Democratic Socialism Part Two

Welcome friends!

Funny how often this sort of thing seems to happen but as soon as I finished my post on democratic socialism a couple of years ago now (Democratic Socialism, February 2, 2016) I ran across an example of exactly what I was talking about.  I didn’t want to do a follow-up at the time but I made a note of it so maybe I’ll just do it now.  If you recall in my earlier post I discussed how the word “socialism” is a big red flag for conservatives even though it’s rather obvious they generally have in mind something rather different from what anyone who might actually describe himself or herself as a “democratic socialist” (such as Democratic presidential candidate Bernie Sanders) has in mind by the term.  Indeed I suggested what some conservatives have in mind when they talk about socialism appears rather different from what some other conservatives have in mind by the term.  It can all get pretty confusing.  Lots of opportunities to equivocate on terminology and make other sorts of logical errors.  Of course from a rhetorical standpoint I suppose that may be the whole point.  If there’s anything any conservative intellectual worth his or her salt knows how to do it’s muddy the water and obscure the truth.  Some conservatives are clearly of an Ayn Randian temperament and see incipient socialism in the most mundane and hence surprising of places.  You know the sort of people I have in mind.  How dare anyone tell me to stop my car for a red light!  Oh the humanity!  I stop for green lights!  Other conservatives particularly of the economic sort spend a great deal of time talking about maximizing social welfare and so on, which certainly sounds a lot like some form of socialism broadly conceived.  One suspects they don’t really mean it and are just dabbling in rhetoric but the point is those conservatives tend to reserve the despised socialist epithet for those who disagree with them on means rather than ends or anyway what they prefer for one reason or another to represent as their ends.  Well shortly after I wrote that piece I read a short item by President and CEO of the US Chamber of Commerce, Thomas Donahue, on Mr. Sanders’s victory in the New Hampshire presidential primary.  I hope I’m not giving the game away but basically I found what he had to say simplistic, misleading, and at times just plain wrong.  As perfect an example of conservative political / economic rhetoric as one might hope to encounter.  Anyway, it’s a short piece so I thought I’d just break it down point by point and let that be my post for this week.

Mr. Donahue started by stating “Socialism is a wrong and dangerous path for America.”  As he didn’t waste any time defining what he meant by “socialism” one can’t help but wonder what he might have had in mind.  I mentioned before the most fundamental definition of socialism is simply the proposition what happens to other people, that is to say one’s society, matters.  The opposing position to this most fundamental concept of socialism is there’s no such thing as society or anyway nothing of the sort we need think or care about so if for example some people who happen to be living around the space you inhabit drop dead because let’s say they don’t have jobs or food or medical care or what have you then that’s entirely their business and none of your own.  If that’s what he has in mind, socialism as the proposition one should care about what happens to the other people living in one’s society, then I suppose it’s fine with me if his opinion is it’s ethically “wrong” but I wouldn’t say he made a particularly strong case as opposed to having simply registered an opinion on the matter.  I for one certainly wouldn’t agree it’s ethically wrong and in fact I would suggest it’s probably the only ethically acceptable way for humanity to proceed.

On the other hand the allusion to danger makes me suspect he might have a rather different definition of socialism in mind.  Personally I’ve never found anything particularly dangerous or alarming about people being concerned for other people although I understand the Ayn Randian perspective on the phenomenon is once one starts down that path it can’t be long before someone is cooling his or her heels in a Russian gulag in Siberia.  Of course there are non-democratic version of “socialism” variously defined that might appear dangerous to most reasonable people for example something along the lines of the right wing anti-democratic “National Socialism” of mid-twentieth century Germany or perhaps the authoritarian left wing anti-democratic communism of the Union of Soviet “Socialist” Republics.  And of course here in the USA we do have a healthy subculture of Neo-Nazis and fascist sympathizers who have been in the news recently because of their rapturous and fanatical support for Donald Trump and the Republican Party.  I haven’t heard of any comparable underground of authoritarian communists but it’s a big country so what do I know.  However, those sorts of anti-democratic extremists have precious little do with the democratic socialism endorsed by Mr. Sanders as Mr. Donahue surely understands all too well.  A more relevant model would be the sort of democratic socialism one sees in contemporary Europe.  I have to say I’ve never thought of the countries involved as particularly dangerous compared to the USA although it is quite common to hear conservatives raise the specter of Europe as some sort of bogeyman so perhaps he did have the frightening aspect of Scandinavian hygge in mind.  Who knows?  My point is simply it’s rather difficult to make head or tails about what he might have been talking about in that sentence.

