“Socialism” doesn’t work

Socialism does work, of course.  All you have to do is look at the bloc of democratic socialist countries in northern Europe and you can see it for yourself.  In fact, even “socialism”—i.e., the word “socialism” works in Europe.  It is not argued for.  It is taken for granted by both liberals and conservatives.

But it has never meant in the United States what it means in most of the rest of the world and I think it is time to stop trying.  Those of us who are fans of the extensive (expensive, too) social programs in western Europe need to give up on the word and try something else.

I have a candidate.  “Civic Capitalism.”

For the rest of this essay, I would like to argue that this is a good name and that we ought to start using it.  In fact, if we are really serious about it, we should hire Frank Lunz, on of the most successful word-sculptors of our time, to do the job.  Lunz was the one who changed the designation “estate tax” to “death tax.”  Imagine that.  He changed the question from what the tax is on to when you pay the tax.  When he was done, it sounded like a tax on dying.  He’s the guy we need to sell the name Civic Capitalism.

What’s good about the new name?

I’ve already demonstrated what is bad with the old name.  Republicans have made it the rough equal to Soviet-style communism.  Thanks to them, policies that move in the direction of a more efficient sharing of national resources work like a poster that says, “Stalin for President!.”

So mainstream politicians cannot come out for “socialism,” even if that is what they mean.  Of course, a lot of people are willing to come out in favor of “capitalism,” but commonly, that means, “the system we now have.”  It is not the system we now have.  What we have has been wittily called “capitalism for the rich and free enterprise for the poor.”  What is most insightful about that witticism is that people who have amassed power are unwilling to allow the market to work its magic.  They want to rig the conditions governing the production and distribution of goods and services so that they favor their own enterprises and not those of others.

There are two ways to sell the virtues of capitalism.  The outside one—the systemic one—is that supply and demand will act on each other so that each is held in check.  When you overproduce, the price goes down until you have to quit and then the market rebalances itself.  When you overprice, consumption goes down until the price comes back into balance.  It’s magic! Or, as Adam Smith said, it is “the invisible hand,” meaning that God actually controlled market dynamics.

The other way is to call it “free enterprise.”  Free enterprise is a way of arguing that government has no legitimate business “interfering” with the market.  It is an anti-regulatory approach that doesn’t even bother to ask what the purpose of the regulation is or what the outcome will be if there is none.  It is what laissez nous faire actually means.

But don’t you have to ask, at some point, why anyone would want to regulate an economy that worked for the welfare of all?  I would.  And do we really want to say that we elect legitimate governments to protect us from the depredations of foreign governments but not from the depredations of domestic corporations?  I don’t.

Which brings us to civic capitalism.  Capitalism is the most successful wealth-creation regime ever invented.  The firms that benefit most from it have no obligation to their workers, except so far as government regulations and protections go, and virtually unrestricted obligation to reward their principal owners.  Further, they have no ability to exercise care for the economic system as a whole.  And no reason to.

Nothing in that description, you notice has anything to do with the owners and workers in their civic capacity.  It has nothing to do, that is, with citizens.  That is the additional focus provided by what appears in my title as an adjective; it is “civic” capitalism.  That is the kind of capitalism it is.  It is not socialism in any way.  It is capitalism that exercises an active and competent regard for the welfare of the citizens of the nation.

Since there is no way for the firms the make up the heart of the economic system to do that (even if they wanted to), it is a job that should be undertaken by the government that citizens choose and that government should put the welfare of the citizens first.  That’s the deal.  The capitalist economy is free to provide as much wealth as it can provided that the government has access to as much of that wealth as is needed to support a certain kind of life for its citizens.

There is no way to produce the resources without capitalism.  There is no way to redistribute it adequately without government.  

And the basis on which each American receives these resources is that they are a citizen.  “Being an American” in this sense of the term means that you have a claim to some share in the national wealth.  You could call it a “citizenship stipend” if you had to call it something. [1] This share supports your ability to be active on your own behalf and to support [2] the political economic cooperation that makes the system work.

“The national wealth,” which I mentioned in the previous paragraph, is the share of resources produced that belongs to the government for the purpose of sustaining the welfare of the society.  Substantially higher levels of taxation will be required for that, of course, but there is no other source of the money needed to support the system.  We tax the rich for the same reason Willie Sutton paid the bulk of his attention to banks.  It’s where the money is.

Civic capitalism is society-supporting capitalism.  It is sustainable capitalism.  It does not seek an equalization of resources.  People who have natural advantages and who are lucky or who outwork their peers are going to wind up with more money, as they should.  Everyone who works hard and succeeds will be better off economically than anyone who does not work hard and/or does not succeed.

But these successful people will have advantages no successful person now has.  These people will be free to live in a society where the most brutally toxic social ills have been addressed.  The poor can house themselves and the hungry can feed themselves and the ill can get access to medical treatment because the society as a whole has decided that support is owed to citizens just because they are citizens.

Conclusion

I could go on.  I almost did.  Then I remembered that the announced goal of this essay is to propose “civic capitalism” as the term Americans should use to refer to the political/economic system that Europeans call democratic socialism.  I have proposed the term and described what I mean by it.  I have given the rudiments of the case that can be made for it.  So I think I will pause for a little while.

[1]  And you should call it something because its enemies will call it “the dole” if you don’t.  Or even if you do.

[2] In a republic, that means “require your elected leaders to support…”