Ch 2.7 | 👊Can you define socialism?
I want to be on the record that I believe in the free market economy. Unfortunately, it doesn't exist. Not here in America. Not anywhere on the planet. (More on this in the section on capitalism and monetary policy.)
And, I want to be crystal clear on this point, I believe capitalism has done more to lift people out of poverty than any other system. That said, our society is facing peril because we have not provided equal opportunity. So now we have to deal with it!
I want to say at the outset that I find the perpetuation of class warfare to be dangerous and absurd. The working class is the heart of America! And, it's the vast majority of Americans! So why do so many of our leaders seem to hate the vast majority of Americans?
What I object to is the dogma and the fear-mongering about things most people don't take the time to understand. For example, it does seem that nothing is more misunderstood in American politics (especially in "conservative media" outlets) than the word “socialism.” The right loves to use it as a slur to criticize anything that doesn't advance the investor class agenda or helps the working class, including things like minimum wage increases and Medicare for All.
Here's an example of the hyperbole that I hate. Fox News once used the word "socialism" to criticize Warren Buffett when he publicly supported raising taxes on the very wealthy. Enjoy this moment of zen:
I'm appalled by the depths that Fox News will sink to further the conservative agenda and propaganda!
The vilification of socialism prevents reasonable people from discussing the merits of different systems of government. The duopoly has embarked on a decades-long crusade to create “enemies” on both sides of the spectrum and we have allowed ourselves to be manipulated. It's ironic to me that political extremes, while differing in their messaging and approaches, all undeniably lead to the same result. I say that because history seems to have taught us that most authoritarian dictators have risen out of populous movements that cloak themselves in "leftism," "socialism" and/or “communism.” So is it fair to think that the left and the right are cut from the same "ant-iestablishment" cloth? Do they suffer from the same unreasonable, bigoted thinking that ultimately ends in the elimination of freely elected democracies?
Let’s reflect on this a bit and see where it takes us.
Liberalism and leftism have almost nothing in common
For decades, I bought into the GOP talking points that conflated the Democratic Party with leftism, socialism and communism.
Before I dive into what I’ve learned, here’s something worth watching! While I don’t agree with everything he espouses, I have always found Dennis Prager to be a very smart and thoughtful person. He frames the issue well and it’s from a very staunch conservative whom many of us respect.
He lists six examples of the differences between what leftists and liberals believe.
I completely agree with Prager — at least definitionally. I believe that the party establishments and the media love to use terms like “conservative” and "liberal" to create an enemy to rally against. They appeal to our primitive tribal nature and our fears.
Journalist and author Bari Weiss, in a fantastic article titled "Stop being shocked," wrote about what the word "liberal" means. Her definition of liberal aligns with what Prager said, it resonates with me the most:
Not liberal in the narrow, partisan sense, but liberal in the most capacious and distinctly American sense of that word: the belief that everyone is equal because everyone is created in the image of God. The belief in the sacredness of the individual over the group or the tribe. The belief that the rule of law — and equality under that law — is the foundation of a free society. The belief that due process and the presumption of innocence are good and that mob violence is bad. The belief that pluralism is a source of our strength; that tolerance is a reason for pride; and that liberty of thought, faith, and speech are the bedrocks of democracy.
The liberal worldview was one that recognized that there were things — indeed, the most important things — in life that were located outside of the realm of politics: friendships, art, music, family, love. This was a world in which Antonin Scalia and Ruth Bader Ginsburg could be close friends. Because, as Scalia once said, some things are more important than votes.
Crucially, this liberalism relied on the view that the Enlightenment tools of reason and the scientific method might have been designed by dead white guys, but they belonged to everyone, and they were the best tools for human progress that have ever been devised.
