My Thoughts on Socialism in America

I am a baby boomer, a post WWII son of 2nd generation immigrant parents. I'm a bit older than Paul Krugman, but I grew up in exactly the same America he talks about in "Conscience of a Liberal".

Postwar America was, above all, a middle-class society. The great boom in wages that began with WWII had lifted tens of millions of Americans - my parents among them - from urban slums and rural poverty to a life of home ownership and unprecedented comfort. The rich, on the other hand, had lost ground. They were few in number and, relative to the prosperous middle, not all that rich. The poor were more numerous than the rich, but they were still a relatively small minority. As a result, there was a striking sense of commonality: Most people in America lived recognizably similar and remarkably decent material lives.

Krugman further noted that as WWII ended, 35% of American workers were unionized and as late as 1970 that figure still remained around 27%. Throughout this period, working class Americans were narrowing the wage gap not only with the professional class (lawyers, engineers, accountants, etc.) but also with skilled laborers such as machinists and tool/die makers.

It must be noted that during this period, the social programs initiated during the New Deal not only remained pretty much intact, but had more or less been accepted as a political status quo. Even President Dwight Eisenhower, in 1954, confided to his brother that efforts of some millionaire businessmen and a few politicians to abolish social security, and eliminate labor laws and farm programs were "stupid" and anyway, their numbers were negligible.

Oh my, how times have changed. I'm sure we can all agree that the political thinking of today is a full 180 degree turn from 1954. Moreover, the future of the American worker, no matter the skill level, is in serious jeopardy. Starting in the 1960s, the conservative movement began to push back against the social programs of the New Deal and finally in the 1980s, with the election of Ronald Reagan, it began to dismantle that social network. A new gilded age was born extolling the virtues of deregulation, free enterprise and individual responsibility.

Today, we live at the end of the third decade of "free market capitalism" in America. The corporate modus operandi today is, if there are "undue" restrictions, or inconveniences, on the operations of a business, then it is their job to get around them. We live in the age of the technocrat, the quantitative analyst. As William Blum puts it:

Corporations, whether financial or not, strive to maximize profit as inevitably as water seeks its own level. We've been trying to "regulate" them since the 19th century. Or is it the 18th? Nothing helps for long. You close one loophole and the slime oozes out of another hole. Wall Street has not only an army of lawyers and accountants, but a horde of mathematicians with advanced degrees searching for the perfect equations to separate people from their money. After all the stimulus money has come and gone, after all the speeches by our leaders condemning greed and swearing to reforms, after the last congressional hearing deploring the corporate executives to their faces, the boys of Wall Street, shrugging off a few bruises, will resume churning out their assortment of financial entities, documents, and packages that go by names like hedge funds, derivatives, collateralized debt obligations, index funds, credit default swaps, structured investment vehicles, subprime mortgages, and many other pieces of paper with exotic names, for which, it must be kept in mind, there had been no public need or strident demand. Speculation, bonuses, and scotch will flow again, and the boys will be all the wiser, perhaps shaken a bit that they're so reviled, but knowing better now what to flaunt and what to disguise.

This is another reminder that communism or socialism have almost always been given just one chance to work, if that much, while capitalism has been given numerous chances to do so following its perennial fiascos. Ralph Nader has observed: "Capitalism will never fail because socialism will always be there to bail it out".

Coincidentally, while Paul Krugman and I grew up in that middle class America of socialist ideals, there was also a Cold War emerging with the Soviet Union. One of the most unfortunate results of that Cold War was the decades of anti-communist propaganda stamped in people's minds as a lasting association between socialism and what the Soviet Union called communism. Socialism came to be understood as a dictatorship. It meant Stalinist repression, a suffocating planned economy, no freedom of enterprise, no freedom to change jobs, elimination of personal expression, and other similar vagaries. This is a set of beliefs that even Americans opposed to US foreign policy religiously cling to. It is the long held American version of the boogie man. No matter how bad our capitalist economy is, Americans think and have thought, that the only alternative available is something called "communism", and they know how "awful" that is.

To further the confusion, conservatives in England, for many years following the end of WWII (and culminating with Margaret Thatcher), filled the minds of the public with the idea that the British Labour Party was socialist. And when recession hit (as it has cyclically in capitalist countries) the public was reminded, and they believed, that "socialism had failed". And America picked up on this nuance.

