As discussed in my last post, America's economic system of lightly-regulated capitalism has produced a nation of highly-productive people who are cheated out of the benefits of all their hard work. Compared to working people in other leading industrialized countries, Americans are poorly compensated, have poor health care and bleak prospects for security in retirement. They are furthermore victims of irresponsible, rapacious corporations whose unlimited power to lobby and shape government results in environmental disaster and economic catastrophes like the Great Recession.
So what's the alternative? A recent poll shows that four in ten Americans would prefer living in a socialist nation to a capitalist one. "Socialism" means a lot of different things to people. But in the United States, a lot of people are latching on to a set of ideas known as democratic socialism. Or rather, I should say, they are latching on to the term democratic socialism. Even its biggest supporters aren't very precise on what democratic socialism actually is.
Senator Bernie Sanders of Vermont is America's best known proponent of democratic socialism. Earlier this month, Sanders sought to distinguish himself from the two dozen or so other candidates for the Democratic Presidential nomination in 2020 by giving a speech that would define his principles as a democratic socialist. From Tara Volshan of Vox.com:
"Four months into his second presidential campaign, Sanders took the stage at George Washington University to make his clearest case for democratic socialism." Sanders called, "for an economic bill of rights: for health care, affordable housing, racial equality, a clean environment, and a living wage."
Sanders' speech elicited several different responses from Democrats and other folks on the left. The podcasters of Pod Save America commented that the speech was an enthusiastic defense of all the ideas espoused in Franklin Roosevelt's New Deal, particularly FDR's Economic Bill of Rights. That's just fine, Pod Save America pointed out, but the Sanders campaign made clear this was to be a speech about democratic socialism, not the continued relevance of the New Deal, and if there's anybody who should be able to make clear the distinction between those two sets of ideas, you'd think it would be Bernie Sanders. It used to be that Sanders supported the idea of nationalizing major industries, including energy companies, factories and banks. That vision is dramatically different from New Deal liberalism, and one that meets many conventional definitions of socialism. But Sanders no longer advocates for nationalization.
After Bernie Sanders, certainly the best-known proponent of democratic socialism is superstar freshman Democratic congresswomen Alexandria Ocasio-Cortez of New York. Perhaps she can help un-muddy the waters? In a recent interview with Nisha Stickles and Barbara Corbellini Duarte of Business Insider, the authors reported:
"Ocasio-Cortez has likened her view of democratic socialism to Scandinavian social democracy. The congresswoman's progressive platform consists of a single-payer health care system that covers all forms of health care.
"We're talking about single-payer health care that has already been successful in many different models, from Finland to Canada to the UK," she said.
Ocasio-Cortez, who is still paying off her student loans, also believes in tuition-free public colleges and universities. Her platform includes guaranteeing Americans a living wage that maintains "basic levels of dignity so that no person in America is too poor to live," Ocasio-Cortez said."
But again, public health care, a living wage guarantee and free adult education were all parts of the New Deal. For help on the definition of democratic socialism and what differentiates it from what Presidents FDR and Truman advocated decades ago, let's turn to Maggie Astor of the New York Times: "If we use the standard definition, democratic socialists don’t support capitalism: They want workers to control the means of production. In social democracies, by contrast, the economy continues to operate "on terms that are set by the capitalist class," Maria Svart, national director of the Democratic Socialists of America, told The Times last year. "Our ultimate goal really is for working people to run our society and run our workplaces and our economies." According to Astor, that would put democratic socialism to the left of "social democracy", common to the leading nations of Europe. Social democracy, says Astor, "preserves capitalism, but with stricter regulations and government programs to distribute resources more evenly."
Okay, now we're getting somewhere. So what does it mean in practical terms for people, rather than capitalists, to run our society and workplaces? Heading over to the Democratic Socialists of America web site, I see that:
"Social ownership could take many forms, such as worker-owned cooperatives or publicly owned enterprises managed by workers and consumer representatives. Democratic socialists favor as much decentralization as possible. While the large concentrations of capital in industries such as energy and steel may necessitate some form of state ownership, many consumer-goods industries might be best run as cooperatives.
