My Socialist Mind

Socialism, Capitalism...Do We Understand the Difference

Shortly after we arrived in Portugal I had a conversation with an accountant about the NHR program. I was explaining to him that I did not have a pension, but rather had participated in a 401K that had been rolled over to an IRA. He seemed puzzled by the fact that I did not have a company-sponsored or state-sponsored pension. But when I answered his next question, he was shocked.

My Socialist Mind

He asked,

“Were the 401K funds kept in a government account?”

“No,” I responded, “They are in the stock market…in mutual funds.”

“Wait…wait…couldn’t you have lost money…I need to wrap my socialist mind around this.”

While many Portuguese don’t understand our practices…many Americans don’t really understand what “socialism” is. They rile against Bernie, AOC, and the “Squad” while cashing their Social Security checks each month.

Economic Theory

During the prior election cycle, many Republicans tried to equate socialism with communism. But when I think of socialism and capitalism I think about comparing two economic theories which then impact political decisions.

Perhaps, a “pure” capitalist would not be troubled by Jared Kushner’s response to governors when they were competing against one another for PPE:

“Free markets will solve this…That is not the role of government, ” he is reported to have said. - Vanity Fair

But I am.

And I assume a “pure” capitalist would not support Portugal’s decision to impose a maximum profit margin of 15% on Covid testing kits. But having lived through three category 4 hurricanes in Florida, and the accompanying price gouging that occurred…I see a role for government. A role for someone to look out for the community as a whole.

Football

Oddly enough, a war between socialism and capitalism is currently brewing in the world of European football. I must admit I am not a football (i.e. soccer) fan. If you were to ask me what team I support, I would answer the Philadelphia Eagles (properly pronounced Iggles, by my Philly brethren). So while I am not an expert in the uproar that is currently taking place in European Football…I’ll do my best to frame the issue.

It seems some of Europe’s biggest soccer clubs are forming The Super League which may threaten the existence of the Champions League. Traditionally lesser teams could compete to be part of the Champions League (a socialist approach)…qualifying based on performance. Instead, in a classic “capitalist” play, JPMorgan is underwriting the formation of a league of 15 founding members irrespective of their domestic league performance.

Open competition and promotion/relegation are core pillars of European soccer, so this Super League — which is closer in concept to closed leagues like the NFL or NBA — would alter the fabric of the sport…Europe's wealthiest clubs have long sought a better way to monetize their global popularity.

• By forming their own competition, they believe they can better leverage their brands without smaller, less attractive clubs diluting their value.

• It's a similar dynamic to the one that exists in college football, where most Power 5 leaders are interested in breaking away from the NCAA. — Axios

I have no idea what the outcome will be in the world of European Football…but as an American, it is hard for me to imagine that the outcome won’t be determined by the “fattest cat”.