Yet, ever since the dissolution of the Soviet Union in 1991, polls taken in Russia have shown a nostalgia for the old system. In the latest example, "Russia Now", a Moscow publication that appears as a supplement in the Washington Post, asked Russians: "What socio-economic system do you favor?" The results were: "State planning and distribution": 58% ... "Based on private property and market relations": 28% ... "Hard to say": 14%.

Many Americans cannot go along with the notion of a planned, centralized society. To some extent it's the terminology that bothers them because they were raised to equate a planned society with the worst excesses of Stalinism.

But looking back to the dawn of my world and Paul Krugman's too, recall that a major war, WWII, tested Americans and subjected us to our greatest collective stress. In WWII, the US government commandeered the auto manufacturers to make tanks and jeeps instead of private cars. When superior weapons were called for and the atomic bomb was foreseen, Washington did not ask for bids from the private sector; it created the Manhattan Project to do it itself, with no concern for balance sheets or profit and loss statements. Women and blacks were given skilled factory jobs they had been traditionally denied. Hollywood was enlisted to make propaganda films. Indeed, much of the nation's activities, including farming, manufacturing, mining, communications, labor, education, and cultural undertakings were in some fashion brought under new and significant government control, with the war effort coming before private profit. And in the wake of this directed capital allocation and unwitting move toward wartime socialism, America won the war and became a prosperous society.

So, likewise in peacetime, we can think of socialism as putting people before profit, with all the basics guaranteed - health care, education, decent housing, food, jobs. Those who swear by free enterprise argue that the "socialism" of World War Two was instituted only because of the exigencies of the war. That's true, but it doesn't alter the key point that it had been immediately recognized by the government that the wasteful and inefficient capitalist system, always in need of proper financial care and feeding, was no way to run a country trying to win a war.

Again, from William Blum:

It's also no way to run a society of human beings with human needs. Most Americans agree with this but are not consciously aware that they hold such a belief. In 1987, nearly half of 1,004 Americans surveyed by the Hearst press believed that Karl Marx's aphorism: "From each according to his ability, to each according to his need" was included in the US Constitution.

In 1994, Mark Brzezinski (son of Zbigniew) was a Fulbright Scholar teaching in Warsaw. He asked his students to define democracy, expecting a discussion on individual liberties and authentically elected institutions. Instead, he was surprised to hear his students respond that to them, democracy meant a government obligation to maintain a certain standard of living and to provide health care, education and housing for all; in other words, socialism.

It is not so easy for us in America 2009. The indoctrination has been long and thorough. The believers in free market capitalism have been discredited but the entrenched status quo is still powerful and very vocal. The media propaganda machine wants to protect and continue that status quo.

I do not pretend to have all the details for the new society that needs to evolve. It will take much trial and error to arrive at that place. Having said that, I believe we should give heavy emphasis to reducing the profit motivation in making decisions and, instead, seriously address our environmental degradation, promote universal health care, institute fairness in our labor and trade initiatives and generally put the common good and general welfare of the American public first. That's a rising tide that will lift the boats of all Americans, regardless of wealth status, ensuring a sustainable and reasonable quality of life for all of us.

Now if we can just find a political leader and the political will to make it happen. Paul and I weren't there for that part, so I have no insight how to make that happen.

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Comments

mixed economy

My favorite is when these various people rail against socialism and scream "we'll be like Europe"!!! Well, if anyone has ever been in Europe, it's pretty nice actually. Even more interesting is just how much of a hand the United States had in setting up those governments after WWII as well as Japan.

Nice post common good. About time the term socialism was returned to it's original meaning instead of bastardized to mean communism or totalitarianism.

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You are so right, Robert.

I have lived in Europe (Germany & Denmark) and traveled extensively throughout most of Western Europe. My credo was always, "When in Rome, do as the Romans do". But, I frequently felt embarrassed whenever I crossed paths with American tourists because they almost always failed to try to "be" European. The truth is, Europe's standard of living is much better than America's. They are healthier, eat better, have more time off and work fewer hours than we do.

I was 19 years old when I first experienced Europe in 1966. I was assigned to an Army unit in Germany and was constantly overwhelmed by the antiquity of my village and the humanity of its residents. They spoke a different language, but their hopes and dreams were the same as mine, and everyone else I could recall back home.

