We must find an alternative to laissez faire capitalism and state socialism: a middle road that, while it does not satisfy anyone completely, is not overly onerous to the vast majority of the American people. This is my very generalized overview of such a system, that I call social capitalism, to differentiate from anti-social, laissez faire capitalism.

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“Capital as such is not evil; it is its wrong use that is evil. Capital in some form or other will always be needed.”

Mohandas K. Gandhi (1869–1948), Indian political and spiritual leader. Harijan (28 July 1940).

“Real socialism is inside man. It wasn't born with Marx. It was in the communes of Italy in the Middle Ages. You can't say it is finished.”

Dario Fo (b. 1926), Italian playwright, actor. Times (London, 6 April 1992).

“History repeats itself, first as tragedy, second as farce.”

Karl Marx (1818–83), German political theorist, social philosopher. Paraphrase of the opening sentences of Marx, The Eighteenth Brumaire of Louis Bonaparte (1852; reproduced in Karl Marx: Selected Works, volume 2, 1942)

My brother-in-law Tim was visiting his sister (my brother's wife) from St. Louis a few months back, with his friend and fellow retired firefighter Fran (short for Francis) in tow. These are good guys, what they use to call “the salt of the earth.” I am certain that in the encyclopedia under the heading of “representing middle class, Midwest America,” there has to be a picture of these two men, a beer in their hands, watching a Cardinals' baseball game.

We were drinking (ice tea for myself; alcohol is not a good idea for people with bipolar disorder), eating pizza, discussing the politics of the world, and the nation. This included our mutual disappointment that President Obama had not done anything to curb the excesses of Wall Street and the banks. Then Fran made a statement that nearly knocked me off my chair, given the source: that considering the recent actions of the major capitalist institutions, he was willing to try socialism as an alternative. And Tim voiced his agreement.

This made up my mind that I should write down my ideas on the concept of Social Capitalism as quickly as possible, as soon as I had time to organize my notes; without discovering every possible contingency for my system.

Like laissez faire, or anti-social capitalism—or as Marx named it “political economy”—Social Capitalism is a moral system, having its own inherent system of penalties and rewards. Unlike anti-social capitalism, Social Capitalism is a socially positive and humane system; a system whose ultimate goal is to (within the limits of human ability) promote the development and maximize the potential of all humans.

The primary underlying principle of Social Capitalism is that of fairness. It is an ideal that we can never perfectly achieve, because humans are not perfect. One of the first things we must set aside under the concept of Social Capitalism is the false dichotomy of selfishness and altruism, and replace it with the correct dichotomy of selfishness and fairness. The false dichotomy has, in my opinion, represented a roadblock to the cause of human social justice for centuries.

So what are the differences between Social Capitalism, and anti-social capitalism, or as Marx called it, political economy. I will start by giving Marx's description of what he called political economy, from his Economic and Philosophical Manuscripts (p.p. 120-121; 1844), serving it up in easy to digest pieces: “(1) By reducing the worker's need to the barest and most miserable level of physical subsistence, and by reducing his activity to the most abstract mechanical movement; thus he [the capitalist] says: Man has no other need either of activity or of enjoyment. For he declares that this life, too, is human life and existence. (2) By counting the most meagre form of life (existence) as the standard, indeed, as the general standard—general because it is applicable to the mass of men. He turns the worker into an insensible being lacking all needs, just as he changes his activity into a pure abstraction from all activity. To him, therefore, every luxury of the worker seems to be reprehensible, and everything that goes beyond the most abstract need—be it in the realm of passive enjoyment, or a manifestation of activity—seems to him a luxury.”

What Marx is saying here is that for anti-social or laissez faire capitalism, at least in its origins, the economic philosophy of Ebenezer Scrooge at the beginning of Charles Dickens' A Christmas Carol is the working model. If you listen to many conservatives today, they argue that you cannot possibly be poor if you have a car, a television, a VCR or DVD player, or anyone of a number of other items that the average American takes for granted. Essentially, the anti-social capitalist system says that if you are poor, you should give up every human comfort and convenience until you are no longer poor, which reduces the poor to a group of mindless robots whose sole purposes are working and hoarding capital, spending the bare minimum for survival, until they are no longer poor.

