Sunday, 20 February 2011

Democracy is Communism

Today I had a discussion with a family member about politics at a Thai restaurant. We were talking about a news article that talks about Hosni Mubarak's massive fortune. The discussion veered off into wealth inequality and communism.

The richest 2% of the world own 85% of the wealth, which is an incredibly unequal distirbution of wealth. Some people believe that this economic inequality is normal and that there is nothing wrong with it. Personally, I do not like the idea of the bulk of the wealth being in the hands of the few. Perhaps it is jealously, or perhaps I don't like the idea of the rich holding all the wealth and using it to work the rest of us like slaves. Either way, regardless of my feelings, I am confident that the majority of the world's population would want wealth to be spread rather evenly among everyone. A survey in America showed that just about everyone (even those earning very high incomes) believe that wealth should be spread more evenly. According to the survey, most Americans believe that the top 20% own only about 60% when in fact the top 20% own 80% of the wealth in America. However, most Americans believe that the top 20% should own 20% only.

If Americans (or every human in general) so overwhelmingly support wealth being in the hands of the people rather than the few, why don't they support communism? The theory of communism states that wealth in the form of income-producing assets (e.g. land, factories, businesses, etc) be owned by the people rather than the few.

What is clear from looking at the definition of communism is that it is almost exactly the same as the definition of democracy. The word democracy is made up of the word "demo" that means "people" and the word "cracy" that means "rule." Hence democracy literally translated means "rule by the people." In other words, the people are in control. Given that most people support equal distribution of wealth then it follows that democracy if properly implemented will inevitably lead to communism. If you speak to the average person on the street, he will likely support democracy and even support the distribution of wealth, but he will also likely oppose communism. I believe that popular opposition to communism is the product of most people not understanding what communism actually is. Most people seem to confuse communism with dictatorship, probably because many dictators use communism as an excuse to gain popular support before they sieze power for themselves. A dictator may be communist initially but as he gains power the temptation to sieze all power and wealth for himself is so great that he effectively renounces communism by his decision to sieze power and wealth for himself. Dictatorship is not communism as the dictator owns everything, not the people.

When you talk about communism, inevitably people will talk about how communism does not work in practice. I actually agree that pure communism is difficult, if not impossible to implement. The problem is that humans need leaders otherwise there is confusion about what to do. As leaders are formed, temptation is there for leaders to sieze power and wealth. Even if a system were set up that takes money from the rich and gives it to the poor, this would remove the incentive to work. When you go to work, you work hard for your boss because you hope that one day you may replace your boss and earn more money. But if the boss is paid the same amount as ordinary workers, why would an ordinary worker bother trying to work hard? Because there is no incentive to lead, nobody leads, nobody works, and nothing gets done. In practice this leads to empty shelves at supermarkets, as we saw on television as the Soviety Union collapsed.

I therefore do not think that pure communism is wise and some degree of income inequality is necessary to give people a reward for working. If nobody works, there will be no food grown and no shelter built, and we will all die.

The answer is to implement a system that tolerates wealth inequality but limits it to a degree with communist-style policies that take money from the rich and give it to the poor, e.g. progressive income taxes. In fact, most countries, e.g. America and Australia, already have progressive income taxes. Furthermore, Australia also has a generous universal public health insurance scheme called Medicare.

The main point of this blog is to illustrate that communism should not be a dirty word. Communism is merely the spreading of wealth into the hands of the people and the implentation of communist policy and law is normally the by-product of democracy and elections as most people want wealth to be spread evenly. Given that a country like China has no election and hence the people do not have any way of expressing themselves and given that the income inequality in China is so high (China's Gini coefficient is around 47, higher than Australia's 30) it would seem as if the wealth in China is in the hands of the few, which is hardly compatible with communist theory. I would argue that based on Australia's democratic system and high redistribution of wealth from the rich to the poor, that Australia is much more of a communist country than China is.

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