When I have commented online that no, European countries are not socialist, they are in fact capitalist (most of them engaging in welfare capitalism), some people have responded that no, in fact what they have is "mixed economy". In other words, partially capitalist, partially socialist.
Is that the case?
It all boils down to how you want to define the terms "capitalism" and "socialism".
The problem I see with this claim (according to conversations I have had) is that these people seem to only accept absolutely extremist definitions of those words. To them, "capitalism", true such, is pretty much in essence a synonym for anarcho-capitalism. In other words, private corporations literally own every single penny, dime and cent of the capital and economy, and have 100% free range to engage in any form of commercial activity they want, with literally zero interference from the government, and zero taxation. Moreover, the government literally owns zero capital and does not participate in the economy of the country in any way, shape or form (other than, perhaps, providing a framework under which commerce can happen, such as maintaining an official currency.)
Thus, they argue, if the government itself owns capital and engages in commercial activity, and/or regulates private corporations and taxes them, it's not "pure capitalism" anymore, but "mixed economy". They see the government owning even part of all the capital of the country, and engaging in or regulating commercial activity, as being inherently socialist. The more capital the government owns, and the more commercial activity it engages in, and the more it regulates and taxes private corporations, the more "socialist" the government is.
However, I don't think that's how "capitalism" and "socialism" are actually defined.
Capitalism is not defined as anarcho-capitalism, ie. zero interference from the government and zero taxes ("anarcho-capitalism" might be defined like that, but not the more generic term "capitalism"). Capitalism is defined as the private ownership of the capital and means of production being legal and being actively used to run the economy of the country.
I don't think there's anything in the definition of capitalism that would stop the government from also owning capital and means of production, as long as this means that the government is simply yet another competitor in the market. The government might not be a private entity, but for all intents and purposes, from the perspective of the economy, the government is just another competitor.
Where it stops being capitalism is when the government has a monopoly status enforced by law. In other words, when competition on a specific market or industry by private corporations or citizens is forbidden via legislation, with the government being the only entity that can legally own and engage in that type of commercial activity.
If this is the case with all of the country's economy, that's when we have pure socialism.
I would agree that a country does have "mixed economy" if there is a part of the economy where the government does indeed have legally enforced monopoly status, and competition by private entities is banned by law, while other parts of the economy and industry may be run by private entities. Some countries might in fact have something like this in place, with some very specific forms of commercial activity.
(Note that the government heavily regulating and/or taxing some type of commercial activity, eg. the import and sales of certain products, is not the same thing as having a legally enforced monopoly status on that thing. It's a question of ownership, and whether private entities are legally allowed to own and engage in that type of activity. If only the government can own it, and private ownership is banned, that's when we are talking about socialism.)
Is that the case?
It all boils down to how you want to define the terms "capitalism" and "socialism".
The problem I see with this claim (according to conversations I have had) is that these people seem to only accept absolutely extremist definitions of those words. To them, "capitalism", true such, is pretty much in essence a synonym for anarcho-capitalism. In other words, private corporations literally own every single penny, dime and cent of the capital and economy, and have 100% free range to engage in any form of commercial activity they want, with literally zero interference from the government, and zero taxation. Moreover, the government literally owns zero capital and does not participate in the economy of the country in any way, shape or form (other than, perhaps, providing a framework under which commerce can happen, such as maintaining an official currency.)
Thus, they argue, if the government itself owns capital and engages in commercial activity, and/or regulates private corporations and taxes them, it's not "pure capitalism" anymore, but "mixed economy". They see the government owning even part of all the capital of the country, and engaging in or regulating commercial activity, as being inherently socialist. The more capital the government owns, and the more commercial activity it engages in, and the more it regulates and taxes private corporations, the more "socialist" the government is.
However, I don't think that's how "capitalism" and "socialism" are actually defined.
Capitalism is not defined as anarcho-capitalism, ie. zero interference from the government and zero taxes ("anarcho-capitalism" might be defined like that, but not the more generic term "capitalism"). Capitalism is defined as the private ownership of the capital and means of production being legal and being actively used to run the economy of the country.
I don't think there's anything in the definition of capitalism that would stop the government from also owning capital and means of production, as long as this means that the government is simply yet another competitor in the market. The government might not be a private entity, but for all intents and purposes, from the perspective of the economy, the government is just another competitor.
Where it stops being capitalism is when the government has a monopoly status enforced by law. In other words, when competition on a specific market or industry by private corporations or citizens is forbidden via legislation, with the government being the only entity that can legally own and engage in that type of commercial activity.
If this is the case with all of the country's economy, that's when we have pure socialism.
I would agree that a country does have "mixed economy" if there is a part of the economy where the government does indeed have legally enforced monopoly status, and competition by private entities is banned by law, while other parts of the economy and industry may be run by private entities. Some countries might in fact have something like this in place, with some very specific forms of commercial activity.
(Note that the government heavily regulating and/or taxing some type of commercial activity, eg. the import and sales of certain products, is not the same thing as having a legally enforced monopoly status on that thing. It's a question of ownership, and whether private entities are legally allowed to own and engage in that type of activity. If only the government can own it, and private ownership is banned, that's when we are talking about socialism.)
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