Home > Uncategorized > Socialism ain’t what it used to be

Socialism ain’t what it used to be

from Dean Baker

I was very disappointed with Ezra Klein’s NYT interview with Bhaskar Sunkara, in large part because I have a high opinion of Sunkara, the founder of Jacobin and now the president of The Nation. My main disappointment stems from his non-answer to one of the main questions raised by Klein.

Klein asked why the Democrats, and other liberal/left parties around the world, rely largely on more educated people for their support, while more working-class types have turned to the right. Socialists had historically envisioned socialism as the agenda of the working class, not college-educated professionals.

Sunkara gave an answer that put the blame on the decline in unions, which is undoubtedly a big part of the story. But the answer clearly goes beyond this.

Liberal/left parties around the world in recent decades, have not only often supported policies that weakened unions, but they have also supported policies that directly redistribute money from the traditional working class to people with more education, you know, the ones carrying the flame of socialism.

My favorite example here is government-granted patent and copyright monopolies. As I have pointed out endlessly, hundreds of billions of dollars annually, quite possibly over a trillion (5 percent of GDP, more than the military budget), are transferred from the public as a whole, to the people in a position to benefit from these monopolies.

If not for these government-granted monopolies, Bill Gates would likely still be working for a living. But the beneficiaries go far beyond the very rich. The labor of millions of people, with education in a wide variety of areas, is made far more valuable because of these monopolies, which have been made longer and stronger in the last four decades.

Since intellectuals thrive on making really silly arguments, let me be clear. I am sure that almost no working-class type decides they will not support the Democrats in the United States, or Socialists in France, or Social Democrats in Germany because these parties support patent and copyright monopolies.

Their reason for opposing these parties is that they see lots of people who have benefitted from the way the economy has been restructured over the last four decades, and they know that they have been losers in that deal. It is not surprising that they would not like the people who have benefitted from upward redistribution at their expense, even if they have very little understanding of the processes involved.

As I have pointed out in Rigged [it’s free], the policies causing upward redistribution go beyond just patent and copyright monopolies. The concept of “free trade” has become a sacred cause for many of these left-liberal parties, but this concept almost never extends to the work of highly paid professionals like doctors, dentists, and lawyers. While they view it as very important to drive down the pay of autoworkers by making it as easy as possible to import cars and parts from countries with low-paid manufacturing workers, there is very little interest in removing the barriers that prevent qualified doctors from India or Mexico from working in the United States.

Most of these left-liberal parties have acquiesced in, if not actively supported, the growth of a bloated financial sector that is a massive drag on the productive economy. To be clear, we need a financial sector to facilitate transactions and to allocate capital, but when the size of this sector increases five-fold relative to the rest of the economy, without any obvious improvement in services (are your investments more secure today than they were in 1970?), that is waste. And, the beneficiaries of this waste are overwhelmingly more educated people who land plush jobs in the financial sector.

I can go on with more policies (how big would Facebook be without Section 230 protection?, what market mechanism limits the pay of CEOs and other top executives?) that have had the effect of redistributing income from working-class types to college-educated people in recent decades, but the point should be clear. College-educated people have benefited from a wide range of policies that have taken money from the working class.

Incredibly, Sunkara seems to have zero appreciation of this fact. He wants to redistribute through social democratic tax and transfer policies, which is great, but the working class would not be wrong to think that this looks like pie in the sky. We have not seen great progress in advancing the welfare state in the last four decades, especially in the United States.

Marx very explicitly looked at how income was distributed in the production process. He got many things wrong, but I thought this was an approach that most self-described socialists still followed. Apparently, that is not the case, and that is a big disappointment.

  1. June 23, 2022 at 7:30 am

    Dean, most of this is correct in facts and observations about political behavior. It’s a good part of the story of the troubles of the left since Thatcher-Reagan.

    However, as I’ve written many times before, the tone and substance at the AFL-CIO seems wildly at odds with the history you describe. On your own good work on what the minimum wage should be taking into account missing productivity gains and inflation adjustments…

    To me, its most revealing that no labor equivalent of AOC or Sanders has arisen within the AFL-CIO itself, and the lack of passion despite the obvious suffering and kicks to the gutter since Carter, it’s never resulted in a passionate, tell it like it is Labor Day address.

    Based on your views, and mine, there should have been a labor leader’s equivalent with better facts and m ore passion to Trump’s Inaugural “American Carnage” speech – which the left has mocked but only offered H. Clinton’s “we’re still great” in response.

