Democratic socialism versus democratic capitalism in America

Bernie Sanders, the socialist senator from Vermont, entered the Democratic primaries in 2016 as an advocate of “democratic socialism”. Since then, “democratic socialism” has come to describe what is known as the left wing of the Democratic Party.

So, what is democratic socialism?

The classic definition of socialism is “a system of government in which the means of production and distribution of goods are owned, controlled or regulated by the government.”

The most radical form of socialism is communism, where all property is owned and distributed by the government. Less radical forms of socialism are seen in the governments of Western Europe, where private property is recognized but government has the responsibility of acquiring (through taxes) enough wealth to provide for physical well-being of all its citizens, however that may be interpreted at any given time.

As the demands of the population grow, so does the amount of tax revenue needed to provide for these demands. At some point, especially when unemployment is high, the taxes on the companies producing the country’s wealth get so great that those companies cannot keep up, and the entire system fails. If not stopped, people will start to go hungry, and riots will follow – as is happening in Venezuela right now. American examples of this situation are Detroit and Puerto Rico, which have taxed themselves into bankruptcy. 

Socialism versus industry: a struggle for power

If we remember that taxes depend on profits, it is easy to understand why there is always tension between government and industry over control of profits.

This tension takes place on two levels. The first is the practical requirements of government’s need to fund citizen services versus industry’s need to fund its operations. Both have altruistic justifications as well as practical needs. Government takes care of the poor with welfare programs; and industry takes care of everybody else with employment and the material means to enjoy life.

But there is also an underlying, less obvious tension between government and industry, a tension which transcends the matter of who signs the paycheck. This is the struggle for power. The logic is simple: socialism is synonymous with “big government”. “Big government” means “control.” “Control” means the ability to impose one’s ideas and preferences on others. Government control means the capacity to suppress the freedom of people by requiring people to do unreasonable things, such as giving up meat or cigarettes or Coca Cola.

It is this aspect of a socialist government which is most objectionable to many people, especially Americans. The entire legacy of American culture is built around personal freedom, “Life, Liberty and the Pursuit of Happiness.” It is in the American DNA. We cede to government only the minimum authority over us that is required to live together in peace. But no more.

People do not have to have a lot of money in order to enjoy life. Government officials have a big office, a chauffeured limousine, staff to do their bidding, a gym, a private dining room, access to media at will, and all the other perquisites of wealth. These people have power over the rest of us, and, especially in the bureaucracy, they can live in a bubble which only vaguely resembles the ordinary lives the rest of us lead. These are the people who invent the rules by which the rest of us are supposed to live. And the rest of us want those rules to be as few and as reasonable as possible. The bigger the government, the more intrusive the rules, and the less we like it.

A view of our American system reveals a mixture of both ideologies, socialism and capitalism. At its core, however, the difference between these systems is their views of the role of government. The socialist believes it is the role of government to distribute the nation’s wealth as broadly and equally as possible. This means taking from the rich and giving to the poor. A noble goal indeed. But it is a strategy based on a view of society which is static: the rich are always rich and the poor are always poor.

Class conflict – the history

Thus, class conflict is essential to the socialist view of society. Class conflict has existed for most of human history, in which there were always the masters and the servants. The masters were rich because of their station in life – they were born into the ruling class — and the servants were born into the underclass. In different cultures and at different times, there was some social mobility often due to wars, but an Untouchable in India would never have had a chance to become a Maharaja.

Against this background, the servants’ only chance to improve their lives was to take over the government. This is essentially what happened in the Western world through a series of revolutions from 1776 (USA) to 1917 (Russia). The people who came to power in Europe saw the plight of the poor as a bottomless pit and the wealth of the rulers as an unlimited pot of gold. Guided to a large extent by the ideas of Karl Marx, they designed governments accordingly.

The American Way

Not so in the United States of America. This was a land controlled by people who had escaped both the walls and the comforts of the Old World and had survived in an environment which rewarded courage, skill and endurance, rather than birth and privilege. Their bias was against rather than favorable to government. They saw government as a greedy king out to take away their liberty. They therefore fashioned a government which was limited in every way by competing forces: the federal government by the states, the president by the legislature, each House of Congress was limited by the other, everybody by the courts – and so on down the line to the local dogcatcher.

The purpose behind this design was to keep government officials from ascending to the powers of that old king. They understood intuitively the saying of John Lord Acton a century later: “Power tends to corrupt, and absolute power corrupts absolutely.”

What they have left us is the American version of a capitalist society. It is dynamic, constantly changing. The poor may not always be poor; the rich may not always be rich. In fact, most Americans (58.5 percent) will spend at least one year below the poverty line at some point between ages 25 and 75 according to Yale University’s Jacob S. Hacker (The Great Risk Shift, New York, 2006). The wealth of the society is expected to grow constantly through the creation of new opportunities, new products and services, new jobs, new skills, and new technologies, leading to new and expanding wealth.

For Americans, the fundamental error of socialism is that it does not account for the creation of that wealth in the first place. Government cannot confiscate what isn’t there. Socialists foresee the proverbial pie of underclass income being cut into more and more pieces; Americans keep creating a bigger pie.

America’s Democratic Capitalism

The United States of America has brought together economic capitalism and political democracy in a dynamic tension which we call democratic capitalism, and which has produced the most prosperous nation in the history of the world. Its greater attribute is that it provides hope — hope that the poor may be able to escape the bonds of poverty as so many Americans have done in the past. This hope is the shining light on the hill which still attracts the envy of millions.

It has taken Americans most of our history as a nation to achieve the balance by which capitalism is accountable to democracy, and there are still many problems to be solved. Nevertheless, Americans are always optimistic.

 The motivation for individual Americans to persevere in pursuit of their personal goals is provided by the real and potential ownership of private property. No other motivator — not coercion, not slavery, not charity, not communal property — not even religion — has ever been found which can impel vast numbers of individuals in a society to be hard working and creative. Providing a good life for oneself and one’s family is a motivator above all others.

Life, Liberty and the Pursuit of Happiness – the American Way

Our history has proven that personal freedom is a necessary prerequisite for the success of this system. An oppressive government — even if well-intentioned – sucks out the initiative required to make an ever-better life for all of us. Personal freedom without economic freedom is no freedom at all. Capitalism, in a refined and mature linkage with democracy, provides the economic power which makes freedom possible.

The challenge to Americans is not to change an evil system; it is to live up to the ideals which are required for that system to succeed


Copyright, 2018 Richfield Press. Ltd.

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