Socialism, American-Style

http://www.nytimes.com/2015/07/23/opinion/socialism-american-style.html

by eplanit • 11 years ago

83 99 11 years ago

nytimes.com

ExpiredLink• 11 years ago

The fund collects and invests proceeds from the extraction of oil and minerals in the state.

This is not at all "Socialism".

BTW, state-owned factories almost always failed (numerous examples in 20th century Europe).

lyncnshare• 11 years ago

I wonder about the state owned investment funds and if there is a parallel to state owned factories. Norway has a giant sovereign wealth fund built off of its oil industry, but does it perform as well as a private fund would? What about the California pension funds. I understand that they get screwed by their private equity and hedge investments all the time. I wonder if they weren't public funds if they would have more clout on wall street and could work out better deals to get better returns.

eru3• 11 years ago

BTW, state-owned factories almost always failed (numerous examples in 20th century Europe).

Industrial factories, yes. Local utilities seem to do well enough in Europe.

I wonder if there's a principled difference?

pjc50• 11 years ago

Quite a lot of private factories have failed in the west too. Factories are very vulnerable to globalisation.

Utilities, on the other hand, are a natural monopoly inherently tied to a geographic location. They're not producing a "product", but instead a commodity that's the same for all customers. Many utilities are mostly forms of "road" - they just happen to be wire-shaped or pipe-shaped roads.

Note the mostly. Telecoms and electricity have two parts: the central, complex, services; and the big mostly-dumb network.

geon• 11 years ago

Like the electricity/internet provider in my city of Jönköping, Sweden. It is a for-profit company, owned by the municipality.

The Municipality obviously dictates the goals, like 100/100 fiber in the most remote parts of the area (which I just signed up for), and the company gets to execute them in the way it sees fit.

The municipality housing company is operated the same way.

_delirium3• 11 years ago

Many of these examples might be more specifically seen as a variety of Georgism [1]. There are a bunch of variants, but the general idea is a claim that everyone has a right to their share of proceeds from economic rent, especially land rent and mineral wealth, in some forms also proceeds from utility-like infrastructure. Since everyone is held to own an equal share of these by right, the revenues should be either distributed equally to everyone as "shareholders" (as in the Alaska dividend), or used to finance public goods.

There are some overlaps with socialism, especially social-democratic models of government. But clearly the full social-democratic program is nowhere near popular in conservative areas of the US. If you look at why only these specific ideas are popular in those areas, one commonality is that they have a Georgist feel to them. Or at least, I'll propose that as a hypothesis.

[1] https://en.wikipedia.org/wiki/Georgism

nickff• 11 years ago

We must also take into account what the alternative is. If the alternative presented to Gerogism is that the natural resources would be taxed, and these proceeds will be spent by the government, many conservatives and libertarians will side with the Georgists. The conservatives and libertarians are not necessarily supporters of basic incomes or similar schemes, they are often simply against increased (discretionary) government spending, and believe that distributing the funds to the people will have cause less market distortion and malinvestment.

_delirium3• 11 years ago

I agree that's probably a factor. But I think many conservatives in these cases also prefer a nonprofit or dividend-type model to a more libertarian-style private-ownership model. The Tennessee-valley opposition to privatizing the TVA is an example.

And in Alaska, the choice isn't only between paying out a dividend and letting the government keep the money. Alaska could simply abolish the severance tax entirely, and just let private mineral-rights owners reap the full profits. But that's not popular at all, even among people who identify as conservative. My suspicion, besides people voting their interests (probably a significant factor) is that unlike in the case where someone creates a product through their own labor, in the case of oil extraction, there is doubt that private land or rights owners really "deserve" the full profits from exploiting a resource they didn't create, but for various historical reasons happen to now own. Rather it seems to be more popular to allow them a profit on their extraction effort, but recapture some of the underlying value of the mineral asset for the people in general. (Texas also has a severance tax based on this kind of rationale, in its case used to fund government in partial lieu of an income tax.)

trentmb3• 11 years ago

What are the impacts on immigration policy under Georgism?