    And labor itself has undercut the push for universal health care, the guaranteed of a job, the Second Bill of Rights, and most egregiously with this writer, their attack out of the gate on the Green New Deal.

    And labor leader with a heart looking at the fact of the greatest transfer of wealth in human history – $53 Trillion upward to the 12% at the top by legislation and regulations from 1975-2018 documented in the RAND study cited in Time Magazine in Sept. of 2020 – the heart of the Presidential campaign but never referred to by Joe Six Pack Biden…well, that says it all.

    I know what John Lewis would have done with Joe Manchin: punched him in the jaw. Biden gave him a hug. Ah well.

    • robert locke
      June 23, 2022 at 8:36 pm

      two recent us economic developments produded malditribution of wealth, one is financialzation, which rewarded the educated rich, but the other is managerialism, which led to director prominence in boardrooms and their control of decision making, including distribution of emuluments.

  2. June 23, 2022 at 8:13 am

    Let me elaborate a bit here on my recommendation of a punch in the mouth, or whatever, as the proper response of the labor left to Joe Manchin. When John L. Lewis famously did that to Big Bill Hutchinson at the dawn of the break of the CIO from the building trades dominated AFL – in the mid 1930’s…it had the aspect of a baseball brawl when an opposing pitcher throws a high inside fastball to your hottest hitter. Their are hormones boiling, and a response is required, but it is more symbolic than actual bloodletting. And so with Johh. L. Lewis’s reaction in defense of the newly insurgent industrial-immigrants…based on his “feel” for the miners in his union. Ironically, Lewis was a wealthy Republican.

    I was banned from the Daily Kos, an allegedly liberal blog site where I had published since 2014, banned in Oct. of 2021 for having the foresight, and insight, that “Joe Biden was destroying the Democratic Party.” In a response to one of 277 angry commentators I suggested that the best thing Biden could do to help himself in national standings, and within his own party, was to confront Joe Manchin ala John L. Lewis from West Virginia.

    All it takes to get banned from Daily Kos – or suspended, is to have two members “flag you” for violated their rules – such as non-violence. I was flagged and suspended for three days – but never re-instated even to this day, when I think they owe me an apology based on my accurate insight into Biden wrecking the Democratic Party, which the nation, by polling seems to agree with.

    Only a fool would advocate violence as a policy for the left versus the 300 million weapons held by citizens in the US, largely in the hands of the right. By sometimes in human interactions, until we all are saints, a good symbolic punch sends the right signal, as Harry Truman did to Drew Pearson, columnist who was picking on his family.

    I hope this doesn’t upset too many “rational expectationalists” out there.

    • June 23, 2022 at 10:21 am

      You are always very fun to read. I flunked out of Daily Kos and Jacobin much less dramatically… Congratulations.

      As an aside, Presidents Xi and Putin seem to me a bit like your visceral union and President Truman examples.

      • June 24, 2022 at 1:33 pm

        Well thank you, in part, Garrett Connelly. Your response is a bit like “expectations in inflation” – just the slightest sign of a change in paradigms in favor of labor – little solo victories at Starbucks and one Amazon center – and whoosh, here comes the ghost of Paul Volker and the austerity balloons are released everywhere. So a little combativeness in American politics is matched by Putin putting 120,000 or more troops on Ukraine’s border, with cause or not, giving the West at least three months to head off what we said was coming – maybe six months…and send troops – US, Britain, France and Poland not to the borders but stationed inside Ukraine near key target cities. Daring Putin then to do it so that we wouldn’t be in our nasty proxy war where the Ukrainians do all the dying and Joe Biden will hug all the widows.
        I’m for a civil society but that doesn’t mean punches won’t get thrown in caucuses, schoolyards or bars, or when Senators from little states backed by corporate America derail an entire party’s constructive agenda without a public pushback.
        At the same time I do watch some professional boxing these days because Fox1 used to come with my Comcast package, I know a nation’s downward democratic spiral is accelerating when there are 300-400 million guns in private hands under our tumultuous social and economic conditions…
        I don’t own one of them.

