Posts Tagged ‘socialism’

Capitalism Is Dying

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A specter is haunting the United States—the specter of Medicare for All. All the powers of old America have entered into a holy alliance to exorcise this specter: Wall Street and Big Pharma, Trump and McConnell, Fox News and the American Enterprise Institute.

Now, “coincident with the 200th anniversary of Karl Marx’s birth—and, more important, on the cusp of the 2018 elections—the Council of Economic Advisers has joined the alliance:

socialism is making a comeback in American political discourse. Detailed policy proposals from self-declared socialists are gaining support in Congress and among much of the electorate.

The fact is, socialism is on the rebound in the United States. And healthcare is the top issue for voters in the midterm elections (with 71 percent of respondents saying healthcare is “very important” in making their voting decisions for Congress this year, and at least a quarter choosing health care as the “most important issue,” topping all other issues). Moreover, more than half of Republicans (52 percent) in a new American Barometer poll say they support Medicare for All.

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That’s why the White House decided to issue what, according to Kate Aronoff, “reads like a Red Bull-addled college freshman’s attempt to parse their introductory economics course through a first-response paper,” replete with a definition of socialism taken from the dictionary and a graphic representation of Milton Friedman’s “Four Ways to Spend Money.”

The ostensible reason for the report is to show how socialism, even if implemented peacefully and democratically, create “fundamental incentive distortions and information problems” that lower national income.

But the real target is a particular socialist policy, Medicare for All, to which most of the paper is dedicated. The rest is just an attempt to throw everything against the wall—from anecdotes through dubious calculations to a narrow selection of academic studies concerning the Soviet Union, Maoist China, Cuba, Venezuela, and the Nordic countries—and hope some of sticks to the one policy that, in the context of the United States, has long raised the specter of socialism.*

This policy would distribute healthcare for “free” (i.e., without cost sharing) through a monopoly government health insurer that would centrally set all prices paid to suppliers such as doctors and hospitals. We find that if this policy were financed out of current Federal spending without borrowing or tax increases, then more than half the entire existing Federal budget would need to be cut. Or if it were financed through higher taxes, GDP would fall by 9 percent, or about $7,000 per person in 2022, due to high tax rates that would reduce incentives to supply the factors of production. Evidence on the productivity and effectiveness of single-payer systems suggests that “Medicare for All” would reduce both short- and long-run longevity and health despite increasing somewhat the population with health insurance.

We knew this was coming. It’s almost ingrained in U.S. political discourse, that as soon as a policy to radically change the existing economic order becomes popular it’s smeared with the label of socialism. That’s what the two Red Scares, in the years following the two world wars, were all about.

Any maybe it will work again. But my suspicion is, people are fed up the ineffectiveness and inequality built into the current system of healthcare and won’t be scared off by the tired assertions about the opportunity costs of not being “free to choose” that are proffered by the Council.

In fact, instead of shrinking from the label, we need to recognize that Socialism is already acknowledged by all American Powers to be itself a Power. Moreover, it is high time for Socialists to openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the Specter of Socialism with a manifesto of the movement in support of Medicare for All.

 

*Among the many laughable propositions in the Council’s attempt at economic red-baiting is its critique of the supposed inefficiency of “large state organizations” in socialist agriculture in the Soviet Union, Maoist China, Cuba, without a single mention of the negative effects of large private organizations in contemporary healthcare in the United States, through the ongoing wave of mergers and acquisitions in pharmaceuticals, hospitals, and health insurance.

 

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Last month, Alexander Beunder, the editor of Socialist Economist, asked a handful of “expert economists from around the world”—including Johanna Bockman, Prabhat Patnaik, Andrew Kliman, and myself—two key questions concerning the problems and prospects for socialism, economics, and the Left in the world today. Beunder requested that we keep our answers to two hundred words.

Our answers are now posted on-line, which can be read by clicking on the links below. Here are mine:

What economic obstacles is the Left facing in the 21st Century? 

