Socialism Is Everywhere?

Not quite yet, but it is creeping

I’ve been harping on the centrality of social-democracy, including its identity with “democratic socialism,” in contrast to both feckless liberalism and left revolutionism. Now we find a spate of polling results and other commentary testifying to the popularity of socialist ideas, if not the label, as well as to the prospects of rising political personalities like Zohran Mamdani in New York and Omar Fateh in Minneapolis.

When Bernie Sanders broke the national political ice on the word “socialism” in 2016, I recall sappy messages to the effect that “Socialism is nice, even your public library is socialism.” NO! There is so much more.

I would like herein to delineate some of the differences between social-democracy and liberalism. Either of course would be welcome improvements over our current neo-fascist regime, but here I’m about trying to push beyond the liberalism frontier.

I’ve already elaborated on why democratic socialism is identical to social-democracy, in contradiction to a bevy of my comrades on the left. Political change is usually incremental. Big, radical revolutions are rare, and in advanced, wealthy industrial capitalist nations, completely without precedent. Even general strikes are few and far between, and when they succeed, it has only been on behalf of very elementary political rights, such as universal suffrage (and then, only for men) or in protest against state violence.

Since most progress is incremental, even in big increments such as the Social Security Act of 1935, then for all practical purposes “democratic socialism” and social-democracy are the same. Purported differences live in a purely ideological sphere, outside of real politics, castles in the air.

What I want to get into is how social-democracy goes beyond liberalism, or beyond the realm of just “more” liberalism. I stick to economic policy. There is no lack of commentary about constitutional reform that I leave to others, partly because I don’t see it happening.

For the principal U.S. social-democratic projects, I suggest the following breakdown:

1. Labor Power

2. Industrial Policy

3. Social Insurance

4. Social Ownership

5. Anti-Federalism

There are traces of all of these in the history of liberal social policy, but I want to highlight the categorical distinctions. Such distinctions can give rise to political themes, and to explicit campaigns.

Labor Power. The saintly John Kenneth Galbraith, whom I idolize, proposed or at least popularized the idea of “countervailing power” as a justification for elevating trade unionism. The implication was the merit of a “fair” political competition between Labor and Capital.

I don’t want fair! As the anarchists say, “No Gods, no masters!” I want to stack the deck, or really, at least unstack it from its contemporary, biased form. I suggest this is one distinction between social-democracy and liberalism. There is plenty of work on how to do this, not my bailiwick, but the objectives are clear: remove constraints on union organizing and agitation.

The Obama Administration disgraced itself in this context by its weak support for the public employee upsurge in Wisconsin. Both Obama and before him, Bill Clinton, sold out their own allies in Labor by their advocacy of so-called “free trade” deals. (I’ll elaborate on that below.) Joe Biden made a bit of splash by not merely calling for labor peace and labor-management kumbaya, but by being explicitly in favor of a pro-union contract. It says a lot about the Democratic Party that this was unusual.

Industrial Policy (‘IP’). Again, we got a taste of this under Biden, and a bit more, albeit of a perverse nature, under Trump. The idea is to restructure the economy — to shift what is produced — in the direction of higher value-added industries. That means higher profits and wages, and ultimately more tax revenue. Liberalism has been historically unfriendly to IP, in obeisance to the mythical free market.

How would this come about? The first problem is to determine which industries to expand, and to reckon with which ones would contract (and disemploy people, often at great personal financial harm). The tools for Biden were disproportionately tax credits. Relief for anyone negatively affected was usually non-existent. Biden broke this pattern temporarily with his extraordinary expansion of unemployment benefits.

For Trump it’s whatever idea comes to his howling wilderness of a mind, legalities aside. The objective here has been performance, to show that our big Chief Executive could deliver tangible factories and good jobs. Thus far, there has been more show than actual delivery. It’s mostly a con. If anything, the recent scandal of the Georgia raid and the mistreatment of Korean workers will have a negative impact on foreign direct investment in the U.S.

For social-democrats, the tools for IP would be a mix of direct grants, loan guarantees, and public enterprise. An important qualification is to ensure transition assistance for workers negatively affected in the short term.

An obvious candidate is production in the service of transition away from fossil fuels. That means solar, wind, maybe nuclear. I’m skeptical of the latter because I doubt our regulatory apparatus is up to enforcing prudent safety standards, but I’m not getting further into that thicket of weeds. For energy aficionados, there is also the matter of a robust, national electrical grid.

A negative example of IP has been the government’s historic support for automobile transportation and against social transit. A leading case is our pathetic inter-city passenger rail system, a.k.a. Amtrak. There are also urban intra-regional rail systems, support for which is arguably in the national interest. The climate benefits of social transit are obvious. Since our metro regions are the drivers of the national economy, so too is the health of the cities at their centers. We’re getting a teaspoon of this with Mamdani’s free buses, hopefully a prelude to more.

One branch of IP is trade policy. Here too we have seen a clear departure of liberalism from social-democratic openness to IP. Trade policy can restructure a domestic economy, not merely facilitate whatever corporations are wont to do. Liberalism tends to default to the latter. As above, an objective is to support higher value-added industries. This of course is what most other nations want to do as well, so negotiation is required to get a division of the spoils that is superior to whatever would happen absent such negotiations.

There is some language in Marx to suggest that he welcomed free trade as a means to accelerate economic progress, and then breakdown, and then the fabled Revolution. This idea would not serve us, since our social-democratic focus is on the incremental, devoted to progress in the here and now, not to more efficient markets. Trade deals can serve IP goals, and not incidentally, the interests of Labor. Liberalism has been on the wrong side of this struggle.

