we ignore. As is basic morality.

    (3) Could capitalism use a bit more socialism? Absolutely– not only in energy, but in medicine and several other areas as well.

  • This is a real hot bed issue these days, but I think socialism and capitlism together can work.

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