Part 3 – Progressive Socialism is All the Rage among Dems!

This is not a left-wing or right-wing critique. You can find it in the progressive pages of the Nation and in the conservative columns of the Wall Street Journal. Even casual observers got the picture when the hard rain began to fall in 2008 and 2009. Main Street lost jobs, homes and businesses in the Great Recession, while Wall Street extracted massive government bailouts to save their megabanks and factories from the stern discipline of the market. In the coming election, President Trump hopes to wrap the word “socialism” around the neck of the Democratic nominee. And polls show that many Democrats are fine with the word. Trump will have plenty of material to work with. The best response is to remind voters that big business enjoys the cushiest of safety nets and first dibs at the government trough. Its welfare checks round up to the nearest billion. If Democrats champion socialism against capitalism, they lose. But they might win as champions of a government for the little guy against government for the rich. The key battlegrounds are those hundreds of counties across America that supported the outsider Barack Obama and later backed the outsider Donald Trump. Those folks understand, and resent, the socialism of the well-connected.

 

To my surprise, Sen. Bernie Sanders found the right note in a recent speech (though he usually sounds like a tourist trying to special-order a Taco Bell chalupa at a restaurant in Madrid. Slow . . . er. Loud . . . er.). “Overnight,” Sanders said of the Great Recession, “Wall Street became big government socialists and begged for the largest federal bailout in American history — some $700 billion from the Treasury and trillions in support from the Federal Reserve. “But it’s not just Wall Street that loves socialism — when it works for them,” Sanders continued. “It is the norm across the entire corporate world. The truth is that corporate America receives hundreds of billions of dollars in federal support every single year, while these same people are trying to cut programs that benefit ordinary Americans.”

 

Personally, I would love to see a candidate in 2020 willing to make a spirited case for capitalism. I believe it is the most dynamic force for progress and freedom the world has ever seen. But with the left wing revitalized in the Democratic Party, and fat cats running amok among Republicans, my cadre of capitalists, ready to compete vigorously and creatively on level ground, is politically homeless. When an economy at full employment still runs a trillion-dollar deficit, no party involved can plausibly claim to be in favor of small or responsible government. Instead, the 2020 election will play out against a backdrop of runaway government spending. The challenge for Democrats is to hold Trump and the Republicans accountable for their rampant corporate socialism. The Americans, many of them young, who proudly tell pollsters they are socialists may not hold those views forever. For now, they’ve noticed that the government vault swings open whenever the well-connected come calling. They sense that the game is rigged, and their answer isn’t complicated. In fact, it boils down to two simple words.

Disingenuously, the GOP keeps pointing at Venezuela as an example of socialism.  Bad example!  That’s just a failed state wrought with corruption.  Perhaps a better example is China.  Not that we’d want to copy their socialist system, but we can look to what’s working well in their economy as an object lesson on what needs fixing in our own economy, plus help us identify some of our mistakes.  One aspect is China being capable of long-term thinking, compared to the short-term mindset here where our political leadership only react to urgent calamities.  China also works with their corporations instead of being controlled by them.  Here is the final part pulled from theguardian.com/commentisfree/2019/jun/23/china-america-economic-system-xi-jinping-trump:

China’s core planners and state-owned companies will do whatever is necessary both to improve the wellbeing of the Chinese people and become the world’s largest and most powerful economy. Since 1978, the Chinese economy has grown by an average of more than 9% per year. Growth has slowed recently, and American tariffs could bring it down to 6% or 7%, but that’s still faster than almost any other economy in the world, including the US. The American system relies on taxes, subsidies and regulations to coax corporations to act in the interest of the American public. But these levers have proven weak relative to the overriding corporate goal of maximizing shareholder returns.

