Are there any flaws in reasoning that collectivism can apply within a capitalist economy?



This question has more to do with ideology then philosophy but something seems off in terms of logic.

The Oxford dictionary defines collectivism as:

  • "The practice or principle of giving a group priority over each individual in it".
  • "The ownership of land and the means of production by the people or the state, as a political principle or system".

This is clearly understood in politics when imagining how the will of the group or state was imposed on the individual in the Soviet Union.

However, the first definition could describe the behaviour involved when an employee is fired to save the "greater good" of a company and the second definition would correspond with a cooperative in terms of ownership.

So one distinction seems to lie solely on ownership and in drawing a parallel with the Soviet Union it is not clear if companies actually belonged to the people as the government may have acted out of the will of a single person or small.

This in turn leads to a more subtle distinction in terms of intent which is something which can be difficult to determine.

Are there any flaws in reasoning here?

James P.

Posted 2016-12-19T13:41:13.580

Reputation: 395

Why is this a philosophy question, as opposed to a political one? – Joseph Weissman – 2016-12-19T15:31:47.987

2This is an interesting question, but can you please recast it so that it invites objective philosophical answers? – Alexander S King – 2016-12-19T19:15:33.993

@JosephWeissman the question is missing the logic tag which was removed by Eliran H. What I actually want to know is with respect to any flaws in reasoning. – James P. – 2016-12-19T20:36:02.253

@AlexanderSKing the question has been reformulated. Does this fit the format you wish? – James P. – 2016-12-19T20:37:54.763

@JamesP. The logic tag is for questions about logic. The word 'logic' does appear in your question, but this isn't a question about logic. – Eliran – 2016-12-19T22:23:22.707

@EliranH so the tag is exclusively for discussion logic and not logical reasoning? It has been removed. – James P. – 2016-12-19T22:40:32.090

@EliranH Note that the reasoning tag redirects to logic.

– James P. – 2016-12-19T23:03:02.760


Israel is a capitalist economy that has kibbutzes, collective "utopian communities, a combination of socialism and Zionism", which participate in it.

– Conifold – 2016-12-20T01:33:42.760

1@Conifold I don't think that the OP meant "within" in the way that Kibbutzes operate in Israel - I think he meant to say "Why is it collectivism when the state is enforcing it, but not collectivism when mega-corporations enforce it?" – Alexander S King – 2016-12-20T20:58:59.023



There can be different responses to your question, depending on which definition from the Oxford dictionary you go with.

Based on the first definition:

"The practice or principle of giving a group priority over each individual in it".

"Collectivism" isn't synonymous with "Communism" or "Socialism" nor is it antynomous with "Capitalism" - all of which are economic systems. On the other hand "Collectivism" would be a stance on human rights, ethics and social norms, and should be contrasted with "Libertarianism" or with "Individualism", not with the above mentioned economic systems.

From this point of view both Soviet style communism, and excessive forms of capitalism where large corporate interest impose lifestyle and economic choices on hapless individuals are both collectivist - whether the entity doing the coercion is a government actor or a private corporate interest doesn't really matter.

In fact many leftists and socialist thinkers saw themselves as opposing the collectivism imposed by capitalism.

Marx for example saw the division of labor as a limitation of freedom imposed by the capitalist mode of production: Capitalism force people to be either doctors, or bus drivers, or coal miners, or musicians, etc...whereas in a communist society people would be free to engage in whichever activities they please. In the The German Ideology (1845) he states that:

...while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

Similarly Adorno and Horkheimer, in The Culture Industry saw Capitalism as imposing a unified artistic aesthetic on society, a factory produced bland art that is used to deceive the masses, while legitimate "high" art needs to be free and creative to satisfy human psychological needs.

I have also heard of capitalists who argued that collectivism is a good thing, but then went on a step further by claiming that capitalism is better at achieving collectivism than socialism is, by allowing any individuals to purchase shares in corporations through the stock market, and through things such as employee stock ownership plans. I don't remember the reference for this, but it might have been mentioned in this interview with Herbert Marcuse.

So the direct answer to your question is: Based on the first definition, there is no distinction between collectivism as it applies to communism or to capitalism. Whether collectivism is good or bad, it can be the result of both communism/socialism and of capitalism.

Based on the second definition:

"The ownership of land and the means of production by the people or the state, as a political principle or system".

Based on this definition, it seems that superficially that both communism and capitalism where the rights of large corporations take precedence of the rights of individuals amount to forms of collectivism.