Racism was evil because it contradicted the foundations of this worldview, since it judged people not based on the content of their character, but on the color of their skin. And while America’s founders were guilty of undeniable hypocrisy, their own moral failings did not invalidate their transformational project. The founding documents were not evil to the core but “magnificent,” as Martin Luther King Jr. put it, because they were “a promissory note to which every American was to fall heir.” In other words: The founders themselves planted the seeds of slavery’s destruction. And our second founding fathers — abolitionists like Frederick Douglass — made it so. America would never be perfect, but we could always strive toward building a more perfect union.
This is the definition of liberal that resonates with me. Not the politicized version proselytized by the duopoly.
Is corporate welfare socialism?
So, if the real issue with socialism or even communism is that we have created a false equivalency between those philosophies and the hard-right dictators who exploited populous uprisings to their own authoritarian ends, where can we look for a common sense approach to a more moderate form of social welfare that closes the wealth gap and leads to better outcomes for our citizenry?
We have to be honest that we have a form of corporate welfare here in America. Today's government loves entitlement programs as long as they benefit the top quartile of American citizens, through subsidies, tax cuts, etc.
Philosophically, do you really see any difference between socialism and the GOP’s approach to governing? We’ve all seen Biden’s attempts to effectuate a massive student debt relief program. I’ve heard many people tell me this is outrageous. First, what’s outrageous is that we’ve allowed colleges and universities to do to the cost of tuition in America ... while the quality of education has deteriorated across the board. I didn't agree with the legal strategy Biden used but the idea of providing debt relief to college graduates isn't an anathema to me. And in "The culture wars" and "Our education system is failing us," you will get a better sense of my opinion on the quality of our education here in America.
But looking past that, is there really a difference between “socialism” and let’s say PPP and ERC monies, or trillion-dollar bailouts, or massive tax cuts for the ultrawealthy? Yes, there is ... but if you’re honest with yourself, the only difference is the recipients of that money!
If you agree with the Republicans, then you likely believe that if/when the top quartile (e.g., the investor or shareholder class) gets a government subsidy then it’s NOT socialism. If the bottom 70% get it, then it IS socialism. This is why we have a class war in our country. This is why the investor class has pitted themselves against the working class to gather and keep more resources.
Again, I’m not suggesting we embrace policies that create disincentives to work, and to work hard. Nor am I suggesting that we embrace policies that create equal outcomes. In my perfect world, we would introduce fairness into the system. Embrace Conscious Capitalism and ensure that the businesses in our country work to find the solutions, to employ people and give them a path to the American dream. Love or hate Silicon Valley, but its version of socialism is one I’m very familiar with after 30+ years as a serial entrepreneur running venture-backed startups.
And this approach is spreading from Silicon Valley to Wall Street! As reported by the Wall Street Journal:
In April 2022, KKR's global cohead of private equity Pete Stavros launched Ownership Works, a nonprofit that seeks to promote shared ownership. Apollo, Ares, and Silver Lake are among the 19 firms that have backed the program.
The private equity titans see granting shares to rank-and-file employees as part of an effort to reduce income inequality, at a time when the industry's massive profits have come under fire from lawmakers, including senators Bernie Sanders and Elizabeth Warren.
When Ownership Works launched two years ago, it set the goal of generating $20 billion in wealth for low and middle-income employees over the following decade.
By ensuring that the workforce has an ownership stake in the company, we align incentives between the investor and worker. As a result, tremendous wealth has been generated and used to enrich the lives of millions of “workers.” I discuss this further in the capitalism & monetary policy section.
If Jon Stewart is too far left for you, I apologize, and while I don’t always agree with him, I can’t deny that he’s smart, insightful and entertaining. Either way, this clip is worth watching.
And looking at Venezuela and other socialist countries, we can see that the only way we will become a socialist nation is if we continue to allow all the growth and gains in productivity in America to go to the top quartile. We need to ensure that everyone can participate in the American dream. And those of us who have already been fortunate enough to “make it” need to realize we have enough and it’s time to allow others to participate or there will be a civil war and/or a political overhaul that will lead the far left to institute true wealth taxes and will erode our hard-earned after-tax dollars.