Let us continue with Marx's exposition on the subject; “Political economy, this science of wealth, is therefore simultaneously the science of renunciation, of want, of saving and it actually reaches the point where it spares man the need of either fresh air or physical exercise. This science of marvelous industry is simultaneously the science of asceticism, and its true ideal is the ascetic but extortionate miser and the ascetic but productive slave. Its moral ideal is the worker who takes part of his wages to the savings-bank, and it has even found ready-made a servile art which embodies this pet idea: it has been presented, bathed in sentimentality, on the stage.”

How often do we see variations of the Horatio Alger story, the person who starts with nothing and makes himself a success, presented to us in the movies, television, magazines and popular literature. There are self-help books extolling the virtues of those who have accomplished this very feat. There is even a system of so-called philosophy, Ayn Rand's Objectivism, whose basis is that those with talent will get ahead, regardless of any obstacles, simply because of their superior ability. I would argue that most of these individuals get ahead because they are amoral—like the philosophy's founder—without any compunction concerning the human cost of getting ahead. We have seen the effects of sociopaths on our society over the last thirty years, I do not believe it is a path that we should either exalt or repeat. The followers of Ayn Rand forget that, as Colin Greer put it, she was a writer of fiction (“Right-Wingers Believe Ayn Rand's Every Word, But They Forget She Wrote Fiction,” AlterNet.org, October 10, 2009). Her philosophy has no rigor, no substantial objective economic or social examination of society, and no moral basis other than “do what you damn well please,” just like Aleister Crowley, but without the honesty. She is a philosopher for the lazy and those who like simplistic answers, who are seeking justification for their narcissism and selfishness, rather than philosophy's true purpose: discovering the deeper meaning of ourselves.

Marx finishes his description of political economy, or as I call it, anti-social capitalism; “Thus political economy—despite its worldly and voluptuous appearance—is a true moral science, the most moral of all the sciences. Self-renunciation, the renunciation of life and of all human needs, is its principal thesis. The less you eat, drink and buy books; the less you go to the theatre, the dance hall, the public house; the less you think, love, theorise, sing, paint, fence, etc., the more you save—the greater becomes your treasure which neither moths nor rust will devour—your capital. The less you are, the less you express your own life, the more you have, i.e., the greater is your alienated life, the greater is the store of your estranged being. Everything which the political economist takes from you in life and in humanity, he replaces for you in money and in wealth; and all the things which you cannot do, your money can do. It can eat and, drink, go to the dance hall and the theatre; it can travel, it can appropriate art, learning, the treasures of the past, political power—all this it can appropriate for you—it can buy all this: it is true endowment. Yet being all this, it wants to do nothing but create itself, buy itself; for everything else is after all its servant, and when I have the master I have the servant and do not need his servant. All passions and all activity must therefore be submerged in avarice. The worker may only have enough for him to want to live, and may only want to live in order to have that.”

So what Marx calls political economy, and what I have named anti-social capitalism, bases its success on its participants' willingly giving up their humanity for the acquisition of wealth. The secret to success is to become a sociopath, a person lacking human feelings and needs other than the material aggrandizement of oneself. Compassion has no place in the life of this person, or pity, or mercy, or justice or love. They are perfect examples of applied social Darwinism, and piss poor examples of human beings.

There are a lot of people out there who—because they are unwilling or unable to shake a lifetime of indoctrination that Karl Marx and anything that he wrote is an evil lie—believe that Marx is not worth our time or our effort to study. In other words, the individuals who have probably already decided that I am some brand of “commie pinko” who has no idea what it is I am talking about—and this fact is proven by my quoting Marx—and are ready to ignore this article.