A libertarian defender of (free-market) Capitalism, such as Robert Nozick or Ayn Rand, can argue that nonetheless, Capitalism does preserve individual freedom where socialism/communism don't in the following way:

  • In communist and socialist systems the workers don't have any choices. They are constantly coerced by the government and by restrictive labor laws and union rules (For example in many socialist countries, you are not allowed to just resign from your job, you have to have give several months notice, and your management has to approve your departure). In a capitalist system on the other hand, the worker is free at any time to leave the company if he doesn't like conditions he is working in (Of course he will likely starve to death, but he is doing so of his own free will).
  • In communist and socialist systems, the will of the individual is sacrificed to the "greater good". In capitalist systems, individual workers are sacrificed for the good of the shareholders who also happen to be themselves individuals, i.e. capitalism does focus on individual rights, it's just that is focused on the individual rights of shareholders not the individual rights of workers, and as mentioned above those workers freely entered into contractual agreements with their employers, nobody ever forced them into anything.

So the libertarian will argue that the capitalist system is not collectivist insofar as it protects individual ownership and property rights, which are the only rights that really matter.

Alexander S King

Posted 2016-12-19T13:41:13.580

Reputation: 25 810


The Soviet Union,and other socialist societies such as the current North Korean regime and National Socialist Germany, legitimised their crimes by referring to collectives like the proletariat or the Volk or the party. Such societies also did not give much latitude to individuals to own and run businesses, societies, clubs etc. Rather such organisations were spied ostensibly to check whether they served the state or society.

In reality, a group does not have interests over and above those of its members. People make decisions and hold ideas and values, and set up groups to serve those values. In the Soviet Union, the government acted in the interests of government officials. Government officials would pursue their own hobby horses, e.g. - murdering their enemies by persecuting them as kulaks. This disregard fort the rights of the officials' victims was excused by collectivism. Collectivist ideas also made it more difficult to understand that the government in those countries was a gang of murderers and thieves.

In a capitalist society, people running a business, club etc can run it explicitly in their own self interest. They don't have to lie about their reasons for acting. The society we live in now is a very flawed realization of capitalism as illustrated by the fact that people do have to mouth various platitudes and take some actions to keep the government from persecuting them, e.g. -conforming to environmental regulations, mandates to provide loans to people who can't pay them and so on.

You write:

However, the first definition could describe the behaviour involved when an employee is fired to save the "greater good" of a company and the second definition would correspond with a cooperative in terms of ownership.

In a capitalist society, the company consists of a group of people cooperating for mutual benefit. If one member of the company acts in a way that makes such cooperation impossible, then it is in the individual self interest of the members of the company to stop associating with him and paying him, i.e. - to fire him. This is entirely compatible with individual rights for all of the people concerned. The alternative to being able to fire somebody is to be forced to associate with him and give him stuff, which violates freedom of association and property rights. So firing somebody from a company can be undertaken for individualist reasons.


Posted 2016-12-19T13:41:13.580

Reputation: 6 821

the company consists of a group of people cooperating for mutual benefit. If one member of the company acts in a way that makes such cooperation impossible

What if that member did everything possible to cooperate for mutual benefit and still got fired :p ?

Or an individual outside of the company sees their rights given second priority to that of the company? – James P. – 2016-12-21T18:09:42.523


What if that member did everything possible to cooperate for mutual benefit and still got fired :p ?

In that case the company and the person aren't a good fit for each other and should go their separate ways.

Or an individual outside of the company sees their rights given second priority to that of the company?

I don't know what rights you are talking about specifically. But if they are rights to control your own person and property and a company violates those rights then some or all of its members may have criminal liability. – alanf – 2016-12-22T10:25:51.677

Look no further then the great recession which bumped up Euro area debt by 20%. This and this are perhaps examples of the incredible "collateral damage" that too-big-too-fails have wrought. If Milgram had been alive today he might have wondered if the results of his obedience to authority experiment applied in an economic context.

– James P. – 2016-12-23T04:30:07.750

@JamesP. I'm not quite sure what point you think you're making since you haven't explained it. Too big to fail is a result of government offering guarantees to incompetent financial companies and propping them up in other ways, e.g. - lots of regulation that make new starters expensive, privileged access to money and credit from central banks and stuff like that. There are books about this like John Allison's 'The Financial Crisis and the Free Market Cure'. – alanf – 2016-12-23T08:30:22.593

The point is that this fits the definition of a group getting priority over the individual. Too big too fails need not exist with competition law and regulatory capture does take place. Credit money creation is an immense privilege and regulation can do nothing about money being credit. Gubmint is the usual suspect but the money supply itself is at the hands of self-serving interests.

– James P. – 2016-12-30T08:54:35.507

Oh, and since money is credit, private property is an illusion subject to the willingness to synthesise sufficient money to compensate the amounts destroyed when debts towards banks are paid back. A cynic might say that recessions are convenient for "credit harvests" when collateral is taken and businesses in difficulty provide bargain deals for those with lots of money to spend.

– James P. – 2016-12-30T09:04:01.283

1Too big to fail (TBTF) is an example of a group getting priority over individual rights. In a capitalist society, a company would only be able to get money or other goods by offering goods or services people would voluntarily trade for what the company wants. TBTF involves companies getting money taken without consent. Tax money is taken without your consent: if you don't pay the govt will fine you, lock you up etc. Inflation and credit expansion use legal tender laws that force you to take govt money. So TBTF is an anti-capitalist policy. – alanf – 2016-12-30T09:40:00.923

You focus on taxes but what would say if someone told you that an average of 30% of the price on things you purchase goes directly into someone else's pocket? This is a consequence of rising total debt and taxes partly go towards paying back debt to credit markets. I've calculated that around 40% of tax revenue in my country goes solely towards paying down public debt.

