Capitalism is the greatest wealth creator ever invented. It does have winners and losers. Those who do what they do very well prosper. Those who are not as successful as they might wish can try again. Henry Ford failed several times before his successful Model T made the working class middle class.

Capitalism in its basic form is two or more individuals — or institutions — pooling their resources to do something neither could accomplish alone. Unregulated capitalism tends to be a form of anarchy where the strong prey on the weak for personal gain, monopoly. “The public be damned” — Commodore Vanderbilt (1877).

Capitalism, with a few rules to ensure reasonable competition and prevent monopoly, is still the greatest wealth creator ever known. Competition creates an incentive for constant improvement — more value at a lower cost. Anyone can become wealthy, and the people benefit from having more choice. Properly done capitalism not only creates wealth for the partners, it creates opportunities for additional wealth creators, like workers, suppliers, distributors and even customers.

Capitalism also creates infrastructure, like regulated investor-owned utilities and ports that benefit everyone, including the self-made oligarchs.

Capitalism should not be equated to colonialism. Colonialism it is an effort by the sovereigns of nations with military power to acquire the wealth of less powerful people by any means available, usually military force supplemented with, deceit, disease, murder, rape and religion. Religion is less obvious; it works indirectly in the form of a hollow promise, heaven and an implied threat, hell — a powerful form of deceit.

Colonialism does not create wealth, it just takes the wealth from people and consolidates it in a few other hands while depriving millions of their birthright. The rich get richer and richer.

Capitalism in some ways works like democracy. If something is successful, such as leadership, you keep it and build on it. If something is not satisfactory, you try something else, and vote the bastards out.

Socialism is based on breaking even. A system designed to make everyone equal has little incentive to do more, little motivation to create personal wealth which must be shared. Socialism is the core of many other politics. The basic idea is equality of wealth and responsibility.

Theoretically, each one contributes according to his ability, and each receives according to his need. That can work well as a sub-feature of capitalism. For example, public roads or parks: Everyone uses them as they need, and people or businesses pay taxes according to their ability. This part works primarily because pay as you go becomes incredibly complicated, and the risk of monopoly is small.

Socialism was perfected long ago by bees and ants. Unfortunately, humans are not all clones from the same queen bee, but rather individuals with individual abilities, needs and desires. The trouble with human socialism is that there is always something to covet: The neighbor has newer tools or a flat with a better view.

There is a problem with basic socialism when it is applied to everything. Each contributes according to his ability — or his willingness — but seldom contributes more unless coerced. Some contribute as little as they can get away with, or even sabotage the tools. There is no inherent reward, or motive, to do more than the minimum. Each receives according to his need, if there is enough to go around, but can’t always receive his choice. What if there isn’t enough to go around or, if there’s more than enough, what happens to the surplus?

Pure socialism has only been successful on the small scale of a family, Amana Colony or kibbutz. Small enough for every member to know every other member. Some socialist principals can work within a nation like: police, public health and education. In larger socialist cultures, no one gets wealthy, but some get to live as if they were.

In any large organization, there are situations where someone has to make decisions. Unlike capitalism’s distributed decision making, the decision making is concentrated in a few, where one bad decision harms everyone. Those in a responsible position, who manage the assets, can arrange to acquire access to more of those assets than others.

Technically, they don’t own those assets like a dacha on the Black Sea, government luxury jets, and armored limousines. Eventually, the unevenness becomes obvious, and revolution is in the air.

The people in power, to retain their power and privilege, devote more and more public assets to their personal protection: rigged elections, spies, secret police and more extra judicial force. Socialism on a large scale often degenerates into what we call communism.

Democratic civilization becomes a sham.

Ken Obenski is a forensic engineer and safety and freedom advocate in South Kona. He writes a biweekly column for West Hawaii Today. Feedback is encouraged at obenskik@gmail.com.