Politics and economics are far more complicated than most people want to admit. People see the world in black and white. Either you’re a capitalist or you’re a socialist. Socialism and capitalism are seen as mutually exclusive systems of resource management. If you are a socialist then you oppose capitalism. If you are a capitalist then you oppose socialism. However, the two are not mutually exclusive and can interact in such a way that the result is greater than the sum of its components.
First, what is socialism and what is capitalism? Socialism is an economic system characterized by either government ownership or collective ownership of the means of production. The collective ownership component is what we are interested in for this discussion. Socialism does not have to be government or forced control. Many of the founding thinkers in socialism were anarchists, and guild socialists like G.D.H. Cole were libertarians.
The shared resource system used by families, food cooperatives, credit unions, etc are all systems characterized by shared ownership (or really stewardship) of the means of production. There are many forms of socialism, depending on the “collective.” There is user socialization, where the users are the owners and there is producer socialization, where the producers are the owners.
Capitalism on the other hand is characterized by “private” ownership of the means of production. In capitalism, there are owners, and the excess of production is transferred to the owners, as profits. So what is social capitalism? Social capitalism is any system which integrates both of these characteristics, either in a single institution, or through multiple institutions working together. Social capitalism has many useful features. While many argue that capitalism fails to take care of the “tragedy of the commons,” social capitalism has shown itself to be able to do so.
Food cooperatives are a fine example of social capitalism. Food cooperatives are member owned. In order to access the resources of a food cooperative, you must be a member. This is an example of user socialization. Food cooperatives are not specifically non profits. Some may reinvest all profits into their business, but many also distribute the profits back to the members. They do this using “patronage dividends.” Patronage dividends are essentially rebates, based on how much the member has spent at the food cooperative, during the prior tax season.
For an example of social capitalism taking the form of two different entities, as well as how social capitalism can help deal with the “tragedy of the commons”, consider the issue of conservation. It is certainly important that we protect our land. However, why would any person simply buy a chunk of land and leave it alone, or worse yet, allow people to use it and get nothing in return? A few people might do this, but not many will. Social capitalism can step in with a two part solution.
First, a non profit organization would purchase the land, probably by using funding which was donated to it. The job of the non profit would be to ensure that the land is protected. Of course, protection does not mean letting it sit.
That’s where the next component enters into the mix. People like to go to parks, but they might want to do something at the park. The solution is obvious. Get vendors. These vendors would benefit from all the people coming to the park, and the people would come to the park because of the vendors. These vendors would also supply additional revenue to the non profit so that it could sustain itself.