What are the impacts of Georgism on immigration policy?

rayiner2• 11 years ago

Should all land be publicly owned and rented out? I don't see why that's unreasonable.

eru3• 11 years ago

Moreover, contrary to conventional opinion, studies of the comparative efficiency of modern public enterprise show rough equivalency to private firms in many cases. (They aren’t perfect, of course: Many public agencies, boards and corporations that control enterprises are not fully accountable or transparent in their operations.)

Companies get efficient if they have to. Competition is one way to force their hands. (There might be others, like public oversight?) Private vs public ownership doesn't make too much of a difference.

kristopolous7• 11 years ago

State-managed capitalism and socialism are not the same thing. Putting a state-run monopoly in private hands (which is what's usually done), instead in state-run hands ... where the risks and profits are held by the same entity instead of the public bearing the risk and the private sector getting the profits? That's socialism? No...

This guy's a professor of political economy ... what a terrible word choice he's using.

According to him, not blindly gifting away the collectively-held public commons into the hands of private capital to sell it back to us is now called "Socialism".

What's next? Insisting cities which build private sports stadiums with public funds participate in profit sharing instead of just presenting the stadium with a little bow on top to some billionaire? Woah, Socialism cometh!

The real thing that's happening is that people want a fair shake... "If we're going to be on the hook in the bad times, then we should see some of the good time too." The companies that were bailed out with public funds now have record private profits ... that's the problem. It's got zilch to do with socialism.

calibraxis2• 11 years ago

He's writing for the NYT. I haven't read Gar Alperovitz's works closely, but he seems quite a serious thinker. I'm currently giving him the benefit of the doubt, that he has to phrase his message in certain ways to get published in NYT.

trentmb3• 11 years ago

They seem to 'know' their audience- the NYT isn't an academic economics journal, so playing a bit loose with terminology is OK- the simple fact is amongst the people at large socialism=government controlled as opposed to worker owned.... or some other academic definition I'm ignorant of.

twblalock3• 11 years ago

Most of the examples in the article are about state-owned, state-operated enterprises, such as sovereign wealth funds, utilities, oil and mineral extraction, etc.

In fact, I could not find any example of "putting a state-run monopoly in private hands" anywhere in the article. Did you even read it?

According to him, not blindly gifting away the collectively-held public commons into the hands of private capital to sell it back to us is now called "Socialism".

That's quite a strawman there. He never argued anything remotely like that.

ZeroGravitas• 11 years ago

I think those to examples are intended to describe "privatization" as it's often done (i.e. badly from an purely economic perspective, because it's partly/mostly ideological) which is, as you note, the exact opposite of the article's focus, which is state run stuff that makes economic sense.

That's combined with pedantry about the term "socialism", which has confused some readers of the comment.

So kristopolous appears to approve of certain things being run by the state, and would prefer that not to be described as socialism, as it might put people off who immediately dismiss anything with that label, and lead to more economically silly privatization or public subsidy of private profit.

baddox3• 11 years ago

I don't see a very significant distinction between "a state-run monopoly in private hands" and "a state-run monopoly in state-run hands." Each person is still an individual, after all, with "private" incentives. Whether their title is technically a government job is irrelevant, as long as their money is coming from government either directly (from the government budget) or indirectly (thanks to a government-enforced monopoly).

kristopolous7• 11 years ago

The differences are in the kinds of risks taken, how the revenue is allocated, and how the profits are handled.

The incentive structure of the two systems are different. This changes the outcome.

msoad2• 11 years ago

San Francisco rent control policy is another example of weird and conflicting policies in the U.S. I can't believe a policy like that is in place in the United States!

eru3• 11 years ago

They also have minimum wage in the US.

kristopolous7• 11 years ago

how so?

msoad2• 11 years ago

It's against free market

tete• 11 years ago

One should in my opinion not forget about two things here:

- The US American arms industry

- Welfare and other benefits for veterans

I think when it comes to citizens and industries somehow related to military the US has a history of applying (some) socialist principles, which is interesting, because it actually was used to "fight socialism".