Well, I recently discovered that I am joined by eminently good company in my use of Karl Marx to point out the failings of our current form of a capitalist economic system. Paul Craig Roberts, former Assistant Secretary of the Treasury under President Reagan—as well as a one time assistant editor of The Wall Street Journal—is speaking of the foresight of not only Karl Marx, but V.I. Lenin, with regards to our current problems.

Mr. Roberts, in his article “Marx and Lenin Revisited” (OpEdNews.com, October 6, 2009), opens with the following statements:

“If Karl Marx and V. I. Lenin were alive today, they would be leading contenders for the Nobel Prize in economics.”

“Marx predicted the growing misery of working people, and Lenin foresaw the subordination of the production of goods to financial capital's accumulation of profits based on the purchase and sale of paper instruments. Their predictions are far superior to the “risk models” for which the Nobel Prize has been given and are closer to the money than the predictions of Federal Reserve chairmen, US Treasury secretaries, and Nobel economists, such as Paul Krugman, who believe that more credit and more debt are the solution to the economic crisis.”

In the words of the late Howard Cosell, that is telling it like it is.

Before going further into the discussion of Social Capitalism, I think a very short discussion of how I arrived at the terms Social Capitalism and anti-social capitalism is vital before we go further.

I came up with the term “anti-social capitalism” first.

I have made it no secret that I suffer from either Type II or Type III bipolar disorder. I was misdiagnosed for a number of years as suffering from unipolar depression, which is not unusual for these versions of the disease: it is difficult to differentiate hypomanic or cyclothymic episodes from times when things are just going well with your life. It required several years of weekly group therapy before my counselor and I realized what the real problem was with me. (He probably realized it long before I did, and it took him time to coach me into diagnosing myself.)

In my struggles with my illness, I have come to realize that in every form of mental illness there is always one consistent component present: selfishness.

Whether you are in the depths of depression or the unbounded heights of a manic episode, it is all about you, and your pain or elation. If you are paranoid, they are out to get you. If you are schizophrenic, the voices in your head are talking only to you; the visions that you are seeing are only for you. Narcissism is about loving you to the exclusion of all others. Being a sociopath is about what you need, and to hell with everyone else. All of the forms of true sexual deviance are about you getting your jollies, not about sharing life's most intimate experience.

You get the idea.

If selfishness is an invariable component of mental illness, then what does that have to say about an economic system that is based on selfishness? Can an economic system that distorts the fabric of civil society through its overriding emphasis on selfishness be considered healthy? Can we actually draw the conclusion that the economic selfishness exhibited by our society is a component of a deeper underlying illness within our society? I think we can.

Almost sixty years ago, the Rand Corporation created one of the most important models of game theory, “The Prisoner's Dilemma.” Their assumption was that if presented with a choice between cooperation and self-interest—where the outcome of the dilemma was, unknown to the participants, weighted toward self-interest—the participants would choose self-interest. When they tested it on their secretaries, they were surprised that the secretaries overwhelmingly chose cooperation over self-interest. The people at Rand ignored the outcome of this iteration of their test, stating that the secretaries lacked the sophistication necessary for a valid test.

John F. Nash, whose life was featured in the film A Beautiful Mind, at the same time proposed the Nash equilibrium, where Nash assumed that individuals acting in their own self-interest would always arrive at the best possible outcome. While brilliant, Nash was also a paranoid-schizophrenic, whose view of the world was tainted by his illness and its innate selfishness. However, Nash and the Rand Corporation's conservative outlook of fear and selfishness appealed to the military and more conservative elements of the government, who used the fear to create America's nuclear policy of Mutually Assured Destruction.

Twice this policy almost ended civilization, in 1962 and 1986. Yet when Presidents Kennedy, Johnson and Nixon instigated the policy of détente, or cooperation, after the Cuban Missile Crisis, tensions between the super powers decreased until Ronald Reagan was elected President in 1980, and repudiated détente. In 1986 a Norwegian weather rocket almost triggered an automated Soviet nuclear attack, and this time it was the Soviet Union's Chairman Gorbachev who began the new era of cooperation and disarmament.

