Fear of Socialism

            Many Trump supporters, while admitting that Trump is crude and a racists, confess they nevertheless intend to vote for him.  Their reasoning is that Biden is under the control of Bernie Sander and Alexandria Ocasio-Cortez who will have him turn America into a socialist nation that will eventually evolve into a communist state.  While all of these Trump supporters have undoubtedly heard this claptrap repeated incessantly on Fox News and right-wing social media, I suspect that some of them simply intend to vote for Trump because of his racist beliefs and just find the “socialism” rationale more socially acceptable. I write this article for those Trump supporters who truly fear that Biden will transform America into a socialist country and for my friends who have encountered this specious argument.

            Let me begin by reassuring you that I am not a proponent of socialism.  Some of my thoughts about socialism can be found in my earlier articles entitled “The Role of Government”, “The Myth of Republican Economic Managerial Superiority” and “America’s Descent from Greatness.”  Despite my reservations about socialism, like most Americans, I am in favor of social welfare programs like Medicare and Social Security which are a hallmark of all socialist governments.  In this connection, it’s worth noting that there are great variations among the roughly 50 nations that identify themselves as “socialist.”  Roughly half of those countries limit their government’s ownership to a relatively small segment of their economies.  Even those countries that embrace a Marxist-Leninist form of socialism generally permit private ownership of small businesses. Despite the widespread acceptance of socialism, in this country it has been thoroughly demonized with the result that few Americans are willing to even consider its merits.  For that reason, it is helpful to understand exactly what “socialism” refers to. 

            You may be surprised to learn that socialism is not even a form of government and does not necessarily describe a country’s governmental structure.  Rather, it is an economic system in which the means of production (i.e., factories and businesses) are owned and controlled by the government and operated for the benefit of the governed.  Socialism, in its purest form, is rarely found today. The early Jewish settlements in Palestine known as “Kibbutzim” or “kibbutzes” are one of the few examples of a pure socialistic society. In those communities, each resident worked for the benefit of the community which, in turn, provided them with housing, food, clothing and child care and education as needed.  Today, approximately half of the nations that are classified as “socialist countries” (including virtually every western European country) have relatively few state-owned industries.  Instead, their governments simply run their schools and healthcare and welfare systems, providing their services to all residents without charge. 

            To be sure, there are many socialist countries with autocratic governments like China, Cuba, Vietnam, Laos and Venezuela, but there are also an equal number of socialist countries with democratically elected governments.  They are generally referred to as “democratic socialists” nations. In our country, the word “socialism” conjures up thoughts of police states in which the government not only controls the nation’s means of production, but also exerts power over a wide spectrum of individual actions and personal choices.  This was certainly true of the Union of Soviet SOCIALIST Republics which was our principal adversary during the “Cold War” years.  The Soviet Union murdered millions of its own people and placed millions more into Siberian labor camps.  It also denied its citizens freedom of speech and freedom of the press. This, in large measure, explains the aversion of most Americans to the concept of a “socialist” society.

            There is also a misconception that once a nation embarks on the path toward socialism, it will not be able stop itself from eventually becoming an autocracy. That concern, however, lacks historical support.  Much to the contrary, there have been over forty nations that have tried socialism and have given it up. These nations include such prominent countries as Israel, India, the U.K and Russia. Their departure from socialism followed their realization that government ownership of industry tends to breed inefficiency. Therefore, those Trump supporters who are truly fearful that our nation might evolve into an authoritarian state, should be far less concerned about the threat of socialism than about about a President who believes that he is not accountable to the U.S. Congress and has politicized our Department of Justice and our courts.

             Another misconception is that government regulation of industry is yet another path to socialism. This piece of disinformation has been disseminated to the public by large corporations that would prefer to remain unregulated.  Rather than being a path to socialism, government regulation of industry actually serves as a safeguard against a movement away from democracy.  That’s because unregulated industries tend to act in their own best interest and not always in ways that are beneficial to their workers and the public at large.  Thus, if corporations are allowed to go unchecked, the level of public distress will grow to the point of inciting a revolution as the only means of making businesses act in the interest of the public.