_delirium3• 11 years ago

There's an interesting-looking book on that subject coming out this fall: http://www.hup.harvard.edu/catalog.php?isbn=9780674286139

hukep• 11 years ago

The article is misleading. It is far away from the concept of the socialism. I live in country in which were everything in public property for 40 years. It totally destroyed our state and the society as well..

realusername• 11 years ago

To the americans here, please understand that socialism is NOT communism. Socialism is regrouping a lot of different things (including the most extreme form of communism) and please do not mix the two together.

_r5wf2• 11 years ago

Perhaps today the meanings are different (one is a superset). But according to Von Mises:

"In the terminology of Marx and Engels the words communism and socialism are synonymous. They are alternately applied without any distinction between them. The same was true for the practice of all Marxian groups and sects until 1917. "

http://oll.libertyfund.org/titles/1060#lf0069_label_908

Also, uses of "Liberalism" has been changed even more throughout the history.

allendoerfer• 11 years ago

Commodities without an alternative (e.g. water) and natural monopolies (e.g. networks) should be owned by the public.

There is no point in having a market, when only one option makes sense or it is irrelevant which option you choose. There is no point in having competition, when it cannot improve the product or any process of its making.

In these cases private ownership just leads to cartels or innovation in marketing departments alone, both rising prices.

Having said that, the difficult part is to determine these cases and to figure out how to transition the privately owned companies into public property without stealing it or overpaying for it.

Another difficulty is to judge, when something suddenly stops to be one of these cases (e.g. postal services with electronic messaging as an alternative to it).

igonvalue• 11 years ago

Commodities without an alternative (e.g. water) and natural monopolies (e.g. networks) should be owned by the public.

Why do you think there's a water shortage in California right now?

splawn• 11 years ago

Lack of snow melt.

nightcracker6• 11 years ago

Why is socialism such a boogieman in the USA? I just don't understand it. Does everyone in the USA think they're a temporarily embarrassed millionaire?

I hear so many horror stories from the USA. People's lives ruined because they lost their job, got injured or have some addiction problem. But those same people will curse socialism in that same breath if asked. I just don't understand it.

I'm from the Netherlands, and I'm proud to say I live in a socialist country. It means that if I'm doing very well for myself, I'll give up a bit more than I would've in a strictly capitalist country. Instead of paying 25-30% tax, I'll pay 50%.

And that doesn't matter. If I'm earning 300k+ in a year, I can miss it.

In return I know that my life is safe from being destroyed, regardless of social class I'm born in or will move to. My parents don't have any money? It doesn't matter, education is free. If I have or get some disability, I will be taken care of. If I get injured, I will be taken care of. If I get sick, I will be taken care of. By the community. Anything else, in my book, is uncivilized.

---

To those citing governments destroying incentive structures (can't reply - your comment is deleted), I strongly suggest looking up the Dutch model for infrastructure. In a very, very summarized example, the government gives subsidy to private/public hybrid organizations. Those organizations compete in the regular market. In order to qualify for subsidy you need to meet the government standards. Think internet companies, hospitals, etc.

You're perfectly free to set up a 100% privatized hospital in the Netherlands - you just won't qualify for government subsidy.

x5n13• 11 years ago

According to Richard D. Wolfe https://www.youtube.com/user/RichardDWolff

It's because American Capitalists felt threatened by the Socialists, because the New Deal and a bunch of other things that happened in the 20th century due to unions and Socialist activism along with American elite alignment that scared them and their continued ability to run America for their interest, so they spread tons of rhetoric and propaganda to make Socialism a boogie man, eventually associating it with Communism... and it worked.

In general in the United States ideological words get muddled through rhetoric and propaganda until you can no longer talk about them. When this happens it's impossible to act on anything because you can't talk about it much less come to any conclusion about whether it's good or not or if it serves your interests. It's a brilliant propaganda technique that seems to have been mastered to stifle any debate about ideology.

ArkyBeagle4• 11 years ago

I think it generalizes to Americans being uncomfortable with anything they perceive as ideology. The propaganda just serves that.