What is true for international affairs is also true for our economic system. The basic result matrix for the Prisoner's Dilemma says that if both parties cooperate they will get 90% of what they want. If one is selfish and the other cooperates the one who is selfish gets 100% of what he wants and the person who cooperates gets nothing. Finally, if both sides are selfish, the two parties only get 50% of what they want.

When most of us look at the matrix, we see that if we are selfish, we are guaranteed of getting at least 50% of what we want from a particular situation, and we may get as much as 100% of what we want. On the other hand, if we cooperate, the matrix states we only have a 50% chance of getting 90% of what we want, and a 50% chance of getting nothing. This seems like a perfectly sane rationale, and as Marx pointed out, it is, in a purely materialistic sense.

In a purely human and societal sense, it is insane.

In order for it to work, it requires us to treat both ourselves and other people as “things,” not human beings. We must alienate ourselves from our own humanity, and that of our fellow humans, in order for this system to succeed. It is a system which makes perfect sense to a criminal or a paranoid-schizophrenic, or anyone who is fearful that they won't get what they believe is their “rightful” share; which, given human nature, is generally more than they are justly entitled to. It is not a workable system in the long term for any society, because without cooperation, there can be no society.

The matrix for the “Prisoner's Dilemma” says that honest cooperation will always get both sides most of what they want, while experience has shown us that selfishness will potentially get us an unexpected and undesired result, such as global thermonuclear war. If the long-term interaction of large groups of humans is viewed as an indeterminate, non-zero sum game (even though parts of the interaction between individuals may be determinate or zero-sum games), then logically, for the group as a whole, honest cooperation is the best choice for group interaction.

Many years ago, the most overt types of mental illness were called “anti-social behavior” in polite society. For this reason, I named the selfish, sociopathic behavior of laissez faire capitalism “anti-social capitalism.”

If “anti-social capitalism” is the term for the form of capitalism currently being inflicted on our nation, then its opposite must be termed Social Capitalism.

The primary purpose of Social Capitalism is for all of the members of a society to maximize not their earnings, but their potential as human beings. The underlying ideal of the system is that we work to live, we do not live to work. The economic system of Social Capitalism always places people ahead of things.

So what constitutes Social Capitalism?

Three words: fairness, cooperation, and hope.

Social Capitalism does not end competition; in fact the only way to insure fairness within the system is to have a vibrant, competitive market.

Social Capitalism does not end entrepreneurship; in fact the idea of hope demands that this idea is absolutely necessary for the system to work.

Social Capitalism does not spell the end of stocks as a means of investing in a company; but it does recognize that the labor of the employee is as much an investment in a business as capital, and that a business operates better when its workers have a stake in the business, and cooperate as partners, not acquiesce as mindless drones.

Social Capitalism is against conglomerates, trusts, monopolies, mergers and acquisitions, and anything else that expands a business to the point where it loses the ability for ownership to cooperate with its workforce, and in the process, kills fairness, competition and hope, and loses its connection with humanity. We must accept a simple fact: that unrestricted growth is a philosophy for cancer, not for any healthy human enterprise. Moreover, any business that is too big to fail, is much too big to exist; so size must be limited.

Social Capitalism believes that a business has a responsibility to both its community and to humanity as a whole, that supersedes its responsibility to shareholders: if a business cannot produce its product without endangering its community or its customers, it should go out of business.

Social Capitalism is more interested in the survival and prosperity of a business five, ten, or fifteen years down the road, than it is in squeezing an extra dollar per dividend share out of the next quarter. This is best done by dealing fairly with the business' workforce, customers, shareholders, and community. It is not done by driving down wages and benefits, providing your customer with an inferior product, leveraging your stock to buy up competitors, or blackmailing your community to provide you with tax breaks, loans, and beneficial changes in its laws, and then moving when someone gives you a better offer.

