Reader Drew wants to know if the Khan Academy’s free education policy is socialistic.

Although unasked, the same question seems to apply to me.

Reader Drew writes …

Hi Mish

I know you are a fan of Sal Khan and Khan Academy. I’m wondering if you were aware of his background, his brilliance, and his decision to give away his courses for free.

My question is do you consider what he is doing socialism? How does one explain his decision not to use his brilliance for personal gain and instead to donate his time and energy on something he gives away for free? Isn’t that a contradiction of capitalism?

Many thanks.


Definition of Socialism

What’s contradictory about it?

To address that question, please consider a Definition of Socialism.

Socialism: a way of organizing a society in which major industries are owned and controlled by the government rather than by individual people and companies.

In the modern era, “pure” socialism has been seen only rarely and usually briefly in a few Communist regimes. Far more common are systems of social democracy, now often referred to as “democratic socialism,” in which extensive state regulation, with limited state ownership, has been employed by democratically elected governments (as in Sweden and Denmark) in the belief that it produces a fair distribution of income without impairing economic growth.

In general, socialists believe in higher taxes and equatable distribution of wealth via government ownership, wealth redistribution schemes, and higher taxes on the wealthy.

Giving away things for free does not make one a socialist.

My blog is free. ZeroHedge’s blog is free. So is the Acting Man blog. None of us are remotely socialistic.

Yes, we make money off our blogs from advertising.

Ironically, making money off blogging was never my intent. I launched my blog in hopes of being discovered a writer. It never happened. No one wanted me.

The Motley Fool turned me down for an opening they had for a writer even though I had a very popular forum on that site at the time.

For me, making money at blogging required 18 hour days, nearly 365 days a year, for three years before I made more than a few hundred dollars a month off Google ads.

ZeroHedge is a master. He took things to the next level, very quickly.

Let’s go another level higher. Quarter after quarter Amazon.Com loses money or makes little. Is Amazon a socialistic company?

Losing money or giving things away for free while making money is not socialistic in and of itself.

None of us promote government ownership of things or massive wealth redistribution schemes. At least I don’t.

Neither I nor Khan make demands of others. We do not propose robbing from the rich to give to the poor. We do not whine for higher taxes. We do not whine for government takeovers.

Don’t confuse either “free” or “nonprofit” with socialism. Neither term is in the definition.

Government and Fed interference has driven up prices. Everything government touches drives up costs.

Free market capitalism reduces costs. Free is the ultimate in capitalism but the Fed and public unions fight free vehemently.

Mike “Mish’ Shedlock