 

Last week, for example, Walmart, American’s largest employer, announced it would lay off 570 employees despite taking home more than $2bn courtesy of Trump and the Republican corporate tax cuts. Last year, the company closed dozens of Sam’s Club stores, leaving thousands of Americans out of work. At the same time, Walmart has plowed more than $20bn into buying back shares of its own stock, which boosts the pay of Walmart executives and enriches wealthy investors but does nothing for the economy. It should be noted that Walmart is a global company, not adverse to bribing foreign officials to get its way. On Thursday it agreed to pay $282m to settle federal allegations of overseas corruption, including channeling more than $500,000 to an intermediary in Brazil known as a “sorceress” for her ability to make construction permit problems disappear.

 

Across the American economy, the Trump tax cut did squat for jobs and wages but did nicely for corporate executives and big investors. Instead of reinvesting the savings into their businesses, the International Monetary Fund reports that companies used it to buy back stock. But wait. America is a democracy and China is a dictatorship, right? True, but most Americans have little or no influence on public policy – which is why the Trump tax cut did so little for them. That’s the conclusion of professors Martin Gilens of Princeton and Benjamin Page of Northwestern, who analyzed 1,799 policy issues before Congress and found that “the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy”. Instead, American lawmakers respond to the demands of wealthy individuals (typically corporate executives and Wall Street moguls) and of big corporations, those with the most lobbying prowess and deepest pockets to bankroll campaigns.

 

Don’t blame American corporations. They’re in business to make profits and maximize their share prices, not to serve America. But because of their dominance in American politics and their commitment to share prices instead of the wellbeing of Americans, it’s folly to count on them to create good American jobs or improve American competitiveness. I’m not suggesting we emulate the Chinese economic system. I am suggesting that we not be smug about the American economic system. Instead of trying to get China to change, we should lessen the dominance of big American corporations over American policy. China isn’t the reason half of America hasn’t had a raise in four decades. The simple fact is Americans cannot thrive within a system run largely by big American corporations, organized to boost their share prices but not boost Americans.

There are a few takeaways from this.

 

First, “socialism” is a red flag for Republicans and Republican-leaners to a degree that “progressive” (which 40 percent of Republicans view favorably) is not. There’s not even all that much payoff among Democrats, since 33 percent of Democrats have a negative view of that term, while only 12 percent have a very positive view of socialism. If you want a Democratic nominee to have the broadest ideological appeal, the most unifying descriptor among Democrats is “progressive” (88 percent), not socialism (65 percent).

 

Second, it’s fair to say that “socialism” doesn’t have a uniform meaning. The number of people who view both socialism and capitalism positively (25 percent) suggests that they might view “socialist” as akin to “capitalism with social welfare components” (e.g. Medicare, Medicaid, Social Security). Meanwhile, the largest chunk of the electorate (39 percent) rejects socialism — perhaps imagining this term applies to Scandinavia, or worse, Cuba — and favors capitalism. These pro-capitalist/anti-socialist Americans likely don’t see Medicare, Medicaid and Social Security as antithetical to capitalism.

 

Third, arguing about “socialism,” which Republicans have turned into a slur and Democrats have mixed views about, misses the point. The fundamental issue is the role of government in the lives of Americans. Even the Republican Party is in favor of big government these days, as evidenced by the growth of the federal budget, especially entitlement spending, and the GOP’s willingness to subsidize carbon production (e.g. coal mining). The GOP has also learned the hard way that Americans do not take kindly to efforts to take benefits away (e.g. the Affordable Care Act) in the name of “personal freedom.”

 

Rather than debate the term “socialism” or the size of government, we should focus on what we want government to do.