Social Capitalism recognizes that only through the production of actual physical products can a nation in the long term remain economically vital, and have a workforce that is capable of purchasing the items the nation produces. The end of the production of material items in favor of the sale and purchase of paper instruments, spelled the beginning of the end for Spain, Holland, and Great Britain as major powers. Vladimir Ilyich Lenin may have been a totalitarian bastard, but he was no fool.

Social Capitalism understands the need for a system of legal checks and balances in every large scale human endeavor. The people who say “we don't need regulation,” or “the market will regulate itself,” are the same people Mario Puzo was writing about in The Godfather, when he stated, “A man with a briefcase can steal more in an hour than a man with a gun can steal in a lifetime.” The only people who don't want cops around are the ones who want to do something they know is wrong without any consequences. To paraphrase James Madison in The Federalist Papers No. 47, “If men were angels, we would need no laws.” As the examples of Enron, Goldman-Sachs, Bernie Madoff and so many others have proven over the last ten years, we are not angels, and Adam Smith's metaphorical “invisible hand” is simply not enough to ensure fairness or justice for all in the financial markets.

Social Capitalism believes in the profit motive, and encourages every business to maximize its profits through superior products, production values, customer service, worker participation, and innovation at every level. However, Social Capitalism does not believe in profiteering, which it defines as the exploitation of human suffering, or social, political, or economic disruptions of the fabric of society, for the benefit of the business, especially in time of war or other emergencies.

Social Capitalism does not condone expediency; it believes in always trying to provide the most equitable solution for all concerned. Expediency invariably leads to unfairness, which eventually becomes institutionalized. By its nature, Social Capitalism demands that all decisions that effect the members of the community be applied equally, but always with the forethought and consideration that we wish to see applied to ourselves.

Social Capitalism recognizes that there are certain societal related business functions which government, by its nature, is better suited to perform than private business. Further, that generally when governments have failed in these functions in the past, it is because of obstruction by those in government who have a vested interest in government not succeeding, usually for ideological or financial reasons, or both.

Finally, Social Capitalism believes in progressive taxation at every level practicable. As President Theodore Roosevelt said (and I am paraphrasing here)those who can best afford to pay the most taxes, are the ones who should pay taxes the most. There is another side to this argument as well: if the wealthy are left with too much hereditary wealth, they will use that wealth to attempt to subvert a constitutional republic and make it into an oligarchy. This happened in Athens, Rome, Holland, and I believe, right now in the United States of America.

Can Social Capitalism work? Franklin Roosevelt's New Deal, a bare bones version of it, worked for thirty-five years until Ronald Reagan began dismantling it. An upgrade of the system, Lyndon Johnson's Great Society, effectively halved the poverty rate in America in less than ten years with programs like Medicare, Medicaid, VISTA, WIC, Food Stamps, Student Loans, etc. Once again, it was torn apart and poverty began to rise under Ronald Reagan and his GOP successors. And the Scandinavian countries, who have gone far past Social Capitalism into a more socialist model, are generally ranked among the happiest people on Earth.

I am certain that I am forgetting or leaving out large pieces that are needed for a complete, working system, but that is all I have time for now. I welcome my reader's comments as always.

Authors Bio:

Richard Girard is a polymath and autodidact whose greatest desire in life is to be his generations' Thomas Paine. He is an FDR Democrat, which probably puts him with U.S. Senator Bernie Sanders in the current political spectrum. His answer to all of those who decry Democratic Socialism is that it is a system invented by one of our Founding Fathers--Thomas Paine--and was the inspiration for two of our greatest presidents, Abraham Lincoln and Franklin Roosevelt, who the Democrats of today would do well if they would follow in their footsteps. Or to quote Harry Truman, "Out of the great progress of this country, out of our great advances in achieving a better life for all, out of our rise to world leadership, the Republican leaders have learned nothing. Confronted by the great record of this country, and the tremendous promise of its future, all they do is croak, 'socialism.'