The "Capitalism Versus Socialism" Experiment

How many times have we heard the claim that capitalism is an awful system and that it must be replaced with socialism as it's the only system that actually cares for its people and treats them as equals?

Far too many.

What's worse is that there are plenty of examples in history to show that it is socialism in all its forms that is an awful system, impoverishing the very people it's supposed to be helping, and in many cases devolves into a form or totalitarianism. What's my proof?


The Capitalism versus Socialism experiment has been run many times over the past 400 years, in some cases as a side-by-side experiment, and capitalism has won out over socialism every single time. Yet every generation or so someone feels they have to try the experiment again, and once again some nation ends up under a socialist system and yet again it fails, sometimes violently. They choose to ignore history, or worse, figure that they're smarter than those who went before (they aren't) and that this time they'll get it right (they won't).

One of the big side-by-side experiments was undertaken about 70 years ago and it proved conclusively that socialism was a failure.

Experimentation is a major tool in the scientist’s arsenal. We can put the same strain of bacteria into two Petri dishes, for example, and compare the relative effects of two different antibiotics.

What if we could do the same with economic systems? We could take a country and destroy its political and economic fabric through, say, a natural disaster or widespread pestilence – or a war. War is the ultimate political and economic cleansing agent. Its full devastation can send a country back almost to the beginning of civilization.

We could then take this war-torn country and divide it into two parts. It would have similar people, similar climate, similar potential trading partners, similar geography – but one part is rebuilt using capitalism as its base, while the other rebuilds using socialism and its principles. We’d let the virtues of each system play out and see where these two new countries would be after, say, fifty years.

Don’t you wonder what the outcome might be? Well, as it turns out, we have already performed The Experiment. It’s post-war Germany.

Following the devastation of World War II, Germany was split into two parts. The German Federal Republic, or West Germany, was rebuilt in the image of the western allies and a capitalist legal-political-economic system.  By contrast, the German Democratic Republic, or East Germany, was reconstructed using the socialist/communist principles championed by the Soviet Union. The Experiment. pitted the market economy of the West against the command economy of the East.

The results? West Germany became an economic powerhouse and its citizens garnered wealth that rivaled that of the rest of Europe. East Germany became an economic backwater that could not compete with its western counterpart, was an economic basket case that had a difficult time providing its citizens with the basic necessities, let alone any of the luxuries enjoyed just to the west. It wasn't until socialism collapsed and Germany was reunified that those in East Germany also received the benefits of a capitalist society.

Another experiment of that type that is still running after 64 years is North and South Korea. The difference between the totalitarian socialist system of North Korea stands in stark contrast the wealth and prosperity enjoyed by capitalist South Korea. Two different systems side-by-side and the outcome of that experiment is quite clear. Yet we still have people, particularly in this country, that seem to think the failed system is better. It just staggers the imagination to think that there are people who truly can't see just how bad it is...or they don't want to because to them it's a means of taking power and not in any way a means of creating a better system. (Of the two, I'd have to say it's probably a 50/50 split.)

One has to wonder if the disease of socialism will ever be cured. Yes, I call it a disease, in this case a mental disease because its adherents do the same thing over and over again but expect different results this time. According to Albert Einstein, such an affliction is known as insanity. We can only hope that one day humanity will find a lasting cure.