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Michael Meeropol: What Would An American Socialism Look Like?

What is socialism?   I watched the Republican convention and though the word was spoken often, the only thing I learned about it was that it is very bad. According to the speakers at the Republican Convention, if the United States became a socialist country, we would become like Stalin’s Russia, Castro’s Cuba, or Maduro’s Venezuela.

On the Democratic side, Senator Bernie Sanders has stated that to him Democratic Socialism is pretty much what Franklin Roosevelt created during the New Deal (plus a few things like Canadian style health insurance and free college tuition.)   If pressed, he will refer to the Scandinavian Countries where there are lots of guarantees (child care, education, family allowances) for all citizens as societies to emulate.

Neither the Republican caricatures nor the Sanders gloss accurately describes what socialism is --- nor does either describe what a real American socialism would be like.

Let’s start with the basics.   From Wikipedia we get the following:

“Socialism is a political, social and economic philosophy encompassing a range of economic and social systems characterized by social ownership of the means of production and workers' self-management of enterprises.   … Social ownership can be public, collective, cooperative or of equity.   While no single definition encapsulates many types of socialism, social ownership is the one common element.”

Let’s start with the words, “social ownership.”   Most caricatures of socialism emphasize giant government bureaucracies telling every business what to produce.   (At the Republican Convention at least one person asserted that in the version of American Socialism that would exist if Joe Biden were elected, they [the nameless faceless “they” who would run things] would tell us how many Hamburgers we could eat!)   And it is certainly true that the government of the former Soviet Union through its planning system did set very stringent rules and goals for every industry – and these rules emanated from central decision-making bodies – not unlike the decision-making by Boards of Directors of giant American corporations.

But of course that is not how a DEMOCRATIC version of socialism --- a version true to America’s best traditions of representative democracy with all individuals having equal rights to political participation --- would be organized.   An American version of socialism would be that ownership of the “means of production” would be --- well, SOCIAL (as in all together).

The term “means of production” comes from the economist’s definition of (physical) capital --- “produced means of further production.”   Capital – one of the four factors of production to which all economics students are introduced – consists of the tools, machines and  buildings, that when combined with human effort (labor) and raw materials produce all the goods and services we need to survive and desire beyond mere survival.   Under capitalism, most capital is privately owned either by individuals or corporations (and remember, according to our Supreme Court, corporations are legally “persons.”)

Socialism as opposed to capitalism means that society AS A WHOLE owns that physical capital and directs the use of investment funds.

Socialists believe that private ownership of capital confers on those owners power over others.  Owners have the power to control the workers who use the capital equipment to produce the goods and services.   Socialists argue that those individuals and corporations should not have that power over other people.   Socialists believe, either the people through democratic institutions or the workers in each organization should have control over what is produced, how it is produced and how the fruits of that production should be distributed.

In our country, ownership of capital goods is distributed very unequally, and wealth measured in terms of financial capital --- stocks, bonds, real estate --- is concentrated in a sliver of the population.  This gives these people and the corporations they control ENORMOUS POWER, not just in the control of the behavior of their employees but because of the vast wealth accumulated these individuals (as business owners or corporate officers) they also have tremendous political influence.

What socialists want is for power to be TAKEN AWAY from that tiny sliver and be subject to democratic control.    Democracy is a good thing.  We elect Presidents, Governors, Senators, State Legislators, Mayors --- why not CEOs of large corporations?    Why shouldn’t the workers of a construction company or an accounting firm make decisions about the business democratically?

(It has never failed to surprise me that people --- often my students in a variety of economics classes --- who think that our system of democracy works very well in terms of electing people to make very important decisions for us --- including life and death decisions about utilizing our military in wars overseas --- decide that a system of similar accountability to the people on the part of businesses would be a terrible idea.)

Socialists believe that if businesses were democratically controlled, technology would be chosen that did not sacrifice the health and safety of workers nor the air and water quality of the surrounding community in order to increase revenue.   Wages and salaries would not be pushed as low as humanly possible just in order to make the owners into millionaires or billionaires.   (And wage and salaries wouldn’t be pushed so high as to bankrupt the business either!)

Health care providers would deliver health care rather than profits for insurance companies.   Pharmaceutical companies would sell drugs at cost without having to be bribed by patent law monopoly pricing.   Educational administrators would permit teachers and professors to provide the highest quality service and not pinch pennies either because of stingy legislatures or the revenue goals of for-profit institutions.