Lyndon Johnson would have "gotten away with" The Great Society had he not also been forced to deal with Vietnam. Regardless of what we in the US say of that, those programs are very much part of our ...portfolio.

At an ethical level, Americans are much more likely to embrace consumer surplus as a core value, hence the emphasis on work rather than on government. Our "conservatism" when it is coherent is really a more-radical Liberalism in the sense of an emphasis on a self-reliant individual.

yodsanklai• 11 years ago

"Why is socialism such a boogieman in the USA?"

Propaganda I assume. Socialist ideas may be ok as long as the word isn't used.

I guess we need to find a new politically correct word for it because the old one is too pejorative now.

ArkyBeagle4• 11 years ago

"Fragile By Design" does an excellent teasing apart of the small differences between Canadian and American social... consciousness as expressed in government policy. A very surprising book.

The too-short upshot is - Canadians actively consider the social welfare function as a thing in itself, while Americans try to bury it under complicated things like mortgage subsidies.

wozniacki• 11 years ago

  It means that if I'm doing very well for myself, I'll
  give up a bit more than I would've in a strictly 
  capitalist country. Instead of paying 25-30% tax, I'll 
  pay 50%. 

  And that doesn't matter. If I'm earning 300k+ in a year,
  I can miss it.

  In return I know that my life is safe from being 
  destroyed, regardless of social class I'm born in or
  will move to. My parents don't have any money? It doesn't
  matter, education is free. If I have or get some 
  disability, I will be taken care of. If I get injured, I
  will be taken care of. If I get sick, I will be taken 
  care of. By the community.

Here, I'm only referring to the sensible, politically astute contingent of Americans who yet don't warm up to socialism or even high taxation for that matter. I'm not talking about the impulsively right-leaning lot here.

I think such Americans genuinely question if such a smooth trade off - between paying a good chunk more in taxes and a proportionate increase in the standard of living of those on whom that increase in taxation is supposed to benefit - is ever possible in a government that is rife with dysfunction, graft and bewildering inefficiencies at every level. The examples of this present themselves at regular frequencies - say the botched roll out of the healthcare website [1] a few years ago - in the glare of the American media, which don't exactly help either.

Further exacerbating this problem is that bright young Americans [2] don't want to serve in the public sector in similar rates as in Northern Europe.

[1] Obamacare Website Costs Exceed $2 Billion, Study Finds

http://www.bloomberg.com/news/articles/2014-09-24/obamacare-...

[2] 'Pro-Government' Millennials Take Government Jobs, Discover They Suck, Move to the Private Sector

http://reason.com/blog/2014/12/17/millennials-take-governmen...

x5n13• 11 years ago

As far as I recall the Obama Healthcare Website was not developed by the government. It was developed by a private company. The front end was developed by Development Seed and the backend was developed by a multi-national.

That's what I mean about propaganda. To say this is the doing of socialism is pure propaganda.

jpt4• 11 years ago

If I get sick, I will be taken care of. By the community.

Socialism (miniscule s) in the small is charity, forms of which even the most rigid egoist (e.g. Rand) can find ideologically palatable: intentional, contractual communities are communities nonetheless, and generally contain mutual aid clauses. Scale matters, however, and somewhere between 150 and 100 million other persons, the charity co-ordinating entity (i.e. the governing power) becomes a beast unto itself, the contract becomes blurred, and Socialism in the large imposes itself on ideological dissenters with the force of the local violence monopolist.

If nation-states were actually communities caring for their own, the philosophical concerns of consent and compulsion, and the pragmatic concerns of checks and balances, would be much reduced. I await the Maneki Neko experiment that could imbue a society of great magnitude with equally great cohesion.

intopieces• 11 years ago

is ever possible in a government that is rife with dysfunction, graft and bewildering inefficiencies at every level.

This is a fair point, but I think we'd be remiss if we didn't acknowledge the presence of a significant group of politicians in congress who have made their entire careers out of sabotaging government programs. Remember, Republicans have tried to repeal Obamacare at every turn, even taking it to the Supreme Court - twice.