He carries on with the observation, “It’s failed everywhere it’s ever been tried, bringing shared misery rather than shared prosperity.”  The first bit is rather comical for those who believe the phrase “democratic socialism” is a reasonable description of a good portion of what we have been doing here in the USA for many years and which our conservative friends rail against on a frequent basis.  I’m talking about social welfare programs like Social Security, Medicare, worker safety regulations, etc.  Even more to the point is what our friends in Western Europe have been doing this past century or so often invoking very explicitly the mantle of democratic socialism.  Indeed, if one wants to think about economic systems that have failed everywhere they’ve been tried one of the main systems must be the sort of simple minded free market capitalism one infers Mr. Donahue prefers.  Both the USA and many countries in Europe and indeed around the globe gave that a go in the latter part of the nineteenth century and the early years of the twentieth century and it didn’t really work out all very well.  Some people did just fine and then some but of course some other people tanked, we ended up with all manner of funny labor market issues and social unrest, the economic system itself become unstable and eventually stalled out entirely and no one had any ideas of how to get it going again, nations imploded, authoritarian populist crackpots proliferated, and after many years of toil, hardship, and bloodshed we eventually got to the democratic socialist systems we have now.  I don’t really relish the idea of going back and doing it all again, do you?  Because I’m pretty sure that’s what conservatives like Mr. Donahue have in mind.  

The latter part of Mr. Donahue’s sentence about shared misery gets to the conservative penchant for associating sharing exclusively with misery and never with shared prosperity.  According to conservatives prosperity is the rightful domain of a relatively small number of people in the wealthy elite and any suggestion anyone else might benefit from economic development must necessarily backfire.  Yes, we’re back in the Ayn Randian realm of every person for himself or herself.  Again, opinion noted, but nothing there that would make me suspect his conclusions were based on anything I might find convincing.  As far as I know we had a much more equitable distribution of resources in this country a few decades ago when we had a stronger unionized work force and more reasonable pay for top management as well as a reasonably progressive tax code and inheritance taxes and so on but I don’t really remember people being noticeably more miserable in general than they are now.   Of course I was young then so maybe I just wasn’t paying attention but still I’d like to see some data or information to back that claim up.  I suspect it’s something Mr. Donahue just made up on the spot.  And of course there’s nothing in economic theory suggesting altering distributions brings misery to all, as Mr. Krankepanzen takes some time to establish in the You Tube video series I mentioned in my last post.

Mr. Donahue then hits us over the head with the following litany of issues: “It [socialism] undermines personal initiative and responsibility, stunts innovation and growth, makes people serve government—not vice-versa—and robs individuals of the dignity of earning their own success and charting their own course.”  OMG!  One at a time, please.

I’ve mentioned before I agree incentives are important but I would suggest market systems themselves can generate some pretty peculiar incentives at times and I would suggest further there’s plenty of room for the more helpful sort of incentives to operate even if we pay a bit more attention to social fairness than we have been doing recently.  Indeed I wouldn’t be surprised at all if we could improve on the incentives a bit by linking outputs more to laudable behaviors and not accidents of birth and happenstance.  Anyway, it seems clearly not the all or nothing proposition Mr. Donahue suggests.  So that misses the mark for me.

As far as stunting innovation I’m not sure Mr. Donahue knows what he’s talking about.  From what I’ve read technical innovation has often come from the sort of big government involvement Mr. Donahue and his ilk spend so much time fretting about.  Indeed quite frequently technical innovations have had their start in the realm of national defense.  Internet ring any bells?  But no reason to get all technical about it.  Perhaps it’s enough to say that with democratic socialism we’re talking about harnessing the power of the market while paying attention to distributional concerns not setting up a Stalin era ten-year plan or whatever.

Moving on we then have the notion socialism is all about people “serving” government rather than the other way around.  Again, I don’t really know what that’s about.  The USSR perhaps?  Because I don’t think that’s what anyone discussing democratic socialism is talking about.  As far as I understand it democratic socialism is about government serving people by addressing distributional concerns and regulating markets so everyone gets a fair shake.  The notion that socialism involves becoming a slave to government sounds like a bit of a straw man to me.  And while we’re on the subject I’m not at all sure the flip side, government serving people, is very consistent with the conservative vision in which government activity beyond defending the property rights of rich folk and enforcing contracts and so on is presented as invariably unnecessary and counter-productive.  Well, I suppose if you equate serving society with doing nothing to help anyone who isn’t part of the wealthy elite then maybe but otherwise no.