Another branch of IP is anti-trust. Again, the underlying motivation is on behalf of a mythical free market, as noted a delusion upheld by liberalism. It is true, there can be opportunities to enhance market efficiency by breaking up monopolies. What tends to be overlooked is the option of replacing monopolies with public enterprises. That’s the social-democratic difference.

Social Insurance. The chief basis for social welfare in the social-democratic nations of Europe has been their social insurance schemes. The idea is you tax people to finance benefits against likely, adverse events, what Franklin D. Roosevelt called “the great disturbing factors of life.” Obviously, injury and illness are top of the list, followed directly by retirement, disability, and death of the family breadwinner.

The taxes are not necessarily progressive. The idea is people should be willing to pay for what you are selling. If they aren’t something is wrong with you or with the product. One benefit of the approach is that it provides political robustness to a program. It’s harder to take something away if people have been paying for it and are owed a debt.

The liberal commentary in this vein has been unhelpful. In the case of Social Security, it has featured flat-out bogus predictions of insolvency, or crackpot remedies such as individual, privatized stock market accounts. Long ago, a wag suggested that, but for Monica Lewinsky, no pun intended, Bill Clinton might have wrecked Social Security with privatization.

In the case of health care, we have of course the Rube Goldberg ObamaCare system. I would not deny it was an improvement, in its time, but more straight-forward, simpler models are available and on view in other countries. Even here in the U.S., we still have the Veterans Administration, which employs its own doctors and provides health care directly.

At the root of the crippled health care reform was the Democratic establishment’s mantra, “we believe in the Market.” Of course, if they had a clue what a market really is, both in ideal terms and in the real world, their behavior would be very different.

The Left has been mixed up about social insurance, including cash benefits. In the matter of health insurance, it is reduced to the slogan of taxing the rich to pay for Medicare For All. First off, we need more dough for social-democracy than just taxing the rich. This has reached absurd lengths in the Democratic Party’s now-standard assurances, that it doesn’t want to further tax anyone earning less than $400K annually, or some other ridiculous number.

Second, Medicare For All is an empty box. What is it, exactly? It’s whatever you want it to be. Existing Medicare for all? I’m on it, and no thanks. Medicare covers 80 percent of catastrophic expenses. For most, including me, 20 percent of a catastrophic expense is still a catastrophe. And it’s hard to find doctors that accept Medicare patients. Some other Medicare? What exactly? The possibilities are endless, and you wouldn’t like some of them.

On cash assistance, we have the faux-left, dead end known as “Universal Basic Income” (‘UBI’) Not for nothing have some libertarians latched onto UBI. Set up all cash assistance to be like “welfare,” then come swinging in with the wrecking ball.

If you’re for democratic socialism, consider what democratic socialist governments actually do: it’s social insurance, not UBI.

Social ownership. Here we are out past Bernie-land. He says he is uninterested in “nationalizing the means of production.” Neither am I, to be honest. I don’t want the U.S. Congress trying to run Nvidia. As usual, there are many incremental way-stations. Once again, Mamdani gives us a taste with his public grocery stores.

Perhaps the two most pressing needs are in the fields of energy policy and housing. In both the private sector has been utterly inadequate. We rely too much on fossil fuels and housing costs have become prohibitive for aspiring homeowners and renters.

It’s perhaps a little easy to just say, well, the government can build this stuff. But it is also true. As I mentioned above, we will need much more revenue, a bullet most Democrats are not willing to bite.

Social-democrats can first sell the program; if you build it, they will pay. Liberals usually wring their hands and lead with, “Gee, how will we pay for it?” If what you build is more beneficial than foregone tax revenues, it is more difficult for the other side to take it down. If it is not, then somebody screwed up somewhere.

Anti-Federalism. Finally there is my hobby-horse, U.S. federalism. Decentralization in the U.S. is extreme by international standards and retards economic and social progress. Back in the 18th and early 19th Century, anti-federalism meant opposition to a central government, in favor of states. Now in my usage I mean the opposite.

Centralization begins with an expanded revenue system — more taxes, and not exclusively progressive ones. Such revenues could go to the states in part, while serving the purposes elaborated upon above.

Some public services are properly national in scope and require Federal design, funding, and management. One example already mentioned is inter-city rail. Another is the power grid. Transition off of fossil fuels must be a national policy, though implementation can and will likely be decentralized and incremental.

What’s bad about federalism? Income and wealth distribution as in most nations is unevenly distributed geographically. Insofar as we assign taxing and spending to local jurisdictions, we get inadequate public funding and gross inequality. A state tax is better than a blizzard of local taxes. For one thing, it raises more revenue, even if the rate is the same. A Federal tax is better than 50 state taxes.

It is possible to take the principle too far, since the population has already sorted itself out geographically, to some extent, based on preferences for public services, and it is possible to flout those preferences excessively. I would say presently we have the reverse problem — to much indulgence to decentralized finance.

So there you have it. Social-democracy or, if you like, “democratic socialism,” is categorically or conceptually distinct from “lots more liberalism.”

In a nutshell, the left can make political hay by proposing more labor power, industrial policy, social insurance, social ownership, and less federalism. These are well-regarded. Once the recognition sets in that democratic socialism need not be a pell-mell avalanche of new and unfamiliar policies, but a more gradual process, then we are off to the races. The popularity of Mamdani’s baby steps in these directions attests to their political viability, as do the polls that suggest that people are receptive to the content of democratic socialism, even if the label makes them apprehensive.