In the next video, Stewart asks Rep. Rosa DeLauro, then the chair of the House Appropriations Committee, why our tax system is so broken and how we can make systemic changes that will make it more fair and accessible for taxpayers – and less profitable for middlemen and lobbyists.
If you're interested in learning more about where our tax dollars actually go, watch the second episode of season 2 of The Problem with Jon Stewart.” Whether you agree with his “politics” or not, he provides an interesting framing of the issue of how our purported free market economy actually works.
The political spectrum
Unfortunately, most Americans don’t have a clue what socialism is and they definitely don’t know how “democratic socialism” fits into the whole picture. And I'm not talking about one political party (e.g., the Democratic Socialists of America) or another. The political parties in America rarely align their ideology directly with the definitions below.
The fact is that the traditional definitions of socialism don’t actually fit the current political narratives in the United States. Let’s take a look at where these terms came from and where they are across a political spectrum.
Historically speaking, socialism was seen as somewhat of a halfway point between pure capitalism and pure communism. Under this spectrum, democratic socialism fits somewhere in between capitalism and socialism. And the policies that Sen. Bernie Sanders and others are proposing, things like “Medicare For All” and free college, would fall somewhere between capitalism and democratic socialism, an area that analysts typically call “social democracy.”
So what do all these ideologies mean in simple terms?
Capitalism
Capitalism is all about letting the free market generate unlimited profits for corporations and individuals. The downside of capitalism is that when it’s unregulated, it leads to things like child labor, contaminated air and water, and the concentration of wealth in the hands of very few.
Communism
Communism is about creating a classless society with absolute equality where the government dictates the price supply and distribution of goods. Unlike social democrats, who believe that social change should happen gradually, legally and peacefully, communists often think that in order to transform society, the proletariat must rise up in a revolution, even a violent one if necessary. The obvious downside of communism is that the only practical way to redistribute wealth with absolute equality is by force, so these governments usually end up becoming authoritarian regimes.
Socialism
Socialism arose as an attempt to merge the best parts of capitalism with the best parts of communism. The traditional definition of socialism basically says that there should be some free market systems to determine supply and demand of products but that the government should own the country’s major industries so that the people can benefit from most of the wealth. The downside to socialism is that it’s very vulnerable to corruption. If the people running the traditional socialist system are corrupt, socialist governments will also skew towards authoritarianism.
Democratic socialism
So what about democratic socialism? Democratic socialists still believe in social ownership of major industries, either through the government or through work or alliances, but they reject two main aspects of traditional socialism. First, they sharply reject any type of undemocratic or authoritarian system. Second, they reject the Soviet-style planned economies where the government determined the price and supply of goods. There’s a lot of debate about what exactly democratic socialism entails, but in essence, democratic socialists believe that workers should enjoy a larger share of the profits that they are helping to generate. They also believe that strong social safety nets are essential for the stability and long-term growth of society.
Social democracy
Social democracy is a form of socialism that focuses on reconciling free-market capitalism with state intervention and creating change gradually and peacefully. So, unlike communists, social democrats do not consider capitalism to be contradictory to socialism. While social justice is an important concept in social democracy, social democrats tend to favor equality of welfare and equality of opportunity over equality of outcome. Equality of welfare means they accept that in society we cannot ever have true equality and as such what we should aim for is that every person in a society has a basic standard of living. Equality of opportunity means that everyone should start from a level-playing field and have the same opportunities as each other without barriers for some and not others.
Ok, lightning rod time ;-)
I’m about to go deeper on Bernie Sanders. Don’t freak out, folks, just hear me out. I would never vote for him, so this is not an endorsement. This is merely an intellectual discussion around policy.
It’s interesting to note that America’s most famous self-described democratic socialist is opposed to the idea that the government should own the country’s major industries, which in economic terms are called the “means of production”. Remember, Sanders is not a member of the DSA, he's an independent.