Then we have the idea if we make things more equitable we will “rob individuals of the dignity of earning their own success and charting their own course.”  The idea here is there is that under our current system individuals do whatever they like and earn their own success but in some hypothetical democratic socialism scenario they would not.  Sounds a bit looney tunes to me.  I’m not sure what sort of system Mr. Donahue has in mind but I would suggest all real democratic socialists support variations of financial success within reasonable limits perhaps to accommodate monetary incentives so I don’t see why people would be unable to earn their own success even if we paid a bit more attention to distributional issues.  Indeed if we’re going to talk that way there seem to me a great many financially successful people today who certainly have loads of dignity but whose role in their own success seems to me a bit murky, such as people who inherit a boatload of money, people who had a privileged upbringing or who were set up by their parents, people who happened to be born with some unusual talent or ability, people of average ability and habits who were in the right place at the right time, and so on.  At the same time other people with loads of personal merit may find themselves struggling financially for any number of reasons.  In other words, I suspect if we changed things around a bit we might find a heck of a lot more dignity from earning success floating around.  Ditto for people being able to chart their own course.  This gets to a peculiar feature of conservative ideology in which the practical constraints we all face in a market economy are made to appear different in nature from the practical constraints that might appear if we changed anything about the market such as for example trying to make the results more equitable.  We have practical constraints now.  We’ll have practical constraints in the future.  Again, I suspect if we paid a bit more attention to distributional issues a great many more people might find they are able to chart their own course in a practical sense than is the case now in which some people find themselves able to chart courses all over the place while others seem unable to even exit the harbor.

He then quotes approvingly one of the bon mots of the always beloved by conservatives Margaret Thatcher, aka the Iron Lady, that the problem with socialism is you eventually run out of other people’s money.  Since we’re not really talking about distributing a set sum of money that’s liable to run out one presumes she must have been referencing the conservative belief that any change whatsoever to our distributional system will cause such havoc all further economic activity will grind to a halt.  Doesn’t sound very plausible to me.  Nothing in economic theory would suggest addressing distributional issues would cause economic activity to cease.  Even in terms of changes in total output setting aside distributional issues such as the number of people living in the woods behind the old convenience store, which one supposes a conservative like Ms. Thatcher would waste little time thinking about, the argument is rather weak.  Nothing to suggest total output would necessarily decline if we address distributional issues.  Indeed I wrote some time ago about a Nobel prize winning economist who argued adjusting our distributional system to make it more equitable would likely lead to a more robust consumer demand and thus greater economic growth.

Mr. Donahue concludes by encouraging Americans to reject this “failed, antiquated, and discredited economic system.”  Again, I have to say it’s just not really very clear to me what system he’s talking about.  Democratic socialism is very successful, current, and popular.  Many democratic nations pay much greater attention to social matters and distributional concerns than we do here in the USA and they tend to rank more highly than the USA along any number of quality of life dimensions.  Indeed, the surprising thing to me for many years now has been how the USA manages to rank so low in various quality of life rankings despite our impressive total economic output, which is of course the true legacy of conservative ideology in which only total output is recognized as relevant to economic wellbeing and where all that output goes is meant to not really matter.  It’s why the average citizen of the USA is so much worse off than the average citizen of so many other countries across the globe.

Well, OK, he had one more thought, which is there’s no place for democratic socialism “in a country that strives to be free, prosperous, and always looking to the future.”  Fine with me if that’s his opinion but in my opinion there’s definitely a place for it.  Indeed I would suggest if we want freedom and prosperity to flourish and to benefit everyone in our society rather than a select few then some form of democratic socialism is really the only way to go.  If we’re looking to the future I can’t help but suppose that’s where we’ll be one day.

Anyway, that’s the sort of thing democratic socialists are up against in this country.  I know it would be easier and indeed more traditional for us here in America to just talk about the policies in question without mentioning the dreaded s word at all, which would accomplish the same ends and give Mr. Donahue and his ilk less of an opening to wax idiotical but must we really remain so childish?  Can we begin to use words the way reasonable people in other countries have been using them for many years?  Can we stand up and declare like Harry Potter we’re not afraid of a name?  If we talked a bit more about socialism and what the term means to different people we might improve the quality of our conversation on important issues like distributional issues.  So let’s get to it.  Democratic socialism, democratic socialism, democratic socialism.  There I’ve said it.  So hard to discuss things when one fears saying the wrong word might make the bogeyman emerge from under one’s bed so let’s stop doing it shall we?  

References

Donohue: My Thoughts on Senator Sanders’ Victory in the New Hampshire Primary.  Thomas J. Donahue.  February 10, 2015.  https://www.uschamber.com/above-the-fold/donohue-my-thoughts-senator-sanders-victory-the-new-hampshire-primary?utm_source=Outbrain&utm_medium=Wallpost&utm_campaign=Status

Hansel Krankepantzen Nails It

Welcome friends!  

