There is a big difference between capitalism and socialism

May 5, 2013

A writer recently lamented the arrival of a new CVS drug store on the outskirts of Lewes. Aren’t there enough drug stores in the Lewes-Rehoboth area already? she opined. She cited the following: two Walgreen’s (Happy Harry’s), two Rite Aid, WalMart, Super Fresh, Giant, Safeway; another CVS, and the locally owned Cape Pharmacy.

Whether or not intended, this is an argument for central planning. It is the notion that government can or should grant licenses or permissions to business owners to determine what is “best” for the public. “Best,” in this case, would be defined by some governmental bureaucrat who is supposedly smarter than the businessmen running Walgreens, Rite Aid, CVS, etc.

This small kerfluffel illustrates a central disagreement in American economic and cultural life in the second decade of the 21st century. However, it is not new. A generation ago, the same argument could be heard when WalMart began to arrive in small towns across America. And a generation before that, it was the arrival of supermarket chains everywhere.

Much like the anti-CVS writer, the lament was that the big chains would drive out small businesses, especially the historic mom-and-pop businesses that could be found in both small towns and big cities. At first it was the grocery stores. Until the 1950s, grocery stores were locally owned. In those quaint times, a housewife would take her shopping list, hand it over to the grocer and he would retrieve whatever it was she wished to buy. But these grocers also adapted to customers’ wishes by installing shopping carts and checkout lines.

But then came A&P, Safeway and Kroger, to name only three. Not many mom-and-pop groceries survived, though a few did. An example in Lewes would be Lloyd’s. Against all odds, Lloyd Purcell and his family have survived against Super Fresh (A&P), Giant, Food Lion and Safeway.

At various times and various places, loud laments have been raised concerning the “big boys” coming in and taking over or driving out these smaller, usually locally owned businesses. We heard it in my hometown in the 1970s when Super Valu (a Midwestern grocery chain) came to town. A long-time grocery owned by the Shellady brothers quickly closed.

More recently and closer to here, a locally owned pharmacy in Milton lasted awhile against the new Walgreens, but eventually closed as well. The writer cited above lamented her predicted demise of Cape Pharmacy when CVS opens across the street, notwithstanding the fact that Walgreen’s is no more than a block or two away.

Indeed, the Lewes Walgreens probably could use some competition. The service in the Lewes Lowes improved a lot when Home Depot opened less than a mile distant. Competition means both price competition and service competition. Competition in business or the professions sharpens one’s performance. That is one reason why the private sector so often outperforms government in similar situations. In government, as the old Soviet Union discovered, if one doesn’t fear for one’s position job if/when doing a poor job, then a poor job it will be.

So let’s pose this question: What’s the difference between a progressive and a conservative?

A conservative believes that the purpose of a business is to make money for the owner and to provide a product or service that is useful and wanted by the public.

A progressive believes the purpose of a business is to provide jobs for workers and tax revenue for the government. Hence, a liberal also believes that if the business owner gets rich, that the “excess” should be taxed away and given so the government to put it to a more beneficial use.

A conservative believes that he/she is doing a good thing for the community if the business is able to hire employees and pay them a fair wage. Such businessmen also believe in paying taxes.

A progressive, on the other hand, believes that most profits are sinful, especially if they enrich the owner. They also believe that providing a product or service that is useful or wanted by the public is a false premise: The product should be one approved by the elites or it should be stringently regulated if not prohibited.

This is the difference between capitalism and socialism.

Reid K. Beveridge
Broadkill Beach

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