Thursday, November 5, 2009



Since Barack Obama won the White House last year, Republicans have galvanized their opposition by claiming that Democrats want to introduce "socialism" into American life. They do not really understand what "socialism" means; they just use it as a catchall pejorative to label anything they don't like. They don't like anything that makes them pay more taxes or finance other people's welfare. They don't like anything that transfers money to so-called "wasteful programs," like health care, education and environmental protection. They know that the word "socialism" sends shivers up American spines, so they use the word to describe everything they're not. They even criticize other countries for embracing "socialism."

But all these critiques fundamentally miscomprehend "socialism." The United States is not a socialist country, not even close. True socialism means that the State owns all property and controls the means of economic production and distribution. It also means that every citizen is literally equal to every other citizen. It is essentially humanitarian in theory, even if historical examples show that it can tragically fail in practice. No matter the historical record, there is nothing even remotely socialist about the United States. Americans live for private property and class distinctions. If they were socialists, they would not strive for these things; in fact, they could not even own property. Democrats are little different than Republicans in this sense. Neither party wants to abandon the free market system. The only debate is how much they want government to "interfere" in the free market.

This is the point at which Republicans stray into conceptual ignorance. They think that any government interference into the free market is "socialism." Yet this overlooks a trend that has evolved in the West at least since the early 20th Century: Increased government supervision over private economic enterprise. Governments in traditionally capitalist countries understood that leaving all economic functions to the free market led to labor exploitation, dangerous goods and unfair social relationships. Democratic governments (or at least quasi-democracies like Great Britain and the United States) also found that unbridled capitalism tended to subvert constitutional principles, such as human dignity and equality.

For these reasons, governments in traditionally capitalist countries began encroaching upon private economic liberties for the public good. They instituted labor control boards, product safety boards and oversight committees. They enforced minimum wages and guaranteed workers the power to fairly bargain with management. They even began creating social security nets and health care systems for their populations, distributing tax revenues in such a manner as to realize the dream of a better society for all. These reforms were all "social" in nature, but they never completely replaced the free market. Rather, they merely tempered the free market, reconciling principle with economic reality. Yet Republicans today call such efforts "socialism." This is simply untrue. If anything, Western Nations have "modified free market" systems, not socialist systems.

European Nations have generally made many more "social modifications" to their free market systems than the United States. For many reasons, Europeans have been willing to curtail unbridled economic liberty in order to bring greater social advantages to their populations. This is the reason why many Europeans do not understand why Americans cannot resolve their "health care mess." For Europeans living in "modified free market systems," it goes without saying that every citizen has a right to medical care at State expense. Yet in America, that sentiment is not so widespread. Here, there is always a grave tension between social "guarantees" and economic freedom. When social "guarantees" mean that some people cannot amass as much money as they could without the guarantees, they staunchly oppose any effort to curtail their economic liberty. This is the reason why social modifications to the free market system in the United States are much more modest than in Europe: Too many people resist them in order to preserve their ability to make more money fast.

Both the United States and European Nations are free market societies. Both allow private property. Both have central banking systems, stock exchanges and tolerate massive class distinctions. But citizens in European Nations have allowed government to restrict their economic freedom more than their American counterparts. In exchange for those restrictions, they live in more secure circumstances: There is universal health care, ample housing and free education. European Nations understand that pure free market life is not easy. Employment depends as much on the winds of the market as it does on individual ability. In that light, they made sacrifices to provide a safety net against the market's inevitable "down periods."

By contrast, the United States does not provide such a safety net. True, the United States does provide health care to the elderly, the disabled and those who serve government. It provides modest income to retirees and injured people. It also allocates some funds to protect citizens against homelessness and ruin. But that's about it; America's commitment to "modifying the free market" essentially stopped in the 1960s. Since then, any effort to make "European style" changes has met with angry cries of "Socialism!" Both Europe and the United States made substantial changes to their free market systems in the decades after the 1929 Crash. But only Europe continued along that path after the 1960s. Once America asserted global dominance, it somehow decided that caring for its own people was no longer a top priority.

I think this is an unfortunate development. Americans should not shy away from "European style" improvements to our social order because they are supposedly "socialist." Europe embraces free market capitalism, just like we do. It simply imposes greater controls on unrestricted economic liberty than the United States. Those restrictions translate into tangible social benefits in the form of health care, consumer protections, access to justice, labor oversight, transportation, child care, unemployment insurance, pensions and education. People do not go bankrupt financing their education in Europe, nor do they die waiting for a private insurance company to approve surgery. They might pay more taxes to finance these social protections, but they know they will always have a place to stay or health care if they get sick. Unlike Americans, they do not need to worry about losing their precious jobs if illness strikes. Yet all the while, they can own private property and perhaps get rich. Just because they enjoy social protections at government expense does not make them "socialist."