            Setting aside these misconceptions, socialism is nevertheless largely rejected in this country for two principal reasons: it tends to impair personal initiative and creativity; and when it is applied to a large segment of a nation’s economy, it has a distinct tendency toward an authoritarian form of government. This does not mean that a socialist system will always yield inferior economic results. As discussed below, the greater control afforded by a socialist economy can sometimes prove to be more effective, especially with respect to major economic undertakings, like creating or upgrading a nation’s electrical grid or telecommunications system.

            Our nation’s free-market system was clearly the primary reason why the United States won the “Cold War.”  The Soviet Union owned its country’s principal means of production and worker compensation was determined by government officials largely on the basis of job classification, rather than on individual performance. Thus, their workers had little incentive to work harder or to explore ways to improve the products and operations of their employers.  A common saying about the Soviet system was that “the government pretended to compensate the worker and the workers pretended to work.” In this country, individual hard work and initiative are generally rewarded; and if workers think that they know a better way of doing things, they can start competing businesses. This tends to accelerate innovation with the result that the products produced by the U.S. have been generally superior to those produced in other countries and far superior to those produced in the Soviet Union. In fact, the U.S. remains the world leader in innovation and the very possibility of being able to create new processes and products has enabled the U.S. to attract would-be entrepreneurs from all over the world. 

            The U.S. also has the highest worker productivity of all other nations even though four western European countries (Ireland, Norway, Germany and Belgium --three of which are democratic socialist states) have higher per hour worker productivity and workers in Portugal, Mexico and several eastern European nations (two of which are democratic socialist states), work more hours per week than U.S. workers. Nevertheless, its high worker productivity, combined with the nation’s relatively large population, has enabled the U.S. to produce the world’s largest economy, an economy that is roughly 50% larger than that of China which now has the world’s second largest economy.

            Because the government controls the principal means of production in socialist countries, those governments wield tremendous power over a sizable majority of their nation’s population.  Moreover, the greater the percentage of the nation’s productive capacity controlled by the government, the greater the government’s control over its people.  As Lord Acton observed, “Power tends to corrupt and absolute power corrupts absolutely.”  Thus, those governments have both the will and the means to perpetuate themselves in power, often with brutal results. While this is what has happened in the world’s Marxist-Leninist states (such as China, Cuba, Laos and Venezuela), it does not appear to be a problem in roughly 25 democratic socialist states in which the government’s ownership is generally limited to those industries that service the personal needs of the population such as providing healthcare, childcare and educational services.

            Still, government control of industry can prove beneficial in some cases.  This is evident in China’s current efforts to lift its economy into the 21st century.  It has developed long-range plans to expand its infrastructure so as to facilitate economic expansion and has invested in scientific research which will enable it to become a leader in new technologies.  The power possessed by its central government assures that all aspects of the nation’s economy will work together to bring these plans to reality.  The spectacular display produced by China in 2008 when it staged the summer Olympic games is but a small example of what can be done in a government controlled economy.  Even more impressive is China’s spectacular National Trunk Highway System which stretches across the mountains and gorges for nearly 100,000 miles.  In many cases, 100-mile segments of this highway system have been constructed in a matter of mere weeks.

            The downside of a socialist government’s ability to press ahead quickly with major undertakings is that decisions made by a central governing body can result in misallocations of resources. For example, China’s government has constructed hundreds of high-rise housing complexes, only to discover that a large number of them remain without occupants.  This type of problem occurs far less frequently and on a far smaller scale in the U.S. where building decisions are made on a decentralized basis and in response to market needs.

            In the United States, despite a general recognition for the need to improve the nation’s infrastructure, there have been few major infrastructure projects undertaken in recent years. The last such project was the Interstate Highway System created in the 1950s when Eisenhower was president. Also, while the nation’s electrical grid has been repaired and extended, it has not been upgraded; and national investments in new technologies have dwindled since the space program was curtailed.  This has largely been a product of the Republican efforts, started in the 1980s, to cut taxes and reduce the size of our nation’s government (see, “Partisan Politics”); and has resulted in Congressional gridlock whenever infrastructure improvement plans have been raised.  Those same forces have also worked to impede investment in the nation’s social structure which is the focus of the programs now being championed by Senator Sanders and Congresswoman Ocasio-Cortez.

