Should America be socialist? Is America already socialist?
To answer either of those questions, we must first define socialism. What is it? What countries are socialist? For example, is Denmark socialist? If so, is it the same socialism as Venezuela? And what about “socialist” countries like Germany under the Nazis, “National Socialist German Workers’ Party” and the former USSR, “Union of Soviet Socialist Republics”?
With the definitions in hand, we can have a useful discussion.
That is the subject of today’s 10-minute episode.
Let’s look at the promised definitions:
- Democratic Socialism: I believe that most people who use this term are not talking about the traditional definition of socialism where the government owns the means of production. What they mean is aggressive income and wealth redistribution vehicles like free healthcare, free college and free daycare–perhaps just for starters. They are not talking about the government owning and/or controlling entities like Ford and Facebook. Not yet, anyway. However, Senator Sanders, Representative Ocasio-Cortez and others are in favor of government ownership in many cases. Healthcare is an obvious example.
- Traditional Socialism. See above, democratic socialism, with the addition of the government owning entities like Ford, Facebook and most everything else of size. You can keep your ice cream store if you have one. See Venezuela, Cuba and others as examples.
- Communism: Traditional socialism with the addition of prohibiting any private property.
- Capitalism: A system wherein people, individuals or groups, including corporations, own the means of production and engage in voluntary exchanges of money for goods and services.
- Profit: Selling things, taking in income, for more than it costs to make them, drives everything; capitalism, democratic socialism, traditional socialism, communism, no matter what the system is. Here we are not talking about taxes or what you do with taxes; we are talking about how you make the money and wealth that is taxed in the first place. You have to create wealth before you can redistribute it. That is done through generating profits. The gozindas have to exceed the gozoutas or nothing works in any system.
I also promised thoughts about specific countries:
- Denmark. Bernie Sanders often uses Denmark as an example of democratic socialism. Denmark disagrees; their model is capitalism with heavy income redistribution. After seeing his country held up as an example in the 2016 US Democratic presidential debate, Danish Prime Minister Lars Løkke Rasmussen used an address at Harvard to explain the Nordic model to a US audience suddenly very interested in Denmark. “I know that some people in the US associate the Nordic model with some sort of socialism. Therefore I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.” Rasmussen said.
- Cuba. Socialist/Communist dictatorship. Complete mess. The Castros have used their dictatorial powers in a way that many people are still driving the cars that were on the island after the 1959 revolution.
- Venezuela. See above, but far worse. And who knew that was even possible?
- WWII Germany. The Nazis, despite the name National Socialist German Workers’ Party were not socialists; they were an evil cult, preaching the superiority of certain genetic types, which gave them the right–the obligation–to eliminate other types and groups of humans.
- USSR. The former Soviet Union. Communist by self-identification. Here are a couple vignettes that sum up the economic disaster that communism was in the USSR. When a worker was interviewed about this job, his summary was, “We pretend to work, and they pretend to pay us”. Here is another one; a shopper had stood in line for over an hour in the local government grocery store before he finally made it to the counter to make his purchase for that night’s dinner. “I’m sorry, sir, but this is the counter where we have no fish. Over there is the counter where we have no meat.”
Let’s do a mutual goal check. I am assuming that we are all looking for an economic system that simultaneously rewards talent and hard work, while taking care of those who truly need it. Do you agree? If not, I and others would benefit from your thoughts and comments.
Here are three key observations:
- Capitalism is the greatest wealth-producing engine the world has ever seen. Some may doubt its fairness, but no one doubts its ability to create wealth on a massive scale.
- All societies redistribute wealth. All of them. If all a particular society did was to tax enough to provide roads, some would pay more for those roads than others. Most people are likely to use the roads disproportionately to their tax contribution. Some more, some less; that’s an example of redistribution. The question is not whether to redistribute wealth, but what is the proper level of redistribution.
- Leading communist countries, including Russia, China and Vietnam, have all finally allowed free market practices to exist legally. Out of necessity. Communism has simply not worked anywhere. And never will. Those countries need free market profits to support their economies and to keep their one-party leaders in power.
Which economic method or principle, either type of socialism, communism or capitalism, is the best approach to making and selling products and services for more than they cost? Answer: Capitalism. Absolutely no question. Remember, democratic socialism is successful capitalism, capitalism with profits, with heavy income redistribution. Without profit there is nothing to tax, and nothing to redistribute.
Capitalism is amoral, not immoral, mind you–amoral. It needs a moral compass. Democracy needs a moral compass. Any system, group or person needs a moral compass. If you don’t have a solid compass that you follow, then nothing else matters. Nothing. You will simply be a cork on the oceans of life, following the changing paths of the tides, currents and waves.
Now to answer the two questions at the beginning of the podcast.
- “Should America be socialist?” No. Quoting Cory Booker I’ll say it again in Spanish: No. Government should be tasked with doing only what it does uniquely best; quite the opposite of the socialist model. Defense and some infrastructure meet that test. Perhaps other tasks as well, but we must apply the “uniquely well” test rigorously. And services like health care and college are not human rights. Same with products like housing and food. While none of those things are rights, people do deserve to have reasonable access to all of them.
- “Is America already socialist?” Our pre K-12 schools are mostly socialist. Fix the deteriorating public schools through competition via liberal access to equally funded traditional public schools, charter schools and private schools via vouchers, and I can live with that. Under the flag of charity–claiming to take care of our fellow man, our country, America, is leaning more and more toward socialism. I argue that capitalism with a moral compass, does far more to take care of our neighbors, the people in the US, the people in the world, than any form of socialism. Alway has, always will.
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Will Luden, coming to you from 7,200’ in Colorado Springs.