Speaking at Georgetown University in 2015, Sanders said:
So the next time that you hear me attacked as a socialist remember this: I don’t believe government should take over, you know, the grocery store down the street or own the means of production. But I do believe that the middle class and the working families of this country who produce the wealth of this country deserve a decent standard of living and that their incomes should go up, not down.
When looking at the policies that Sanders is proposing — things like increasing minimum wage, Medicare for All and free college education — most analysts agree that these ideas fall in line with the successful policies of the Nordic countries where they call themselves social democracies.
Important: Let's not conflate "social democracy" with the leftist Democratic Socialists of America and its 90,000 members. That organization and its candidates — including Ilhan Omar, Cori Bush, Rashida Talib, Alaxandria Ocasio-Cortez and Jamaal Bowman — are not anything that I feel we should celebrate or aspire to. The DSA's attempt to normalize Hamas' October 2023 terrorist attack on Israel is abhorrent. To quote Rep. Ritchie Torres, a New York Democrat:
“Never mind the hundreds of Israeli civilians and children who have been murdered, wounded, abducted, and terrorized. Their lives mean nothing to the DSA. Nothing,” Congressman Ritchie Torres rightly wrote Saturday. “The NYC-DSA is revealing itself for what it truly is: an antisemitic stain on the soul of America’s largest city.”
(As an aside, if you're interested in reading an article from a journalist worthy of our respect and admiration, here is Bari Weiss writing about "Israel at War" in the Free Press.)
And again, for the record, I’m not a supporter of Bernie Sanders for a myriad of reasons, not the least of which is his stance on Israel. If you want to understand my point of view, let's look at what Alan Dershowitz said about Sanders’ support of Jeremy Corbyn in the UK:
There are only two reasons why Sanders would campaign for an antisemite: (1) he has allowed Corbyn’s socialism to blind him to his antisemitism; or (2) he doesn’t care about Corbyn’s antisemitism because it’s not important enough to him. This means that he is either a fool or a knave.
Back to the point I'm making: Social democracies are indeed capitalist systems with really strong social safety nets and have proven to be very successful at promoting fairness within their citizenry.
Have you ever wondered why Scandinavian countries are doing so well? According to many, they are successful because their politics and economy are based on a political ideology that does not reject capitalism while at the same time offers a form of socialism. It sounds contradictory, but social democracy is an ideology that does just that. Even more interesting — and maybe it’s cultural — but these countries also rank highest on a well-respected “anti-corruption” index.
You’ll note that the good old USA ranks 24th on this list.
In "I'm an American Living in Sweden. Here's why I Came to Embrace Higher Taxes," the author explains you get more for your money there.
And you get far more for your taxes than you do in the US. In Sweden, college is free and students get a housing stipend. A colleague's daughter, Kerstin, just completed a five-year dental program. Her family paid nothing for her education. The Swedish government gave her $340 a month to live on when she was in school and the right to borrow $700 more a month, which she did. After five years, she graduated with a debt of $37,153. In the US, dental students graduate with an average of $215,000 in debt from dental school alone.
Here's a counterpoint: An assessment of why America will never be able to conform itself to the Nordic economic model.
So, what can you do? It’s important to look at the actual policies that each candidate is proposing and not just the words that are thrown around. Let’s remember that most countries in the world have mixed economies and none of them fit neatly into one economic model. The word socialism has basically lost all practical meaning in political discourse. So it’s ultimately up to us to determine what it means based on who is using it and the policies that are supporting peace.
In "Capitalism & monetary policy" you will see that there are ways to modernize and adapt capitalism so that it leads to better outcomes for society as a whole.
Bottom line: It’s time to stop believing all the extreme rhetoric so we can begin to marginalize the extremes in both parties, and their ideologies and fear-mongering. We need to find a way to evolve both capitalism and the way we govern to find a way to ensure that we survive and thrive into the next century.
We must find a way to give the vast majority of Americans true representation and find the real common sense solutions that ultimately lie in the center!