Bernie Sanders, an independent U.S. senator who is running for president under the Democratic Party banner, is routinely referred to as a socialist — even by himself, although he clarifies that he is a “democratic socialist.”
For many Americans, the term “socialist” is associated with tyrannical governments, state-run economies and the general suppression of individual liberty — the primary historical example being the late Union of Soviet Socialist Republics.
This negative connotation of the term is wielded by some as a verbal spear to impale anyone who proposes or supports any government action that would impede or interfere with a free market and the acquisition of unlimited personal wealth.
In today’s absolutist ideological thinking, capitalism is always the antagonistic antithesis of socialism. And, indeed, capitalism has been the superior approach to organizing an economy.
Attempts to organize economies around state-run collectivist models have been dismal disasters. The clear winner of the Cold War has been capitalism.
Capitalism won because it complements rather than clashes with natural human tendencies of competition and greed. By sublimating these tendencies into individual enterprise and invention, capitalism has broadly raised living standards and spread prosperity among more people than any economic system ever has.
If left unattended, however, free-market capitalism eventually degenerates into abusive exploitation. Some prudent policing is necessary to keep the marketplace clear of piratical predators and entrenched monopolies.
Regulatory mechanisms that ensure equal opportunity for all players and prevent manipulations that concentrate wealth with the few are crucial for maintaining a democratic society and vibrant markets.
The essential economic mainstay of democracies — and of free-market capitalism — has been a strong, expanding, middle class. Marxists clearly understood this and saw “the bourgeoisie” as a formidable obstacle to establishing their communist paradise.
The threat to America and free-market capitalism, is not socialism, it is unmitigated greed.
The “trickle-down” brand of capitalism sold to the nation 30 years ago by President Ronald Reagan’s band of Randian economists has resulted in the steady demise of the American middle class and a growing national debt abetted by reckless tax cuts. Not to mention the transmogrification of health care, higher education, charity, government service, and just about every sector of the economy into voracious profit centers for the grasping economic elite.
Corporations and the 13,400 American families who own most of them have effectively captured government and declawed the regulators.
Notice that virtually no Wall Street banker was prosecuted for the massive fraud that resulted in the Great Recession. Although independent journalists found more than 100 insider whistle-blowers who fingered bank executives, federal prosecutor Lanny Breuer claimed he could not find enough evidence to indict any of them.
Breuer later resigned his federal post to become vice chairman of a law firm that represents many of the banks he had so feebly investigated as federal prosecutor.
A continuing cascade of data reveals that the greed of the few is undermining the general welfare of the nation.
For example, nearly all the wealth generated in the United States since the Reagan years of the 1980s has gone to the tiny tip of the economic pyramid. In that time the economic elite have increased their annual incomes several fold, while the annual income of the average American has virtually stagnated.
Is this happening because Americans are not working hard enough? No.
U.S. productivity has increased significantly since the Reagan years. The problem is that the forces of greed have uncoupled compensation from productivity and have compressed American wages to the lowest level among the world’s advanced economies.
In fact, America’s wage profile looks more like that of a developing nation than that of an advanced one.
Reagan’s voodoo economics promised prosperity for the many, but mostly enriched the few. A key element of voodoo economics is lowering tax rates on wealthy individuals and corporations.
But for the forces of greed, that isn’t enough. By working the tax code and exploiting offshore tax havens they have driven their effective tax rates even lower — well below the nominal rates, even into the single digits.
Those who howl that efforts to remediate economic imbalances are class warfare are right about the warfare part. But as Warren Buffet noted a few years back, “There has been class warfare going on now for the last 20 years and my class has won.”
Compared to the United States, Germany, the world’s fourth-largest economy, with its high pay scales, ample benefits, and health care and college provided for all, is a socialist country. The same can be said of Australia, New Zealand and many northern European nations.
These nations have strong middle classes and vibrant economies with a more even distribution of wealth. They are not oppressive collectivist tyrannies. They are social democracies that practice a healthy form of capitalism.
The forces of greed attempt to discredit Sanders by calling him a “socialist.” But, listen to what he has to say and evaluate his proposals objectively.
Whether they are called “capitalist” or “socialist” doesn’t matter. What matters is what works to strengthen the nation and preserve capitalism for the benefit of everyone, not just the few.
— Randy Alcorn is a Santa Barbara political observer. Contact him at randyalcorn@cox.net, or click here to read previous columns. The opinions expressed are his own.