This last point requires elaboration.   In a mixed economy such as the United States --- where there are government provided goods and services like the police, fire, sanitation departments and public schools, the provision of these services depends on tax revenue.  Because our society requires energetic participation by owners of businesses --- large and small --- they have to be coddled regularly.  How many times have we been told that if a locality or a state taxes businesses too heavily they will just take their business elsewhere resulting in large scale unemployment?   Thus, the larger the corporation (therefore the larger the workforce dependent on it for jobs) the more clout it has in reducing taxation or getting government to cut back on regulations that reduce their revenue.

Result -- budgets are squeezed and therefore public services are squeezed.   In a truly democratic society where the people control decision-making, budgets would not be dependent on coddling giant corporations.   This would mean that if the people want to spend more money on infrastructure, education, public health, sustainable methods of generating energy, that will happen.   Millionaires and billionaires will not be able to hire lobbyists to thwart the will of the people because no matter how high one’s income is, accumulated wealth will be much more equally distributed because no income will be derived from mere ownership of assets.   High wages professions will probably still make significantly more than the average person (7 footers in the NBA, top cardiac surgeons, etc. will still be “rich.”) but those individuals will not be able to accumulate wealth in terms of factories and ownership rights to corporations.  All corporations will be owned in common.

Finally, our system of generating energy could be changed ---  replacing the burning of fossil fuels with sustainable sources of energy.   Businesses subject to democratic control would make stopping further global warming the highest priority.

Hold on you might say --- how is this going to work?   Who will determine what a “fair” wage is for workers?  -- what a fair price is for drugs?   How do you democratically control an economy?  

These are all legitimate questions ---- but asking them does not prove there are no good answers.   Democratic control of the economy could involve a local cooperative, a city-owned business (a local minor league baseball team for example), a county-owned business (all the recreation centers in the county), a state owned business (the Wisconsin Dairy industry), or a nationally controlled business (railroads, the postal service, the national defense production lines).   Nothing is set in stone --- the appropriate way to organize an American socialist economy will be a work in progress.

This is what happened once we embarked on our effort to create a (somewhat) Democratic Republic in 1787.  The American Democratic political system proved to be a work in progress

[I still think the best single book on this subject is Eric Foner’s THE STORY OF AMERICAN FREEDOM – even though it’s over 20 years old.]

The US political system was much less democratic in 1800 than in 1900, more democratic in 2000 than in 1900.  The same progress would occur if we had the courage to adopt socialism.  The basic rule would be simple --- the majority of the people engaged in or subject to economic activity control that activity.   Our current version of capitalism has proven a disaster.   (That is one of the unfortunate reasons why a significant percentage of the [white] working class were fooled into voting for Trump.  He promised to end “crony capitalism” and restore American manufacturing through nationalistic economic policies while promising to protect Medicare, Medicaid and Social Security.  In fact, he has made “crony capitalism” the centerpiece of his Administration --- with his family the “cronies in chief” --- and attempted  [with the proposed payroll tax cut] to defund Social Security while fighting to destroy the Medicaid expansion that was one of the great success stories of Obamacare!)

If our current version of capitalism (especially the rollback in environmental regulations that has been one of many “successes” of the Trump presidency) persists for even a handful of years, we will have condemned our grandchildren to a hellish future where the very survival of the human species (depending on how much trapped methane escapes from the earth as it warms and melts the permafrost) is in doubt.  Even if Methane doesn’t kill us all, flooding of coastal areas, unlivable temperatures in a swarth of the earth’s geography and widespread crop failures will kill billions.

Luckily, there is an alternative to capitalism --- All we have to do is have the courage to make the political decisions that implement the changes that are absolutely necessary to construct an American version of socialism.

If anyone is interested in exploring how that American version of socialism might actually work, I can recommend two theorists who have made it their life’s work to contemplate (and recommend)  how to craft an American version of socialism.   For an approach that starts with ownership of every workplace by the workers collectively, see the work of economist Richard D. Wolff.   He has just released a book called Understanding  Socialism.

Another outstanding writer is the Economist/Historian Gar Alperovitz.   He has been writing about the way to imagine an American socialism as a “pluralist commonwealth” for over 50 years.   He has created an institution called the Democracy Collaborative.   The various website connections are here.

Michael Meeropol is professor emeritus of Economics at Western New England University. He is the author with Howard and Paul Sherman of the recently published second edition of Principles of Macroeconomics: Activist vs. Austerity Policies

The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.

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