So to say the system can never work because it hasn't worked is confusing the cause for the effect, it seems.

_r5wf2• 11 years ago

Perhaps it is because it is not applicable to most countries. Netherlands has a very strong private industry and a reasonably small population. High tech - high profit Industry can withstand the very high taxes imposed by the government. To me, Netherlands would probably much more prosperous if taxes were lower and Govenment is less socialistic. But, if people are ok with current situation, it is their choice.

It is easy to play socialism where you have strong private industry and/or abundant natural resources with small population. Try that in say, India and you will see the catastrophic results in very short time (In fact, they have recovered by abandoning socialistic policies - https://en.wikipedia.org/wiki/Economy_of_India#Post-liberali... ).

nightcracker6• 11 years ago

To me, [the] Netherlands would probably much more prosperous if taxes were lower and Govenment [sic] is less socialistic.

Who would be more prosperous? The richest 1% would be much richer, yes. The bottom 50% of the population would be a lot worse off: sick and uneducated.

gregsq• 11 years ago

On the other hand, being afraid of all kinds of public ownership is not helpful. I'd bring national development banks into this. They proved themselves to be very efficient in the twentieth century in places that were at the time in need of development, like Singapore and Australia. The UK even mooted one, through Vince Cable, as a means of growth out of the GFC. Didn't fly in the end for pretty obvious reasons. China's just made one, the Asia development bank, and to the chagrin of the US, has been joined by those same countries who from experience, know that they work.

Australia's largest bank, the commonwealth bank, was public, which you can get from the name. It had a trading bank. For development.

abrgr• 11 years ago

Socialism is a "bogeyman" in the US because it has contributed nothing to the success of our country and capitalism and private property, its antithesis, has been responsible for our rise as the greatest economic power the world has ever seen.

Half of the comments on here are extolling Elon Musk and this forum exists precisely because of the advancements of similar private tech pioneers. The Netherlands is a great place and I loved the time I spent there, but no one talks about replicating the inventiveness and penchant for the creation of world-changing technologies of the Netherlands. The US is the innovation capital of the world for a reason.

bakhy• 11 years ago

it's not really that simple. the US had enormous untapped natural resources, and is still well-off in that respect. and the two world wars were not fought on its territory. of course, i do not want to say that's all, the US model is respectable and its success deserves respect. i just don't think it can be completely attributed to anti-socialism, nor that a bit of socialism would destroy it. (which, btw, we can see now, or? US does have a pretty big social apparatus, and is still doing very well.)

eevilspock2• 11 years ago

Have you considered how much American innovation happened as a result of:

- Government programs, the huge military budget, and the once huge space budget (which can be argued was really an extension of the military budget). Can you say for certain that the Internet and would have come about in the U.S. first if it weren't for DARPA? The advancement of computers if it weren't for NASA?

- Non capitalist or profit seeking scientists (Many if not most of whom are funded by the government or philanthropies).

- Luck. The U.S. has an immense natural resources to population ratio, perhaps the highest. It has, at present, virtually limitless land. It doesn't have to worry much about its borders or invasion. Our one border "worry" is actually a benefit to exploitive capitalism: a super cheap black-market labor.

Since you mention "private property", do you realize it is entirely antithetical to free market principles? See https://news.ycombinator.com/item?id=9942313.

Since you mention Elon Musk, could he have achieved what he achieved without $4.9 billion in government subsidies? (http://www.latimes.com/business/la-fi-hy-musk-subsidies-2015...)

I could easily extend this list and make a more powerful argument, but I have work to do. The point I'm really making is to be objective about your analysis of what is behind American innovation and success.

