Do not believe in anything simply because


 you have heard it

 it is spoken and rumored  by many

 it is found written in your books

 it has the authority of your teachers and elders

 it has been handed down for many generations


 But after observation and analysis,

 when you find that it agrees with reason

 and is conducive to the good 

 and benefit of one and all,

 then accept it and live up to it


 B  u  d  d  h  a



Ebenstein, Ebenstein, and Fogelman:
The Theory of Modern “Isms”

by  Karoon Sosothikul


In the book Today’s ISMS: Socialism, Capitalism, Fascism, Communism, and Libertarianism, Alan Ebenstein, William Ebenstein, and Edwin Fogelman describe the differences and similarities between the modern political-economic systems that have ruled most people’s lives in the 20th century. What is so very interesting about this book is the way that all of these systems, in the view of the writers, are based on the experiences and ideas of England at the Industrial Revolution. The authors make only the single exception of fascism as an economic philosophy and ideology and system that is based on this common heritage.

 Because of this set of beliefs, the work of Adam Smith and John Locke are seen to be very important by these authors. These writers were early thinkers about the meaning of the changes of the Industrial Revolution, and the ideas of Socialists, Communists, Capitalists, and Libertarians can be traced from them.


The authors, for an example, trace ideas that be called socialist back to Plato. But they place the important root of the movement in the writings of Locke, especially when he writes about the importance of the right of people to personal property, which we can defined for Locke as what a person produces from his labor. This is from Locke’s Second Treatise on Civil Government that he wrote in 1690. In this work Locke demonstrated that each person had the right to own himself and the labor of it (p.3). From this the Socialists have come to see that what a person’s labor creates should belong to him or her, and not to anyone else. Interestingly, capitalism also has roots in these same ideas of Locke as well. Capitalists see Locke as a defender of the right of property, that nobody should be unfairly disadvantaged of property.

 Locke, therefore, is a forefather for both capitalism and socialism. The difference between the two is in the way the two ideologies interpret property. Capitalism does not see a person owning the right to all his labor produces. Where property owning is important for the Capitalists is in the owning of the means of production.


  As the authors point to in their chapter on Socialism, the work of Locke was written when most economic activity was on a small scale. But only a half century later, large factories dominated the English economy. The idea that a person owned his labor was hard to settle with the factory-based economy of the industrial revolution.

 Adam Smith was the philosopher of that revolution. It was Adam Smith who wrote the main basic works on the way that markets regulate economic activity. Capitalists are those who take from Smith, the position that division of labor is efficient and that markets are effective mechanism for control, and that it is better for society if the means of production are privately controlled because this diversifies power across the society instead of concentrating it in government (p.23). Since the private owners take the risks of market fluctuations and make a large investment in their private industry, they should own the profits from the labor of the workers, after paying a fair wage.

In contrast, the socialists tend to believe that the profit from the labor belongs with the worker. Since the division of the profits would be difficult in a large enterprise, the Socialists tend to believe that the state should own large enterprises and the profits should be applied to the whole society. They are not generally opposed to private ownership of property or even small enterprise. They only object to the unfair gaining of huge profits by the owners of large enterprise.


A major surprise for many American readers of this book would be how much Socialism the authors see in the American capitalist system. Most government regulation of business which including environmental and consumer protection laws, the Social Security system, anti-trust law, securities regulation laws , all these are typical of Socialist thinking and have been common through most of U.S. 20th century history. Today, as the authors point out, the conservative movement in the U.S. aims to get rid of regulation and other Socialist ideas and come to a truly free market. The many Americans that oppose this movement are unaware that they are in support of Socialist ideas.

Communism is an economic theory of history. Marx saw the Industrial Revolution as being a transformation of society. For Marx all societies are ruled by those that control the means of production, of gaining wealth. With the rise of factories, this means the rise of the middle class as the ruling class. For Marx, private ownership of the means of production does not diversify the economic power, because the class of owners acts together for their own interest. Communism holds that only through revolution will the workers gain control over the wealth that their labor produces.

While Marx went so far as to admit that certain advanced and democratic countries might be able to achieve a proletarian (worker) society, this idea was rejected by Lenin (p. 100). Leninism, which can be seen as practical Marxism, held that only revolution could create the worker’s society. It is an irony of history that the three countries that achieved successful Communist revolutions, Russia, China, and Cuba, were pre-industrial societies. Therefore, the authors point, although Communism was an economic theory that grew from 19th century industrialism, it has only been applied largely in pre-industrial (and undemocratic) societies (p.63). Therefore, the ideas of Marx that can be seen in part to grow from Locke’s idea about the right of a person to his labor, was written about an industrial society that was what Marx experienced in his life, but it came to be applied to economies more at the level of pre-industrial that during Locke wrote.


  Fascism is seen by these writers to be very different from the other ‘isms’ because it has no roots in Locke, Smith, and the English experience. It is a political-economic system that makes the economic is the slave of the political. It is an organizing of the whole society to meet the goals of the single-party system and the leader. As the writers say, it is a system for dealing with conflicts in a post-industrial society by suppressing conflict, usually with brutality (p.63). Fascism succeeds, so far only temporarily, because it mobilizes mass support and lines every one up to achieve specific programs which usually a state of constant warfare.

 Fascism is a private-ownership but central-planning system. This can be seen to be in many ways a combination of all the worst parts of the systems that come down from the tradition of Locke and Smith. The capitalist idea of private ownership of the means of production means that workers have little power. But the socialist idea of central planning means that markets are not the regulators. Instead, economic rule is by order from the leader, aimed at non-economic programs.

 What is important to notice about fascism is that even if it does not come over philosophically from the same tradition of the other ‘isms,’ it does break out to respond to the tensions created by the industrialism that created the other ‘isms.’ It is a response to the Industrial Revolution, just like the others.


All of these ‘isms’ are responses to different ways of interpreting the reorganization of society that was formed by the Industrial Revolution. It is true for many believers that their own economic theory becomes very much like a religion. Communism has often be called a godless religion, and reading writers like Milton Friedman lets a reader know that the Neo conservative capitalists see the free market almost in a religious light. The devotion of socialists to the cause of government intervention to protect workers and the disadvantaged is also like a religious feeling.

  But no economic theory is predictable. No economic theory is presented to us by God. The Marxists are right when they write about the importance of economics to history. But in history, as these authors are very clear in showing, is also important to economics, and economic theory.

 All of the economic and political theories, ‘isms,’ that they discuss are a response to specific changes in the way that society is organized which was caused by industrialization. This “Industrial Revolution’ is a fact, historical fact, and what happened can not be changed. What can be changed is the meaning that people see in these events, and those meanings have changed and it continue to change. The ‘defeat’ of communism by capitalism is not necessarily a ‘victory’ of capitalism. It is no sure thing that capitalism will be the dominant ‘ism’ that organizes economic activity at the end of the 21st century . For right now, capitalism touched heavily with socialism, seems the most efficient economic organization. But that can, and probably will, change as time goes on.


Ebenstein, Alan, William Ebenstein, and Edwin Fogelman. Today's ISMS:
 Socialism, Capitalism, Fascism, Communism, and Libertarianism.
Upper Saddle River, NJ: Prentice Hall, 2000.










OK Economics was designed and it is maintained by Oldrich Kyn.
To send me a message, please use one of the following addresses: ---

This website contains the following sections:

General  Economics:

Economic Systems:

Money and Banking:

Past students:

Czech Republic

Kyn’s Publications

 American education

free hit counters
Nutrisystem Diet Coupons