Later, I was fortunate to travel to various parts of the world, the Middle East, Central America, and Southeast Asia. I can honestly say that people in all the places I have been are pursuing the same thing. They want to achieve a reasonable standard of living, provide an opportunity for their kids to do better, and have the ability to reflect on their small legacy to humanity in the end. Pretty much what you and your next door neighbor want to achieve in one lifetime.

It's not a high minded goal, when you think about it. It's just people being people wherever I have gone. But this is getting into another subject, "American Exceptionalism", about which I have a lot of feelings. That may be the subject of my next post.

As a country and people, we need to challenge the conventional wisdom that we have been subjected to for so long. Only then, I think, will we emerge as the dominant society that so many of us already believe we are.

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Income inequality and standard of living

Our Gini Coefficient, a measure of income inequality, is the same as Mexico's

I recently came accross this standard of living index created by U.N. (I know, I know) - Human Development Index. We are ranked #15 of highly industrialized countries. It looks like all those "socialist" countries are ranked higher in standard of living.

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another is PPP

Purchase Power parity. PPP wikipedia. That takes into account exchange rates and there is also per capita.

China is right behind the United States on PPP.

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And my generation, Generation X is left wondering

After 8 layoffs/firings in a 15 year career, if I wouldn't have been better off without the freedom and with the security of a dictatorship.

Milton Friedman was right when he said that the fear of free markets, is often the fear of freedom itself. What he failed to comprehend is why freedom is something to be scared of- freedom includes the freedom to defraud (for the rich) and the freedom to fail (for the poor). These are not freedoms that are good to have in any society.
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Moral hazards would not exist in a system designed to eliminate fraud.

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Maximum jobs, not maximum profits.

Planned economy versus Stalinism

1) You wrote: "In WWII, the US government commandeered the auto manufacturers to make tanks and jeeps instead of private cars. When superior weapons were called for and the atomic bomb was foreseen, Washington did not ask for bids from the private sector; it created the Manhattan Project to do it itself, with no concern for balance sheets or profit and loss statements. Women and blacks were given skilled factory jobs they had been traditionally denied. Hollywood was enlisted to make propaganda films. Indeed, much of the nation's activities, including farming, manufacturing, mining, communications, labor, education, and cultural undertakings were in some fashion brought under new and significant government control, with the war effort coming before private profit. And in the wake of this directed capital allocation and unwitting move toward wartime socialism, America won the war and became a prosperous society."

I do not think that a goal-oriented economy should be identified with socialism. The author continues

2) You also wrote:"Socialism came to be understood [in America] as a dictatorship. It meant Stalinist repression, a suffocating planned economy, no freedom of enterprise, no freedom to change jobs, elimination of personal expression, and other similar vagaries.”

Planned economy can serve different goals, those that we approve and those that we do not approve. Stalinism should be identified with brutality and violence, against Soviet people, not with planned economy. Planning is an essential precondition for a successful activity in any level.

3) Those who are not familiar with Stalinism are likely to learn a lot about it from my short book. For details see

http://csam.montclair.edu/~kowalski/excerpts.html

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Ok, if socialism isn't goal oriented

I do not think that a goal-oriented economy should be identified with socialism.



If socialism isn't goal oriented, what is it? I'm not sure I understand. I'll look at your excerpts, at least.

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Moral hazards would not exist in a system designed to eliminate fraud.

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Maximum jobs, not maximum profits.

a clarification

1) Socialism can be, and should be, goal-oriented. But what is goal-oriented is necessarily socialism. That is all I wanted to say.

2) Thank you for reading the excerpts. Comments on this website, or in private, would be appreciated.

Ludwik Kowalski kowalskiL@mail.montclair.edu

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Ludwik Kowalski some technical details

While comments are allowed anonymously they go into a moderation queue for review by the admin (which is me).

To turn on unmoderated comments and the rest of the site features, see the upper right hand corner and create an account.

It's a security thing.

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a correction

1) The word NOT was omitted in my comment. The sentence should be:

Socialism can be, and should be, goal-oriented. But what is goal-oriented is NOT necessarily socialism. That is all I wanted to say.

2) Posted this correction yesterday, after subscribing, but it did not appear. I suspect I am not doing things properly.

