CAPITALISM, SOCIALISM, AND HUMAN RIGHTS

Human Rights are entitlements meant to guarantee the wellbeing of individuals.

But the wellbeing of individuals is tied to the wellbeing of their communities or what is referred to as social welfare. So human rights scholars and activists seek to devise and put in place rules that promote social welfare and mechanisms to enforce those rules.

The largest community people are part of is the world community. The world community is composed of countries or nation states characterized as capitalist or socialist. A country is capitalist to the extent resources (land and capital) are owned by individuals and markets free of government interference determine how those resources are allocated and how income and output generated by those resources is distributed.ⁱ A country is socialist to the degree government determines how resources are allocated and income and output are distributed.

Which system is best? The answer is subject to dispute.

Libertarians believe the most important human right is an individual’s right to determine what to do with the resources available to her. Hence, they maintain a capitalist system in which governments are limited to protecting ownership rights is best. As the Libertarian Roger Pilon, the former director of the U.S. State Department’s Bureau of Human Rights and Humanitarian Affairs put, it, “only in a system of democratic capitalism can rights be respected, whereas nondemocratic or noncapitalist systems…are inherently antithetical to human rights.” ⁱⁱ

Neoliberals agree most resources should be privately owned but nevertheless governments should play a role in ensuring no one falls below an agreed upon minimum standard of living. In other words, neoliberals think capitalism should be “supplemented by a constitutionally limited democracy and a modest welfare state.” ⁱⁱⁱ

Socialists think the state has a responsibility to ensure resources are allocated, and income and output distributed in a manner that promotes social welfare. As the socialist Thomas Piketty put it,

“I am convinced that capitalism and private property can be superseded and that a just society can be established on the basis of participatory socialism and social federalism. The first step is to establish a regime of social and temporary ownership. This will require power sharing between workers and shareholders and a ceiling on the number of votes that can be cast by any one shareholder. It will also require a steeply progressive tax on property, a universal capital endowment, and permanent circulation of wealth. In addition, it implies a progressive income tax and collective regulation of carbon emissions, the proceeds from which will go to pay for social insurance and a basic income, the ecological transition, and true educational equality. Finally, the global economy will need to be reorganized by means of co-development treaties.” ^iv

In summary, capitalism (or democratic capitalism), neoliberalism, and socialism (or democratic socialism), are terms used to characterize economic systems or political economies. But no single term or combination of terms can accurately describe any of the economic systems or political economies that exist, have existed, or might exist in the future. Indeed, when describing any political economy, the devil is in the details. And it is the details that matter most to human rights activists who seek to put in place rules and mechanisms used to enforce those rules that will enable individuals to realize rights specified in the Universal Declaration of Human Rights and other human rights documents.

ⁱ The most famous justification for allowing markets free of government interference to determine how resources are allocated and output and income distributed comes from Adam Smith. In the Wealth of Nations Smith wrote: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” And: “Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” The end Smith was referring to, of course, was the welfare of others. But as few are aware, in The Theory of Moral Sentiments Smith also noted: “the disposition to admire, and almost to worship, the rich and the powerful and despise, or, at least, to neglect persons of poor and mean condition…is…the great and universal cause of the corruption of our moral sentiments.” Even Smith, in other words, recognized a system that enables a few to become fabulously wealthy while leaving many struggling to survive is a system that offends our moral sentiments. A system is socialist to the extent government policies aim to and succeed in correcting those inequities.

ⁱⁱ https://www.cato.org/sites/cato.org/files/pubs/pdf/catos-letters-4.pdf

ⁱⁱⁱ Vallier, Kevin, "Neoliberalism", The Stanford Encyclopedia of Philosophy (Summer 2021 Edition), Edward N. Zalta (ed.), URL = https://plato.stanford.edu/archives/sum2021/entries/neoliberalism/.

^iv Thomas Piketty, Capital and Ideology, The Belnap Press of Harvard University Press, Cambridge, Massachusetts, 2020, p. 1036.