The spectacular failures of capitalism in the United States have provided fertile ground for a renewed interest in socialism. These include the punishments meted out by the Second Great Depression, the lopsided nature of the current recovery, and a decades-old trend of obscene and still-rising inequality. In addition, the increasing indebtedness associated with higher education, the high cost and limited access to healthcare, and the growing precariousness of the workplace have left working-class Americans, especially young workers, with gnawing financial insecurity — and growing support for socialism. However, the U.S. Left currently faces two main economic obstacles: the decline in labor unions and an attempt to regulate capitalism. During the postwar Golden Age, union representation peaked at almost 35%. Now, it is down to 11.1% — and only 6.6% in the private sector. At least in part as a result, the Left has shifted its focus more to regulating capitalism, often by invoking a nostalgia for manufacturing and using the theoretical lens of Keynesian economics, and moving away from criticizing capitalism, especially its class dimensions (particularly the way the surplus is appropriated and distributed, as Marxists and other socialists understand them).

How can the Left use economics as a tool in the 21st Century? 

Socialist economists can help identify the ways the current problems of American capitalism are not just a matter of economic “imperfections,” but deeply embedded in capitalism itself. Moreover, the Left has the opportunity to propose changes that benefit workers in the short term and empower the working-class to make additional changes over time. Socialist economists can play a key role in the ongoing debates within economic theory (regarding stagnant wages, growing inequality, the one-sided nature of the recovery, and so on) and national politics (concerning universal healthcare, student debt, precarious jobs, and the like)—and to engage the rehabilitation of socialism as a legitimate position within American politics. For example, socialist economists can change the debate about inequality and explain how it is a product not of a lack of skills, but of rising exploitation and the distribution of the growing surplus to the top 10 percent. Similarly, they can change the limits of the possible by showing how movement in the direction of universal healthcare can improve the lives of working-class Americans and, at the same time, create the space for other ways of organizing healthcare itself—by expanding worker cooperatives and other community-oriented ways of providing health services.

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Francisco de Goya y Lucientes, “Murió la Verdad/Truth Has Died” (1814-15)

The liberal establishment continues to mourn the death of truth. Everyone else is moving on.

Every day, it seems, one or another liberal—pundit, columnist, or scholar—issues a warning that, in the age of Donald Trump, we now live in a post-truth world. In their view, we face a fundamental choice: either return to a singular, capital-t truth or suffer the consequences of multiple sets of beliefs, facts, and truths.

For example, just the other day, Keith Kahn-Harris [ht: ja] (in the Guardian) noted the “sheer profusion of voices, the plurality of opinions, the cacophony of the controversy,” which in his view “are enough to make anyone doubt what they should believe.” It’s what he calls “denialism”: the transformation of the “private sickness” of self-deception into the “public dogma” of seeing the world in a whole new way.

There are multiple kinds of denialists: from those who are sceptical of all established knowledge, to those who challenge one type of knowledge; from those who actively contribute to the creation of denialist scholarship, to those who quietly consume it; from those who burn with certainty, to those who are privately sceptical about their scepticism. What they all have in common, I would argue, is a particular type of desire. This desire – for something not to be true – is the driver of denialism.

Then, to ratchet up the morbid consequences of the death of truth, Kahn-Harris plays the ultimate trump card: contemporary denialism involves doubting the existence of the Holocaust, which in turn makes it possible “to publicly celebrate genocide once again, to revel in antisemitism’s finest hour.”

Olivia Paschal [ht: ja] (in the Atlantic) is concerned about a different facet of the world after truth: the role of repetition in creating beliefs that run counter to truth Thus, as she sees it, “even when people know a claim is false, just a few repetitions can make them more likely to think it’s true.” Such “illusory” truths serve to make false claims “familiar” and thus became ways of reframing the debate. Thus, according to Paschal, Fox News has been able to broadcast Trump’s claims (e.g., about the unfairness and inaccuracy of the Russia investigation), which “is also almost certainly contributing to their plausibility among the segments of the population that trust the network.”

