Is it socialism? Or just a service of the government?
One hundred years ago, in my hometown of Rapid City, South Dakota, the state opened a cement manufacturing plant. There was a need for cement for the roads and bridges that were being built back then, but there wasn’t enough private capital to build the plant. So the state did it. The South Dakota Cement Plant yielded millions of dollars of profit for the state for decades, until it was sold to a Mexican company. By then, Dacotah Cement had been used all over the country, including in the Hoover Dam and the interstate highway system.
I tell you this story now because this notion of a state going into business to do something that private industry was doing everywhere else is kind of surprising – right? It sounds a bit like – dare I say it? – socialism.
It’s a word you hear often these days from one Republican after another. All sorts of Democratic proposals that involve government funding are labeled “socialistic,” especially when it involves supporting people at the lower end of the socioeconomic spectrum. In fact, House Republicans staged a vote last month condemning socialism in America.
But it makes you wonder: Is Social Security socialist? Is Medicare, or Medicaid? You don’t hear socialism cited when the discussion turns to subsidies for farmers – which ballooned from $4 billion a year in 2017 to $20 billion in 2020, mainly to prop up the agricultural sector from the devastation it faced as a result of Donald Trump’s failed trade war.
All the fuss about socialism, though, misses a couple of points. First is simply definitional: Socialism is all about workers owning and managing the means of production for the common good, and there’s not much of that in the U.S., no matter what party is in power. What there is a lot of – and this is the second key point, I’d say – is government money pouring into some segments of the economy. We’ve accepted that since at least 1806, when Congress funded the first federal highway – The National Road, to link the Ohio River with Cumberland, in the state of Maryland. Governments own the roads now, though they’re built by private firms hired by governments. Is road-building socialist? Of course not: It’s an essential service provided by a partnership of government and private industry.
Government exists because people are willing to yield their individual authority for the common good. Government built ports in deep harbors and forts on the frontier; government raises armies for our defense and hires police for our protection. Government subsidizes hospitals and schools. That’s not socialism. It’s service.
So the question about what leads to socialism comes down to where you draw the line on government activity. And that may shift over time. You can use taxpayers’ funds to open a library, where books are lent, but not a bookstore, where books are sold. Government provides buses to get people around, but taxi service is private. We use tax dollars to subsidize construction of chip fabrication plants, but taxpayers don’t own and sell those chips once they’re made.
Sometimes the line is quite unclear. Take Alaska, which owns all the oil reserves and other natural resources underground and gives every Alaskan an annual stipend based on the state’s income from sales. The Alaska Permanent Fund has lately paid an average of about $1,600 a year to each citizen. I have heard of no groundswell suggesting that Alaska is slipping toward socialism by owning its natural resources and sharing that wealth with state residents.
Government often steps in when private investors won’t. That’s why it was the federal government that brought electricity to rural America, starting in the 1930s, and why government money was needed to spread radio nationwide about the same time, and to begin to explore space in the 1950s and 1960s.
That’s the work of government. It is not aided one whit by politicians who engage in inflammatory rhetoric more than in the tasks that citizens need them to accomplish.
Back when western South Dakota, my old home, needed cement, a state commission concluded that the best way to get it was for the state to build and operate a plant. Citizens had to first enact a state constitutional amendment to allow the government to own a business. It passed only after it was endorsed by Peter Norbeck, a newly-elected and popular Republican governor, who went on to serve three terms in the U.S. Senate.
Norbeck was no closet socialist. He was a pragmatist. His state needed cement, so he got the state to make cement. Oh, and South Dakota also operated stockyards, flour mills, grain elevators, a coal mine, and provided hail insurance.
Sometimes, you know, government’s gotta do what nobody else is gonna do.
Rex Smith, the co-host of The Media Project on WAMC, is the former editor of the Times Union of Albany and The Record in Troy. His weekly digital report, The Upstate American, is published by Substack.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.