Hey kids: Don't be a sucker for socialism

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Here’s a fun game to play with a right-leaning American: say the word “socialism” and count the number of seconds it takes for them to scream “VENEZUELA” in response. It is unclear how many conservative Americans could identify Venezuela on a map but, boy, they all seem keen to inform you that the beleaguered country is a shining example of why socialism will never work, certainly not in the US.

For a recent example of how Republicans go completely Caracas at the mere mention of the S-word, please see Meghan McCain, the daughter of the 2008 presidential candidate John McCain. Last week, Meghan McCain had a meltdown on the daytime television chatshow The View when the subject of Alexandria Ocasio-Cortez, the 28-year-old Democratic Socialist who recently unseated a 10-term New York congressman, came up.

Joy Behar, a co-host on The View, mentioned that Ocasio-Cortez’s platform, which includes outlandish proposals such as paid sick leave and healthcare for everyone, sounded like a pretty good idea. At that point McCain, another co-host (a position she clearly got for her oratorical abilities and not her famous last name) yelled over everyone that this sort of attitude makes her “head explode”. It took McCain, whose parents are worth more than $200m, a fortune that is largely inherited, 20 seconds to bring up Venezuela as an example of why socialism is bad and capitalism is good. To bolster her argument, she quoted Margaret Thatcher, saying: “At a certain point, you run out of spending other people’s money.” McCain, who has benefited from unearned wealth all her life, concluded her rant by stating: “It’s petrifying to me that [socialism] is being normalised! Some of us do not want socialism normalised in this country.”

McCain is right. A lot of people, people so rich they forget how many houses they own (as John McCain once did), don’t want the idea that wealth should be distributed to the many, not the few, to become normalised in the hyper-individualistic, increasingly unequal US. Unfortunately for them, however, there has been a seismic shift in attitudes towards socialism in America; a country that, for a long time, has stood apart from other industrialised democracies in not developing a notable socialist movement. Socialism is no longer a dirty word in the US, certainly not among millennials, anyway, who face a far grimmer economic future than previous generations. It isn’t surprising that a number of recent polls show millennials are increasingly drawn to socialism and wary of capitalism.

The popularisation of what has been termed by some as ‘millennial socialism’ in the US arguably began with the Occupy Wall Street movement in 2011. Bernie Sanders’ presidential campaign gave it further momentum, and Ocasio-Cortez’s recent win added more fuel to the fire. You can see this trajectory reflected in the membership of the Democratic Socialists of America (DSA). Founded in 1982, it had about 6,000 members for most of its history. Shortly after the 2016 election, the organisation saw a boom in membership, reaching 11,000 paying members in December 2016. Since Trump took power, interest in the DSA has grown exponentially. A spokesman said it hit 47,000 members last week, and has “seen the fastest growth in our history following the win of Ocasio-Cortez”.

Perhaps the most significant thing about the rise of millennial socialism in the US is that it is forcing conservatives to articulate what exactly is so bad about a more equal system – often with results that are beyond parody. A writer for the ultra-conservative website the Daily Caller, for example, recently attended an Ocasio-Cortez rally and reported, completely straight-faced: “I saw something truly terrifying. I saw just how easy it would be … as a parent, to accept the idea that my children deserve healthcare and education.” Kids deserving healthcare, imagine that! It’s a slippery slope, it really is. You start with accessible healthcare and pretty soon you end up just like Venezuela.

The official rate of unemployment in America has plunged to a remarkably low 3.8%. The Federal Reserve forecasts that the unemployment rate will reach 3.5% by the end of the year.

But the official rate hides more troubling realities: legions of college grads overqualified for their jobs, a growing number of contract workers with no job security, and an army of part-time workers desperate for full-time jobs. Almost 80% of Americans say they live from paycheck to paycheck, many not knowing how big their next one will be.

Blanketing all of this are stagnant wages and vanishing job benefits. The typical American worker now earns around $44,500 a year, not much more than what the typical worker earned in 40 years ago, adjusted for inflation. Although the US economy continues to grow, most of the gains have been going to a relatively few top executives of large companies, financiers, and inventors and owners of digital devices.

America doesn’t have a jobs crisis. It has a good jobs crisis.

When Republicans delivered their $1.5tn tax cut last December they predicted a big wage boost for American workers. Forget it. Wages actually dropped in the second quarter of this year.

Not even the current low rate of unemployment is forcing employers to raise wages. Contrast this with the late 1990s, the last time unemployment dipped close to where it is today, when the portion of national income going into wages was 3% points higher than it is today.

What’s going on? Simply put, the vast majority of American workers have lost just about all their bargaining power. The erosion of that bargaining power is one of the biggest economic stories of the past four decades, yet it’s less about supply and demand than about institutions and politics.

Two fundamental forces have changed the structure of the US economy, directly altering the balance of power between business and labor. The first is the increasing difficulty for workers of joining together in trade unions. The second is the growing ease by which corporations can join together in oligopolies or to form monopolies.

By the mid-1950s more than a third of all private-sector workers in the United States were unionized. In subsequent decades public employees became organized, too. Employers were required by law not just to permit unions but to negotiate in good faith with them. This gave workers significant power to demand better wages, hours, benefits, and working conditions. (Agreements in unionized industries set the benchmarks for the non-unionized).

Yet starting in the 1980s and with increasing ferocity since then, private-sector employers have fought against unions. Ronald Reagan’s decision to fire the nation’s air-traffic controllers, who went on an illegal strike, signaled to private-sector employers that fighting unions was legitimate. A wave of hostile takeovers pushed employers to do whatever was necessary to maximize shareholder returns. Together, they ushered in an era of union-busting.