Why does America reject these things? What makes us so different from our European counterparts? Do we treasure our rugged "do-it-yourself" spirit so much that we tolerate social injustice on a massive scale? Are we too greedy or too proud to abandon our chance to make fabulous wealth at a low tax rate? What is it, exactly? I cannot pinpoint it; I can only speculate based on my own impressions.

One thing is certain: There is a poisonous aura surrounding the word "socialism," and that aura preemptively sabotages many efforts to implement meaningful reforms to our social system. Sadly, opponents to social reform in the United States do not even understand what the word "socialism" means. And they do not even understand that they are not opposing socialism, but rather incremental modifications to the free market system they love so much.

We have known for more than a century that pure capitalism does not work. Any system premised upon human greed will inevitably become top-heavy and collapse. And purely capitalistic values clash starkly with core principles central to a democratic State in modern times, such as dignity, fairness and equality. From the 1930s until the 1960s, the United States understood that. It made meaningful modifications to the free market in order to mitigate the social shockwaves caused by its cyclical booms and busts. But then the progress stopped. Capitalism failed again last year and people have felt the pinch ever since.

America will not progress as long as it embraces false rhetoric about "socialism." It is not "socialism" simply to safeguard our citizens from economic ruin in a free market system. It is humanity.

Then again, perhaps that is what really rankles Republicans. After all, pure capitalism and humanity don't mix. Genuine humanity is bad for business. Humanity makes it harder to exploit others. Maybe that's what all the Rush Limbaugh rhetoric about "economic liberty" is all about: Liberty means the freedom to be economically inhumane to others in order to advance yourself. Or, phrased another way, liberty means freedom from government regulations that prevent you from being economically inhumane in order to advance yourself.

Against opposition like this, we have a long way to go in this country toward social reform.


nothingprofound said...

Great post as always. It kills me that more people aren't reading your articles. Have you ever considered a Shameless Blog Promotion on the BC forum discussion board? More people really need to hear what you have to say. The clarity and intelligence of your writing is phenomenal.

Balthazar Oesterhoudt said...

Thanks so much again for your comment, Profound. It is always a pleasure to hear from you.

Truth be told, I have been seriously preoccupied over the last six weeks. Several crises took me away from my writing altogether, including the promotional side. Thankfully all is falling into place now, and as you can see the creative juices are flowing again. Now I can start worrying about promotion!

I am glad you liked the article. And your encouragement always gives me a big boost.

Timoteo said...


SteveW said...

I can point to one source of what you're missing here.

Whenever you talk about capitalism, you use absolute terms: unbridled, unrestricted, the United States does not provide a safety net (Medicaid, food stamps, unemployment insurance, and public education not withstanding), unrestricted economic liberty, pure capitalism, pure free market.

By contrast, when you talk about "socialism", you use nuanced terms: government supervision, [unions are] a power to bargain fairly, the reforms temper the free market, social modifications, incremental modifications.

Us "free market" folks are attacked by your absolutist rhetoric all the time, and you wonder why you get volleys back using absolutist rhetoric. You also make a number of conclusions that are, at the very least, arguable (here's one: capitalism didn't collapse last year, Wall Street has essentially become a modified government program since at least the '70s, and that government program collapsed last year). Until honest debate can occur, the two sides will continue to talk past each other.

When you understand why you are unable to articulate the strengths of capitalism, and to describe the system we have as it is (rather than pretending that one of the most regulated trading systems in the world is somehow unfettered capitalism), then you may begin to understand why your opponents are unable to articulate the strengths of socialism and describe proposed government modifications as they are.

angelshair said...

I understand much better now why this healthcare reform is so hard to pass. I really hope that the media will do their job and really inform the population, and as clearly as you did in this post.

Balthazar Oesterhoudt said...

I wish that media sources would do more to present the real issues in the healthcare debate, too. But I have learned not to expect much from mainstream media outlets in the United States. After all, it takes a lot of money to run a news bureau; who do you think is paying for them to operate? You guessed it: Big companies. Do you think they will tolerate speech that chafes against their financial interests? Certainly not.

I get my news from a variety of sources. I read all the American sources, as well as German, British and Italian ones. I find European coverage much better than American coverage, be it left or right. In this "information" age, we all have a responsibility to do even MORE research on public issues precisely because there are so many more places to look than ever before. It is impossible--and even dangerous-- to rely on only one source for information.