Democratic socialists have long rejected the belief that the whole economy should be centrally planned. While we believe that democratic planning can shape major social investments like mass transit, housing, and energy, market mechanisms are needed to determine the demand for many consumer goods."
So if I can summarize: Democratic socialism is in most respects identical to the economic and social guarantees of the New Deal. That is:
* Everyone able to work has access to employment paying a living wage.
* All persons have a right to food, clothing, housing, education, medical care and social security.
* Freedom from unfair competition and monopolies, and price supports for farmers.
* National investment in transportation and energy infrastructure.
* Environmental protection.
The key difference between New Deal liberalism and democratic socialism: The New Deal emphasized unionization enabling workers to collectively bargain with private employers, while democratic socialism promotes employee-owned businesses and employee and consumer-controlled cooperatives.
So I guess your author is a democratic socialist too. I support emolyee-owned businesses, or unions, or pretty much anything that will break the cycle of people working full-time and still living in poverty.
Next time I'll cover the reaction of some folks on the right and on the mainstream left to democratic socialism. Spolier: They don't like it.
Sunday, June 23, 2019
Wednesday, June 12, 2019
Adventures in Late-Stage Capitalism #1: Juicero Versus the Working Poor
Welcome to a new series on politics and economy in America. Today we'll begin discussing the big questions: Can our dysfunctional society survive? Are jobs disappearing? Is American capitalism going to be replaced with something else? If so, what might come next?
As a brief introduction, I'd like to ruminate on two anecdotes that I think shed light on what's gone wrong in this country.
I. Juicero!
Like juice? Well, you could squeeze packets of fresh juice into a glass. Or, thanks to the Juicero company, you could spend $700 for a machine to squeeze the packets, somewhat more slowly than you could squeeze them yourself. The Juicero machine, an engineering marvel consisting of four hundred of custom-machined parts, apparently cost more than $1,000 to produce, but the company sold them at a loss figuring to make up the deficit by selling you a lot of expensive juice.
My point here is that savvy investors calculated that the Juicero was such a good idea, they backed it with $120 million in venture capital. In other words they were betting on the idea that so many affluent Americans had so much money to burn, they could turn a profit on a system based around a superfluous $700 bag squeezer. And until journalists exposed the Juicero for what it really was (in a sort of "The Emperor has no clothes" moment so embarrassing that the company withdrew the product) those investors were actually correct - the very wealthy in America really do have that much money to burn.
Meanwhile...
II. Work for America's largest and most profitable corporations... and go on welfare.
Here's an excerpt from a post I wrote in 2015 about minimum wage and working in America:
"In late 2013, Nancy Salgado, a 27-year-old mother of two and employee of McDonald's made news for protesting the poor wages paid by her employer. After 10 years at McDonald's, she was making only $8.25 per hour, significantly below the poverty line for three people. Incredibly, the response by McDonald's to the inquiries of employees seeking information on making ends meet was to suggest that they apply for welfare. From Emily Cohn of the Huffington Post:
"McDonald's workers struggling to get by on poverty wages should apply for food stamps and Medicaid. That's the advice one activist McDonald's worker received when she called the company's "McResource Line," a service provided to McDonald's workers who need help with issues like child and health care."You can ask about things like food pantries. Are you on SNAP? SNAP is Supplemental Nutritional Assistance [Program] -- food stamps ... You would most likely be eligible for SNAP benefits," a McResource representative told 27-year-old Nancy Salgado, who works at a Chicago McDonald's. "Did you try and get on Medicaid? Medicaid is a federal program. It's health coverage for low income or no income adults -- and children.""
My reaction to this article was simple enough: McDonald's, a corporation that makes around $6 billion dollars per year in profits, should pay Ms. Salgado a living wage. Furthermore, it's wrong for large profitable companies to expect the taxpayers to subsidize their employees in the form of welfare benefits."
Some facts about American workers: We are among the hardest working and most productive in the world. Yet we live in the only leading industrialized nation that does not mandate universal health insurance, and also does not guarantee workers paid holidays, vacation and sick and maternity leave. One in nine U.S. workers are paid wages that can leave them in poverty, even when working full time.