As if in response, just yesterday, Margaret Sullivan (in the Washington Post) claimed that, among the consequences of the crisis in American newsrooms, is the decline of “common information—an agreed-upon set of facts to argue about.” So, she complains, in an already deeply divided nation, people turn to Facebook and cable news and thus “were deep in their own echo chambers and couldn’t seem to hear anything else.”

These are just three recent examples of a burgeoning series of complaints, and warnings about the dangers of a world in which a singular truth no longer holds and the need to restore such a truth (as if it once existed)—by challenging denialism, exposing illusory truths, and establishing a set of agree-upon facts.

The “trauma” of Trump’s win just can’t make liberals stop writing this stuff. They keep trying their best to ask the nearly undisguised question: “are Trump supporters really human, like us?” This tells me that the members of the liberal establishment really thought they were never going to face another serious challenge to their ideological hegemony. And now that voters have had the temerity to defy the existing authority, liberals it seems can only dehumanize Trump supporters and, like the members of the Ancien Régime watching over the female cadaver of truth, hope their powers will eventually be restored.

Everyone else, however, is moving on—and a growing number of them are espousing socialist ideas or at least expressing support for them.

The turn to socialism stems in large part from the punishments meted out by the Second Great Depression and the lopsided nature of the recovery. It also represents a disenchantment with mainstream economists and their theories of capitalism, since they failed to consider even the possibility of a crisis in the years before 2007-08, and they didn’t haven’t anything useful to offer once the crash happened. Nor have mainstream economists (or pundits and politicians) been able to explain, much less suggest appropriate policies to undo, the obscene degree of inequality that has been steadily growing for decades now. And, of course, the rising cost of education, the unreliability of health insurance, and the growing precariousness of the workplace have left young people with gnawing material insecurity—and an interest in socialism.

Additional impetus has come from the spectacular—and largely unexpected—successes of Bernie Sanders’s campaign for the presidential nomination of the Democratic Party. And just this past June Americans witnessed the surprising electoral victory of Alexandria Ocasio-Cortez, a self-proclaimed democratic socialist, against ten-term House incumbent Joe Crowley in a New York congressional primary.*

At a pace that appears to match, if not surpass, all the liberal complaints about the death of truth, mainstream American media outlets now regularly publish discussions of (including, but certainly not limited to, attacks on) socialism. There’s socialism in the New York Times, the Washington Post, on CNN, Vox, and on and on.

But, of course, authors in other publications have been thinking about and developing different definitions and approaches to socialism for much longer. One of the best, especially for a younger generation, is Jacobin, which recently included a piece by Neal Meyer on what democratic socialism might mean:

Like many progressives, we want to build a world where everyone has a right to food, healthcare, a good home, an enriching education, and a union job that pays well. We think this kind of economic security is necessary for people to live rich and creative lives — and to be truly free.

We want to guarantee all of this while stopping climate change and building an economy that’s ecologically sustainable. We want to build a world without war, where people in other countries are free from the fear of US military intervention and economic exploitation. And we want to end mass incarceration and police brutality, gender violence, intolerance towards queer people, job and housing discrimination, deportations, and all other forms of oppression.

Unlike many progressives however, we’ve come to the conclusion that to build this better world it’s going to take a lot more work than winning an election and passing incremental reforms.

That’s pretty general but, at this early stage of the new, revitalized discussion of socialism in the United States, it’s a pretty good start.

It certainly moves us beyond the seemingly endless series of teeth-gnashing complaints about the perils of the post-truth world and charts a different path forward, which involves among other things a recognition of the real resentments and desires of working-class Americans, including those who voted for Trump.

Me, I’ll take socialism over truth any day.

 

*According to CNN, the excitement surrounding Ocasio-Cortez’s June stunner spurred another spike in dues-paying members of Democratic Socialists of America. The group now claims to have more than 45,000 members nationally.