Ludwik

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Ludwik

admin stuff - logged in

You can tell if you are logged in because the "my account" will appear on the right hand side and the letters you must type in to prove you are a human disappear. Over on the right hand side is a user guide to help with technical issues on the site.

Happy blogging.

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Wow! 53% Say Capitalism better than Socialism

Wow. We are truly missing an opportunity to transform our economy.

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What kind of opportunities?

Did you have in mind?

Also, the Rasmussen poll also showed that folks still favored free markets. Not to be a Doctor Pooper here, but what we have here is more evidence of a lack of education by the general public not just of economics but of meaning of certain words. This is the only country, that I'm aware of, were the word "Liberal" connotates a statist definition.

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Opportunities to transform economy

to one that is based on production, one that focuses on the importance of the investment in people. One that provides a safety net for those who are victims of globalization.

Pres. Obama's budget had that opportunity but unfortunately it risks totally being crowded out by the bailout.

To some people this sounds utopian but hell we recently elected the African-American president after that anything seemed possible. I am not too sure now.

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A rose by any other name.

I have deep reservations about polling, especially Rasmussen's. They seem to produce too many outliers.

JV, you're right to point out that 70% favored "free markets". The question is, what does "free market" mean to each respondent. Same for "socialism", what is that? The value of polling is directly related to how well the question is framed and to what use the results will be applied. The best interpretation I can find in this particular poll is that the respondents under 30 were almost evenly divided as opposed to the overall results. To me, this supports one of my main points, that the propaganda initiated in conjunction with the cold war, equated socialism with some pretty negative, even nefarious scenarios. It was red scare lite and, from these poll results, it looks like it worked.

The younger generations just don't see the world in a cold war context. There is a chance that some convergence will occur (that's what we talked about back in my college days) now which will bring the socio-political pendulum back to the humanitarian side. That was the change I voted for and I guess that just goes to show how ridiculous our election process is. It's no better defined than so many polls, and the outcome reflects that. Obama's early actions on the financial crisis, unitary executive powers, state secrets, torture, fair trade, even the environment, are all creating resistance to changing the unbalanced and unfair status quo.

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I have to wonder

FTA: "The question posed by Rasmussen Reports did not define either capitalism or socialism"

Which makes me wonder, with the state of current propaganda against socialism, what percentage of the respondents actually knew what the hell they were talking about.
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Executive compensation is inversely proportional to morality and ethics.

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Maximum jobs, not maximum profits.

Thank you all for providing your reflections

I am filled with gratitude and pride that Commongood has finally posted and that there is more to come from this thoughtful and intense man. It is through a forum such as this where the articulate, and those of us less articulate, can begin and advance the process of "challenging the conventional wisdom." Keep em coming Commongood and friends!!!

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For the Common Good

What is The Common Good’ amongst an Uncommon Populace.
Speaking of a Common Good is like saying that something is of good common sense.
In example there are section 8 people across the street.
They own an Escalade, have cell phones, do their drugs, use food stamps, procreate like rabbits.
Are these the folks that should share in my hard labors?
What is their common good and why should I adopt it?

I grew up in a family of 12 in upper Appalachian Mountains.
We refused welfare food stamps and the like, but we did receive occasional cheese from government surplus.
We were taught faith. We shared everything from toys to clothing etc.
We walked to church and the bus stop.
We grew our own food, cut our own wood.
I worked on the neighbors farm (staunch Democrats) for $0.50/hour (Min wage was $1.80)
I was happy.

I finished school and joined the Navy.
I learned several trades and skills. I worked several jobs in the electronics field.
I started a business with my partner in the early 80’s with $100.00 between us.
We grew the business to $12 million in 16 years.
At this time I retired somewhat early.
I am still happy.

I have traveled to many Socialist countries.
The Chinese send their children to slave factories to work for pennies, a year at a time with only 1 week furlough. They are not happy
The streets of Kiev and Moscow are full of abandoned children, starving, stealing, pimping. They are not happy.
The largest industry in Cambodia is the sex trade of children. They are not happy

It is often said: ‘The Rich get Richer and the Poor get Poorer’. My rhetorical question for you today is “Are you Rich or Are you Poor?”

I have Nothing in Common with a Poor Mentality

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