– James P. – 2016-12-30T12:24:45.227

@JamesP. I specifically mentioned inflation and credit expansion by the govt, which they can only do because of legal tender laws. Without legal tender laws, people would not have to take govt money as payment and the govt could not print money and issue credit like it was going out of fashion because nobody would take money or credit from a spendthrift govt. The fact that a load of your money goes to paying off govt debt is a result of anti-capitalist policies. – alanf – 2016-12-30T23:35:31.503

Why "by the govt" when it is banks that create their own money in the form of digital 1s and 0s? This money just happens to have a $, € or whatever slapped onto it because they have a bank licence. All central banks do is attempt to control credit expansion through imposed interest rates and the money multiplier is apparently a myth.

– James P. – 2016-12-31T05:30:26.160

It says on Wikipedia that a central bank MAY introduce new money but "most of the money supply is in the form of bank deposits, which is created by the fractional reserve banking system". The only instances of public money creation have been quantitative easing with smaller preventive "money market operations" going back to when the Bank of England was formed. So basically official currencies are under the control of an oligopoly with a central bank being the lender of last resort when reckless lending ends up wreaking havoc.

– James P. – 2016-12-31T05:43:07.050

Bank money doesn't just happen to have a symbol slapped on it. You are forced to take that money as payment by legal tender laws. Banks have licenses granted by the govt. The central bank can lend to a bank or buy assets with money or credit that it issues, as explained later in the Wikipedia article you cite. There is no reason to have a lender of last resort. A bank is a business: if a business can't make a profit, it should shut down. The govt enables and often openly funds recklessness and stupidity that would eliminate banks in a free market. That's anti-capitalist. – alanf – 2017-01-01T13:40:45.887

And yet the Bank of France claims that the state imposes a currency to allow money from different banks to be interchangeable. Legal tender simply means something that is legally recognised to extinguish a debt. A central bank may lend to a bank but banks in themselves emit most money out there through credit.

– James P. – 2017-01-03T08:28:33.937

If all banks refuse to lend or incapable of doing so how do you compensate for the money removed by downpayment of loans? Today's banks are not businesses in the conventional sense since they can create money on the fly and insolvency isn't for the same reasons. Bailouts and QE did fund recklessness in a sense but the "crime" of governments has been laissez-faire which is a free market principle.

– James P. – 2017-01-03T08:58:53.703


On the occasions when we have got close to a free market in money banks have accepted currency made by other banks for their customers' convenience. See books like "Good Money" by George Selgin and Lawrence White's book on Free Banking in Britain Legal tender means you can't sue if somebody pays in legal tender, even if you don't think the legal tender currency is no good and don't want to accept it.

– alanf – 2017-01-03T09:24:49.067

There are a couple of free market proposals for how to prevent cycles. One is to let banks create money and allow those who can't redeem that money on demand to fail. Another policy is to have a strict policy of dividing loans from money. Money is either out for loan and can't be redeemed until the loan expires, or is kept in the vault for redemption. The govt currently does neither of those things but instead bales out banks and insures people who deposit in banks run by shysters. Banks shouldn't be baled out, and depositors who give money to incompetent bankers should suffer losses. – alanf – 2017-01-03T09:45:15.083

Am familiar with free banking. Do you know how long the average free bank stayed in business and why do think central banks appeared? – James P. – 2017-01-03T10:12:37.503

Btw, the deposit guarantee is an illusion and the EU passed a bail-in directive meaning that depositors will foot the bill in the next crisis.

– James P. – 2017-01-03T10:16:35.367

The Scottish system during its relatively free period had fewer bank failures than the English system. Central banks were invented to avoid limits on money creation and favour the govt's buddies in the banking industry with a cartel. You admit that the govt can't pay deposit guarantees, which means the govt has been lying to the public about offering such guarantees. you think this is a point in favour of govt control of banking? As for the bail in guarantee, EU officials are not known for their honesty or accountability even by the lax standards of govt. – alanf – 2017-01-03T13:09:24.663

Central banks enabling unlimited money creation would make sense but could simply be a band-aid according to this other POV with fears about very specific cases of hyperinflation unknowingly forcing people to depend more and more on debt-based money since 1948.

– James P. – 2017-01-03T19:54:01.087

If government controls banking, it is doing a poor job with respect to electors as the recession has been extremely costly on both sides of the big pond. Banks are not your friend, especially in having caused the instabilities of the 1840s and the great depression as a factor in WWII. If socialists are the "useful idiots" of big government, free market proponents may be the "useful idiots" of this cartel.

– James P. – 2017-01-03T20:19:12.710