We won't even get into things that we call innovation but have not made the world a better place.

moistgorilla• 11 years ago

The government of almost every country is -almost always- incompetent and inefficient. Why would I want to give them my money for "security" when I could assure myself that security much more effectively?

nightcracker6• 11 years ago

Because we are a civilized society, and this is not about you. A lot of people can _not_ assure that security for themselves.

lujim• 11 years ago

I don't think it's about being a temporarily embarrassed millionaire. I think a lot of people in the US don't care for the treatment they get when they have to deal with federal, state, or local government services. Long lines and extremely rude government employees who abuse bureaucratic power just because they can. Think the USPS (long lines), TSA (rude and unprofessional), state run DMV's (long lines and rude). Many of them are a nightmare to deal with and many people in the US aren't excited about extending that unique brand of terrible service into MORE of our lives.

Also I often hear the argument that many socialist and communist implementations failed due to corruption at the highest levels. I would argue that due to the reliance on central planning (and human central planners) those systems are just way more susceptible to corruption. Is there a single group of humans that has shown itself to be free from the formation of elite classes and corruption? From pre-school to the old folks home power and influence shift between people and they take advantage of it. How would a country ever work past that to implement large scale redistribution of resources through central planners?

TomGullen• 11 years ago

The US Army is the biggest socialist organisation in the US. They provide medical care, educational grants and benefits, housing etc etc.

PopeOfNope8• 11 years ago

"Why is socialism such a boogieman in the USA?"

Because every single time it's been enacted in the past 100 years, it's resulted in the deaths of millions of its own citizenry. Because the very basis of the american legal system and the american legacy (not to mention english common law) is based on individual over collective rights. Socialism is, quite simply, unamerican, by definition.

nightcracker6• 11 years ago

You're going to have to back up those bold claims for them to hold any value.

Also, please do not confuse 'unamerican' for 'bad', and 'american' for 'good'. In fact, I'd argue that the american economic and social system is broken (and thus an 'american' social system does mean a 'bad' system). Your 1% is depriving the 99% of most value.

PopeOfNope8• 11 years ago

  please do not confuse 'unamerican' for 'bad', and 'american' for 'good'

That's your own projection, not mine. I clearly stated in my comment that socialism was unamerican because it goes against the founding principles of the country.

I don't deny the current system is broken. It has been for a long, long time. But, if you think socialism is the solution, you haven't been paying attention to history. Socialism always results in tyranny. It did in Russia. It did in China. Vietnam. Korea. Even the Nordic countries, who had the best chance of pulling it off, have started to suffer under its weight.

dispossess• 11 years ago

I'd argue that a primary misfeature of the US system, crony capitalism, is actually the result of socialism. Crony capitalism only works if you have enough government spending and control to make that sort of corruption profitable.

PopeOfNope8• 11 years ago

Excellent point.

bsbechtel• 11 years ago

I wish there was a mainstream medium that discussed (and made accessible) the real risks and benefits of policy ideas. The biggest policy decisions our government makes are more or less discussed and debated through anecdotal stories shared in op-ed pages of major newspapers. (Note: I'm talking about policies pushed by both sides of the aisle, not just this particular op-ed.) This seems to be the biggest driver of polarization in the political sphere, as individuals tend to seek out op-eds that reinforce their own views in an exercise of confirmation bias, instead of thinking critically about what the positive and negative effects, plus potential risks, would be.

Personally, I tend to default to looking for free market/libertarian solutions to societal problems based on two major risks. First, if the government fails to deliver the good or service promised (like energy for your home, or healthcare), you normally have no other alternative to choose from. This can cause an entire population to suffer greatly, especially given the government is most often tasked to providing fundamental goods and services most necessary for human life (water, energy, healthcare). Second, choosing your government to provide a solution for you is fundamentally saying that 1 (non)elected government official can offer a better solution than ~330 million other individuals (in the US). Statistically this is highly unlikely, even considering the advantage of coercive power the government-provided solution possesses. I'm not opposed to government control over productive capital in some arenas, but any policy idea needs to mitigate and address these two fundamental risks. Very few policy proposals pass this test, and no mainstream media source exists to provide an objective risk analysis of the ideas and policies being debated by our elected officials.

PauloManrique• 11 years ago

Why people insist in say "I live in a socialist country" when they clearly does not live in one?

Welfare State has nothing to do with socialism

Socialism, American-Style

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