Employers have been firing workers who attempt to organize, threatening to relocate to more “business friendly” states if companies unionize, mounting campaigns against union votes, and summoning replacement workers when unionized workers strike. Employer groups have lobbied states to enact more so-called “right-to-work” laws that bar unions from requiring dues from workers they represent. A recent supreme court opinion delivered by the court’s five Republican appointees has extended the principle of “right-to-work” to public employees.

Today, fewer than 7% of private-sector workers are unionized, and public-employee unions are in grave jeopardy, not least because of the supreme court ruling. The declining share of total US income going to the middle since the late 1960s – defined as 50% above and 50% below the median – correlates directly with that decline in unionization.

Perhaps even more significantly, the share of total income going to the richest 10 percent of Americans over the last century is almost exactly inversely related to the share of the nation’s workers who are unionized. (See chart below). When it comes to dividing up the pie, most American workers today have little or no say. The pie is growing but they’re getting only the crumbs.

Over the same period time, antitrust enforcement has gone into remission. The US government has essentially given a green light to companies seeking to gain monopoly power over digital platforms and networks (Google, Apple, Amazon, Facebook); wanting to merge into giant oligopolies (pharmaceuticals, health insurers, airlines, seed producers, food processors, military contractors, Wall Street banks, internet service providers); or intent on creating local monopolies (food distributors, waste disposal companies, hospitals).

This means workers are spending more on such goods and services than they would were these markets more competitive. It’s exactly as if their paychecks were cut. Concentrated economic power has also given corporations more ability to hold down wages, because workers have less choice of whom to work for. And it has let companies impose on workers provisions that further weaken their bargaining power, such as anti-poaching and mandatory arbitration agreements.

This great shift in bargaining power, from workers to corporations, has pushed a larger portion of national income into profits and a lower portion into wages than at any time since the second world war. In recent years, most of those profits have gone into higher executive pay and higher share prices rather than into new investment or worker pay. Add to this the fact that the richest 10% of Americans own about 80% of all shares of stock (the top 1% owns about 40%), and you get a broader picture of how and why inequality has widened so dramatically.

Another consequence: corporations and wealthy individuals have had more money to pour into political campaigns and lobbying, while labor unions have had far less. In 1978, for example, congressional campaign contributions by labor Political Action Committees were on par with corporate PAC contributions. But since 1980, corporate PAC giving has grown at a much faster clip, and today the gulf is huge.

It is no coincidence that all three branches of the federal government, as well as most state governments, have become more “business-friendly” and less “worker-friendly” than at any time since the 1920s. As I’ve noted, Congress recently slashed the corporate tax rate from 35% to 21%. Meanwhile, John Roberts’ supreme court has more often sided with business interests in cases involving labor, the environment, or consumers than has any supreme court since the mid-1930s. Over the past year it not only ruled against public employee unions but also decided that workers cannot join together in class action suits when their employment contract calls for mandatory arbitration. The federal minimum wage has not been increased since 2009, and is now about where it was in 1950 when adjusted for inflation. Trump’s labor department is busily repealing many rules and regulations designed to protect workers.

The combination of high corporate profits and growing corporate political power has created a vicious cycle: higher profits have generated more political influence, which has altered the rules of the game through legislative, congressional, and judicial action – enabling corporations to extract even more profit. The biggest losers, from whom most profits have been extracted, have been average workers.

America’s shift from farm to factory was accompanied by decades of bloody labor conflict.

The shift from factory to office and other sedentary jobs created other social upheaval. The more recent shift in bargaining power from workers to large corporations – and consequentially, the dramatic widening of inequalities of income, wealth, and political power – has had a more unfortunate and, I fear, more lasting consequence: an angry working class vulnerable to demagogues peddling authoritarianism, racism, and xenophobia.

Is this thread some stupid meme collection?

lol ... the venezuelan diet ..

I'd much rather live in a nation with a greater social net like Finland, Denmark, Sweden, etc., than a capitalist nation like the US or the UK.

So basically, capitalism is an automated machine that churns out wealth for those born into privillige and wears a golden mask constructed of the profitable lives of the luckiest handful of people (often the fiscal elite), though often capitalists refuse to show the opposite side where those born into poverty or social / societal strife are not only ignored, but not cared for by the greediest of people who can't stand to pay slightly more taxes for slightly greater healthcare, transport, education, etc. This then feeds a cycle of those poorer than the rest of us being unable to afford higher education, as a result they struggle to find work and are forced into menial or even deadly occupations. What's worse is that the reason they suffer is likely even more so due to the fact that their parents are poorer, which leads to worsening social conditions, distractions at school and potential issues stemming from it.

Socialism is not a be all, end all solution but it has worked in places where it has been implemented correctly. Venezuela is often brought up yet the many other, often far more prosperous nations suspiciously never come up. What's more is that a prosperous socialist nation will almost always be a more prosperous nation than a prosperous capitalist nation, due to greater equality and infrastructure.

So I disagree wholly. In fact, I think all nations need to implement some kind of socialist policy to even be considered civilised.

This is not true at all as a socialist economy cannot create wealth. It can only distribute and reduce what is already available.

Which is why there are no rich Fins? You can have a mix of private enterprise and a progressive tax which lessens the very real danger to Democracy of concentrated wealth. European Democratic Socialist nations don't eliminate capitalism.