             Although both Senator Sanders and Congresswoman Ocasio-Cortez are very persuasive individuals with substantial personal followings, they are hardly modern-day Rasputin’s, capable of manipulating Vice President Biden whom the Republicans have tried to portray a doddering old man on the borderline of senility.  That notion was largely dispelled in the recent Presidential debate when the former Vice President displayed no signs of wilting in the face of personal attacks and abusive behavior on the part of an out-of-control President Trump.  In that debate, Biden made clear that he did not support either Medicare-for-all of the Green New Deal, but rather has his own plans for addressing healthcare and environmental issues.  In short, he would be guided both by what is needed and what is politically feasible.

            It’s not that the U.S. is devoid of social programs.  There are literally scores of such programs including Social Security, Medicare, Medicaid, the Affordable Care Act, and a plethora of housing, education, childcare and nutritional programs.  The problem is that we have a patchwork of non-comprehensive programs that leave many of the nation’s citizens in need of life’s necessities and unable to maximize their productivity.  

            While socialism can clearly have a deleterious effect on industrial productivity, there is good reason to believe that would not be the case when government ownership is limited to providing social welfare programs.  In fact, there is good reason to believe that a more robust system of such programs would actually enhance national productivity. Bernie Sanders has been outspoken in his belief that the type of health and welfare benefits provided by the Nordic countries (Denmark, Sweden, Norway, Finland and Iceland) should be provided by the U.S. government to all of its citizens.  This has prompted Republicans to denounce him as wanting to turn the U.S. into a socialist country.  That accusation is not wholly erroneous as the Nordic states are frequently categorized as democratic socialist countries.

            Rather than simply plaster a label on these countries, it is useful to examine what they are and how they operate. First, they are all democracies with democratically elected legislatures and government officials.  Each provides their citizens with an elaborate social safety net including free education, universal healthcare, unemployment insurance (at high percentages of their wages) and public pension plans. Outside of these areas, they each have free-market economies, with relatively little government regulation or trade restrictions. Each has high tax rates (which equate to between 40% and 50% of earned income) and their respective government spending represents approximately half of their nation’s GDP. Virtually all segments of their economies are heavily unionized, with 65% to 90% of their workers being members of a trade union. This, in turn, provides a relatively high level of job security. Poverty rates in the Nordic countries run between 6% to 9%, as compared to 14.5% in the U.S.  In addition, income inequality is relatively low, with those citizens in the top 1% earning 7% to 13% of total earnings, as opposed to the highest 1% of Americans income recipients garnering 20.2% of total U.S. income. 

            The Nordic states have consistently produced results superior to those of other countries.  Four of the five Nordic countries have median household incomes greater than that achieved in the U.S.; and all five have median per capita incomes higher than that of the U.S.  On the “Quality of Life index” (which utilizes such metrics as health and well-being, safety and security, personal happiness, leisure options, and telecommunication connectivity), they rank between 1st and 6th, with the U.S. coming in 7th.  Their education system rankings rank between 3rd and 15th, with the U.S. placing 14th among all nations.  Their healthcare systems have world rankings between 11th and 34th, with the U.S. coming in 37th.  On an overall “Happiness” scale (which takes into consideration personal perceptions of individual freedom and security and governmental corruption) they rank 1st through 4th with Sweden coming in 7th, as compared to the U.S. which ranked 19th.  These are impressive statistics and should not be obscured simply because they emanate from countries demeaned as being “socialist.”

            While there is ample proof that comprehensive health and welfare systems add to a nation’s productivity, putting those systems into place is not dissimilar to building a new building on a site that is occupied by an existing structure.  Not only must the existing structure be demolished, but there will be objections of others who might oppose the new structure for a host of environmental and zoning reasons.  That was essentially the problem faced by Hillary Clinton in the early 1990s when she tried unsuccessfully to develop a new government-administered healthcare system.  Her plan was opposed not only by health insurance companies and existing medical institutions, but also by those who believe in small government.  It takes an extraordinary amount of political will to make such changes.  Without that level of public will, a nation must opt for a compromise system, like Obamacare, which achieves much of the desired objective while utilizing the existing social structure for assuring comprehensive healthcare.  One bright side of the coronavirus pandemic is that it may wreak enough havoc to create the requisite amount of political will to embrace more comprehensive health and welfare systems in this country.