"Latin Spring:" Beyond Socialism and Capitalism in Latin America

Since the introduction of the “capitalist” and “socialist” terminology, political forces have pushed the world to choose one or the other.  Before the distinction was embraced, capitalist countries like the United States and socialist countries like Cuba pursued policies based on pragmatism, not ideology.  Faced with the potential of a “Latin Spring,” Central and South America need to overcome their socialist legacies and their failures to embrace sound capitalist policies in order to build better governments and economies.

Making the intellectual distinction between capitalist and socialist policies is only useful when it is done to understand how public policies work.  Both “capitalism” and “socialism” represent two ends of the same economic spectrum.  Beyond ideologies that have tainted the capitalist-socialist debate, the fundamental difference between capitalism and socialism is that capitalists rely on automated mechanisms to regulate their economies; whereas, socialists rely on manual mechanisms to control their economies.

Looking at how the Chinese government has continued to react to the collapse of its stock market by seizing control of its economy, the Communist Party’s lack of confidence in the effectiveness of economic mechanisms it engineered is very apparent.  Much of South America shares this same lack of trust in capitalist policies thanks to a long history of self-serving power elitist who engineered their national economies to enrich themselves and impoverish everyone else.  Because socialist policies have delivered immediate and steady benefits to the impoverished, socialism has an obvious appeal.

Recognizing the interventions of the George W. Bush Administration during the onset of the Great Recession, it is evident that all governments have a natural inclination to intervene when faced with economic threats, i.e. abandon capitalist ideals.  For the United States, a legacy of self-serving capitalist policies has also resulted in sharp income inequality and growing poverty, which does feed populous outrage.  At the same time, socialist policies have failed the People of the United States while the same is true for all Americans. 

It is important to remember economies solely exist to distribute wealth in order to provide for the needs of the people.  What feeds a lack of confidence among socialists is the sense that capitalism exists solely to redistribute a country’s wealth to the elites.  Socialism is supposed to force equal distribution.  Capitalist policies can, however, be more efficient, because their automated nature allows an economy to immediately adapt to changes and avoid the ill-effects of human error policymakers introduce when under political influence. 

For the capitalist, the ability to earn a higher socioeconomic standing and profit from one’s labor, intellectual property, or financial investments is a sign of a healthy economy.  Capitalists see the value in rewarding those who make industries more efficient and grow the economy through innovation.  They have confidence that capitalist policies can be engineered to distribute wealth in the most efficient means possible, i.e. to provide for the needs of people and the need for sustainable economic growth. 

On the other hand, wise capitalists understand economic policies can be engineered to harm an economy by enriching the few at the expense of the many, which is often seen in socialism.  Wise capitalists are not blind to the self-serving nature of mankind as well as the tendency of elites to legitimize, solidify, and consolidate their power through economic means.  A blind pursuit of capitalist ideals has encouraged the shunning of anything remotely socialist in the United States.  This includes necessities like unions and proper regulation, which are needed to achieve a healthy capitalist economy. 

Unfortunately, South America’s failed experimentation with capitalism throughout the years has not been enough to overcome its socialist legacy.  Socialism has simply created a dependency on corrupt, self-serving governments that cannot provide for all the needs of their Peoples while capitalist reforms have been used to legitimize the impoverishment of the many.  Because shifting favoritism toward capitalism and socialism always ends in disaster for the Americas, there needs to be an embrace of balanced, pragmatic policies that will help build economies that provide for the needs of the many Peoples in the Americas.