A recent "Quality of Life" study conducted through the University of Pennsylvania compared leading nations according to essential ideas of broad access to food, housing, quality education, health care, employment and job security, political stability, individual freedom and environmental quality. This study found quality of life is better than that of the United States in twelve European countries as well as Canada, Japan, Australia and New Zealand.
What do these facts mean (beyond confirming that American workers are getting screwed)? Well, we as Americans have been taught since time out of memory that free-market capitalism is good, and that anything that falls under the rough heading of "socialism" is bad. But compared to other leading nations, one conclusion about life in the United States is inescapable: Our national economy is less centrally-managed and less socialized than other countries, but in every measurable sense our economic and political systems return poorer results than those same countries. And if Americans are hard-working and productive, and they're getting a raw deal, shouldn't we expect things to change?
As a brief introduction, I'd like to ruminate on two anecdotes that I think shed light on what's gone wrong in this country.
I. Juicero!
Like juice? Well, you could squeeze packets of fresh juice into a glass. Or, thanks to the Juicero company, you could spend $700 for a machine to squeeze the packets, somewhat more slowly than you could squeeze them yourself. The Juicero machine, an engineering marvel consisting of four hundred of custom-machined parts, apparently cost more than $1,000 to produce, but the company sold them at a loss figuring to make up the deficit by selling you a lot of expensive juice.
My point here is that savvy investors calculated that the Juicero was such a good idea, they backed it with $120 million in venture capital. In other words they were betting on the idea that so many affluent Americans had so much money to burn, they could turn a profit on a system based around a superfluous $700 bag squeezer. And until journalists exposed the Juicero for what it really was (in a sort of "The Emperor has no clothes" moment so embarrassing that the company withdrew the product) those investors were actually correct - the very wealthy in America really do have that much money to burn.
Meanwhile...
II. Work for America's largest and most profitable corporations... and go on welfare.
Here's an excerpt from a post I wrote in 2015 about minimum wage and working in America:
"In late 2013, Nancy Salgado, a 27-year-old mother of two and employee of McDonald's made news for protesting the poor wages paid by her employer. After 10 years at McDonald's, she was making only $8.25 per hour, significantly below the poverty line for three people. Incredibly, the response by McDonald's to the inquiries of employees seeking information on making ends meet was to suggest that they apply for welfare. From Emily Cohn of the Huffington Post:
"McDonald's workers struggling to get by on poverty wages should apply for food stamps and Medicaid. That's the advice one activist McDonald's worker received when she called the company's "McResource Line," a service provided to McDonald's workers who need help with issues like child and health care."You can ask about things like food pantries. Are you on SNAP? SNAP is Supplemental Nutritional Assistance [Program] -- food stamps ... You would most likely be eligible for SNAP benefits," a McResource representative told 27-year-old Nancy Salgado, who works at a Chicago McDonald's. "Did you try and get on Medicaid? Medicaid is a federal program. It's health coverage for low income or no income adults -- and children.""
My reaction to this article was simple enough: McDonald's, a corporation that makes around $6 billion dollars per year in profits, should pay Ms. Salgado a living wage. Furthermore, it's wrong for large profitable companies to expect the taxpayers to subsidize their employees in the form of welfare benefits."
Some facts about American workers: We are among the hardest working and most productive in the world. Yet we live in the only leading industrialized nation that does not mandate universal health insurance, and also does not guarantee workers paid holidays, vacation and sick and maternity leave. One in nine U.S. workers are paid wages that can leave them in poverty, even when working full time.
A recent "Quality of Life" study conducted through the University of Pennsylvania compared leading nations according to essential ideas of broad access to food, housing, quality education, health care, employment and job security, political stability, individual freedom and environmental quality. This study found quality of life is better than that of the United States in twelve European countries as well as Canada, Japan, Australia and New Zealand.
What do these facts mean (beyond confirming that American workers are getting screwed)? Well, we as Americans have been taught since time out of memory that free-market capitalism is good, and that anything that falls under the rough heading of "socialism" is bad. But compared to other leading nations, one conclusion about life in the United States is inescapable: Our national economy is less centrally-managed and less socialized than other countries, but in every measurable sense our economic and political systems return poorer results than those same countries. And if Americans are hard-working and productive, and they're getting a raw deal, shouldn't we expect things to change?
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