For almost half a century, something vital has been missing from leftwing politics in western countries. Since the 70s, the left has changed how many people think about prejudice, personal identity and freedom. It has exposed capitalism’s cruelties. It has sometimes won elections, and sometimes governed effectively afterwards. But it has not been able to change fundamentally how wealth and work function in society – or even provide a compelling vision of how that might be done. The left, in short, has not had an economic policy. Instead, the right has had one. Privatisation, deregulation, lower taxes for business and the rich, more power for employers and shareholders, less power for workers – these interlocking policies have intensified capitalism, and made it ever more ubiquitous. There have been immense efforts to make capitalism appear inevitable; to depict any alternative as impossible. In this increasingly hostile environment, the left’s economic approach has been reactive – resisting these huge changes, often in vain – and often backward-looking, even nostalgic. For many decades, the same two critical analysts of capitalism, Karl Marx and John Maynard Keynes, have continued to dominate the left’s economic imagination. Marx died in 1883, Keynes in 1946. The last time their ideas had a significant influence on western governments or voters was 40 years ago, during the turbulent final days of postwar social democracy. Ever since, rightwingers and centrists have caricatured anyone arguing that capitalism should be reined in – let alone reshaped or replaced – as wanting to take the world “back to the 70s”. Altering our economic system has been presented as a fantasy – no more practical than time travel.

 

And yet, in recent years, that system has started to fail. Rather than sustainable and widely shared prosperity, it has produced wage stagnation, ever more workers in poverty, ever more inequality, banking crises, the convulsions of populism and the impending climate catastrophe. Even senior rightwing politicians sometimes concede the seriousness of the crisis. At last year’s Conservative conference, the chancellor, Philip Hammond, admitted that “a gap has opened up” in the west “between the theory of how a market economy delivers … and the reality”. He went on: “Too many people feel that … the system is not working for them.” There is a dawning recognition that a new kind of economy is needed: fairer, more inclusive, less exploitative, less destructive of society and the planet. “We’re in a time when people are much more open to radical economic ideas,” says Michael Jacobs, a former prime ministerial adviser to Gordon Brown. “The voters have revolted against neoliberalism. The international economic institutions – the World Bank, the International Monetary Fund – are recognising its downsides.” Meanwhile, the 2008 financial crisis and the previously unthinkable government interventions that halted it have discredited two central neoliberal orthodoxies: that capitalism cannot fail, and that governments cannot step in to change how the economy works. A huge political space has opened up. In Britain and the US, in many ways the most capitalist western countries, and the ones where its problems are starkest, an emerging network of thinkers, activists and politicians has begun to seize this opportunity. They are trying to construct a new kind of leftwing economics: one that addresses the flaws of the 21st-century economy, but which also explains, in practical ways, how future leftwing governments could create a better one.

 

This “democratic economy” is not some idealistic fantasy: bits of it are already being constructed in Britain and the US. And without this transformation, the new economists argue, the increasing inequality of economic power will soon make democracy itself unworkable. “If we want to live in democratic societies, then we need to … allow communities to shape their local economies,” write Joe Guinan and Martin O’Neill, both prolific advocates of the new economics, in a recent article for the Institute for Public Policy Research (IPPR) – a thinktank previously associated with New Labour. “It is no longer good enough to see the economy as some kind of separate technocratic domain in which the central values of a democratic society somehow do not apply.” Moreover, Guinan and O’Neill argue, making the economy more democratic will actually help to revitalise democracy: voters are less likely to feel angry, or apathetic, if they are included in economic decisions that fundamentally affect their lives. The new economists’ enormously ambitious project means transforming the relationship between capitalism and the state; between workers and employers; between the local and global economy; and between those with economic assets and those without. “Economic power and control must rest more equally,” declared a report last year by the New Economics Foundation (NEF), a radical London thinktank that has acted as an incubator for many of the new movement’s members and ideas. In the past, left-of-centre British governments have attempted to reshape the economy by taxation – usually focused on income rather than other forms of economic power – and by nationalisation, which usually meant replacing a private-sector management elite with a state-appointed one. Instead of such limited, patchily successful interventions, the new economists want to see much more systemic and permanent change. They want – at the least – to change how capitalism works. But, crucially, they want this change to be only partially initiated and overseen by the state, not controlled by it. They envisage a transformation that happens almost organically, driven by employees and consumers – a sort of non-violent revolution in slow motion. The result, the new economists claim, will be an economy that suits society, rather than – as we have at present – a society subordinated to the economy. The new economics, suggests Berry, isn’t really economics at all. It’s “a new view of the world”.