I’ve been away the past few weeks but I’m back and ready to resume my battle against the rampaging multi-headed beast of international conservatism.  Anything been happening since I’ve been away?  Just more of the same you say?  Yeah, that’s what I thought.  Time goes by so slowly sometimes doesn’t it?  Well here’s something new and fun.  I was checking out You Tube the other day just to see if that do-it-yourself video venue had begun to feature any serious economic, social, or philosophical content of any sort.  I read somewhere young people don’t read much and of course some older adults never have so I wondered if do-it-yourself video might be becoming a serious form of intellectual expression.  I didn’t really expect much beyond the inevitable dancing cats, people falling over, and that sort of thing, but seems it’s evolved a bit beyond that.  Indeed, I did manage to uncover a few videos dealing with economic and social issues although they were mostly in what I would consider the elementary to sophomoric range.  On the other hand, I did run across a rather lengthy video by a fellow named Hansel Krankepantzen that dealt with economic theory and distributional issues in very much the same vein as I’ve talked about them here for several years so that was somewhat interesting.  If I’m being honest I couldn’t have said it better myself.  I know I talk a lot about economic issues and I really need to spend a bit more time on other elements of the liberal or progressive humanist agenda but maybe this time I’ll just do a quick summary of some of Mr. Krankepantzen’s main points to get that out of my system for now.  

One important point he made was that the ostensible goal of neoclassical welfare economic theory, maximizing utility, is ethically implausible or at least highly controversial if one considers the word “utility” to refer to something that actually exists such as for example subjective perceptions of happiness or that sort of thing.  Mr. Krankepantzen does a little thought experiment where he draws out the implications of maximizing utility under that interpretation of utility to establish that point.  Nailed it as young people might say.  That leads to the alternative interpretation of the word “utility” in which it refers to nothing really but becomes simply a word economists have gotten into the habit of using to express some unrelated and rather less controversial ethical propositions and goals.  Interesting stuff because of course in that case there’s no reason in the world economists should continue to express themselves using the word unless they’re basically trying to mislead people in some way.  

Another good point he made was when one goes looking for the value or ethical propositions that function as assumptions into economic theory in order to evaluate the conclusions relating to socially optimal outcomes and so on one can’t just look at just the propositions expressed or associated with the word “utility.”  Economic theory also involves some other ad-hoc value propositions that seem to come out of nowhere one must consider as well.  One example he provided was the implicit prohibition within economic theory against considering the utility of second parties who may have opinions, preferences, or desires about what other people are doing.  My goodness what a mess we’d be in if we included utility from that source right?  Goodbye revealed preference.  But why should utility from that source not matter?  Why indeed.  And then of course we have the property rights required to set up any sort of market system.  No real justification for that in terms of utility either.  Criminals and would-be criminals are people too but apparently their utility is no good here.  No worries.  Tack it on to the rest of the miscellaneous value propositions.  As I’m writing this it occurs to me another one he probably should have included but did not was the notion that utility associated with relative economic power or rank doesn’t count either.  If that were the case we could throw so-called Pareto Optimality upon which much of modern welfare theory rests out the window.  If it’s been a while that’s the bit that assumes if a change makes at least one person better off and no one worse off we know we must be increasing utility and hence improving social welfare.  It’s how you get to perfectly competitive markets being optimal once you take out distributional issues or perhaps that should be other distributional issues.

The final few sections of the video address some common ways people misstate or misrepresent what economic theory actually says.  For example, the idea we should consider “economic efficiency” and hence adopting a perfectly competitive market structure a sort of global objective because once we get to any such market outcome we can address any distributional issues as a sort of second step never diverging from economic efficiency, which he compares to finding the mythical unicorn in one memorable sequence.  Another example is the idea that policies addressing distributional concerns introduce “inefficiencies” or “distortions” that inevitably make everyone worse off as well as the idea that if one is neutral on distributional issues one should oppose any attempt to change them.  Good stuff.

The conclusion of Mr. Krankepantzen’s little lecture will be familiar to everyone who really understands neoclassical economic theory but may come as a bit of a shock for those who think they do but don’t.  The theory of welfare economics with its recommendation we adopt perfectively competitive market structures to arrive at socially optimal results is fine and dandy if one sees no distributional concerns with the results but it’s totally irrelevant if one does.  It doesn’t establish we should ignore distributional concerns because addressing them would interfere with the free market or create distortions or economic inefficiencies that would make everyone worse off.  If only economists could learn to talk straight we wouldn’t need people like Mr. Krankepantzen to clear these issues up in funny You Tube videos but, of course, one head of the conservative monster, economic conservatism, has long been heavily involved with economic theory and academic economics, and we all know or should know by now how conservatives at all levels of education treat intellectual discourse as merely a rhetorical tool to get what they want, so I suppose it should come as no surprise at all many economists are every bit as committed to intellectual dishonesty and doubletalk as their conservative admirers and patrons.  So I suppose funny You Tube videos it is.  And my blog of course.  Can’t forget that.