2 Sovereign Masters : Capitalism vs Socialism

“From each according to his ability, to each according to his needs.”
— Karl Marx, Critique of the Gotha Programme (1875)

It’s really hard to be a capitalist and still call yourself an ethical person. I’ve previously written about ethical worldviews endorsed by capitalists, who usually value freedom, liberty, tradition, race, or wealth over the well-being of sentient beings.

This post is not about convincing anyone that they should prioritize well-being. Instead, I am defending two claims :

1. A more socialistic economic system results in the more good.
2. A purely socialistic economic system results in the most good.

Here, socialism simply refers to the state’s involvement in economic matters such as production and distribution, with the goal of maximizing well-being

The first claim is a weaker one, and I am more confident in it—I don’t see how one could reasonably reject it. The second claim is much stronger and requires much more space for me to defend it adequately.

The Value of Equality

Equality don’t have any intrinsic value, but it holds significant instrumental value.

To explain, it’s like currency. The value of currency lies in its purchasing power, not in the physical money itself. Similarly, equality has instrumental value because it helps increase pleasure and reduce suffering.

A capitalist who identifies as a utilitarian may not be fully considering the problem of diminishing value.

For example, $100 does not have the same capacity to increase well-being for me as it does for Anant Ambani. If our goal is to maximize well-being, we should allocate resources to the underprivileged rather than the privileged. Since Anant Ambani derives far less benefit from an additional $100 than I do, we can confidently say that wealth should be distributed more equally to maximize well-being, ceteris paribus.

With this in mind, let’s move on to my first claim

1. Strategic Redistribution of Wealth

Here, the state strategically extracts wealth from the rich—causing only minimal suffering to them—and uses it to significantly improve the well-being of the underprivileged. This is achieved through mechanisms like taxation, affirmative action, adequate minimum wages, and similar policies.

Let’s say Mr. Ambani earns $10 million a year through innovation and business. The government, through taxation, takes a significant portion—let’s say more than 50%—and reallocates it to benefit others. Even after taxation, Mr. Ambani still earns $3 million, which is more than enough to keep him motivated to work.

If Mr. Ambani is selfish, he might feel upset about losing $7 million, but that money would have significantly helped many others. However, if he is a good person, he would recognize that either (1) he was privileged to have access to the capital necessary to generate such wealth, or (2) he has done something genuinely beneficial for society by improving people’s lives.

As a bonus, extensive research shows that altruistic behavior increases long-term mental satisfaction. A study published in the International Journal of Behavioral Medicine found that altruistic emotions and behaviors are linked to greater well-being, health, and longevity. Additionally, the 2023 World Happiness Report highlights that individuals who engage in altruistic acts report higher life satisfaction, fewer symptoms of depression, and increased job satisfaction lasting up to two months after helping others.

The more production is controlled by the state, the more it can provide services accordingly—subsidizing for the poor while increasing prices for the rich—to maximize the good generated from businesses.