  3. Andri Ksenofontov
    June 24, 2022 at 12:37 pm

    Thanks for this insight, I am puzzled too by the lack of the ability of even genuinely good willing politicians from the intellectual circles to connect with real people, with general real issues. I think that it is largely conditioned by the fear of the ‘epistemological naivety’ that drives many researches to limit their research to what is in people minds instead of empirical reality. Here I would like to add a word in defence of Marx: he did not get many things ‘wrong’, but he described social phenomena that change in time. This is what makes social sciences different from natural sciences: even the basic principles of social phenomena can change while the gravitational constant, for example, does not change in time. Marx, a social scientist who started to apply the exact methods of his contemporary natural sciences in his research, understood also the natural error in scientific observations and descriptions. These are the dogmatic verbal constructs cast in books in professionally edited wording that are hard to challenge.

    Social scientists, like Marx, should not be afraid of getting things ‘wrong’ the same way as natural scientists view it as the natural condition of infinitely ongoing scientific debate and improvement in knowledge. Coming back to the working class outside the academic circles, they will likely start to trust the academic left more when they see that the academics are willing and able to correct and improve their explanations and theories alongside with the changes in society or when more research is done. The working class is an empirical subject matter of social scientists that happens to be conscious of themselves and of the changes they and their environment undergo. When they see that the intellectual left does not address these realities that the working class is aware of in their immediate experience then they loose their trust.

    The opposite camp cannot be beaten on their terms because they win people over by choosing to tell them what they like to hear, not what actually is (in the epistemologically naive sense).

    Just in case people get sidetracked, I am reminding also of the simple defining feature of socialism: public ownership of means of production.

  4. June 24, 2022 at 2:14 pm

    Andri: instead of Build Back Better, the Democratic Party once again gave the bottom 60%, working class and lower middle class DDD: Dems Don’t Deliver: no national minimum wage, no labor law reform (dangled and reeled in under Carter, 2 terms of Clinton, 2 terms of Biden and 1 term under Biden ) no reworking of the starting point for alternative energy, the electric grid…no child care, paid leave…student debt forgiveness…and not talked about much in economic circles, no Civilian Conservation Corps or systematic rural assistance.
    The Dems are too conflicted with the incorporation of business interests amidst the ghosts of the old New Deal coalition to come up with any coherent program for the nation’s problems, or the working classes. Mr. Trump has told workers their problem is environmental regulation of industry, competition from Hispanic immigrants, and special favors for black Americans…and once again, the break down of law and order. The clear implication of Larry Summers continuing blocking of progressive ideas is that what he has signaled by his correct call on the rise of almost runaway inflation is that even the slightest improvement in median wages (still behind the rise in costs of living measured by either index) or subsidy by government via one time boosts of 2,000 dollars…will upend the whole economy. Even as economists looks closely and decide that business price increases and supply chain troubles and energy costs have contributed much more percentage wise to price rises than labor costs…Summers message to the Kellogg School of Management this May is hardly a balanced view of matters: the bulk of the burden falls upon labor, even though it didn’t get a national minimum wage of 15 dollars per hour or labor law reform…apparently its uncoordinated and spontaneous reaction to low pay, low benefits and high Covid risk was to withdraw from the labor market, thus forcing service businesses like restaurants to pay m ore. So now the service sector drives the economy?

    I have found that Mark Blyth’s insights into the complete intellectual failure of the Democratic Party during the late 1970’s and early 1980’s as brought to us by his little acknowledged book from 2002 “Great Transformations: economic ideas and institutional change in the twentieth century, to be very persuasive: no answer to stagflation or to Volker’s brutal wringing of inflation out of the economy at the cost of near collapse – the failure of industrial policy pushed by R. Reich and Ira Magaziner in the early 1980’s – killed by Summers and Krugman and crippled, says Blyth by its dependence on federal funding for business not workers (revived again by Biden but muffled behind the scenes)…once again the Dems have failed to reverse the death of federal government competence in terms of policy development and execution…the only functioning institution seeming to be the Federal Reserve and its tools now are a milder version of Volkers strategy.
    Business itself could have saved Biden’s program, being the dominant organized lobbying power in Washington, but it sided with Manchin & Sinema instead…even if it means the triumph of Trump again…after all, Trump kept the music playing until Covid – the longest sustained growth in economic history going back to the mid 19th century according to the Economist…if you don’t get picky with actual GDP growth rates between the crashes.

    The only serious set of ideas to challenge business and the Republican Right have been MMT – and you know how Summers feels about that…even B. Sanders wouldn’t publicly go for it according to S. Kelton…instead, Sanders wants to fund his programs, the expansive Green New Deal and Medicare for all…via higher taxes and revamping the inheritance taxes. He was unable to sell that program even to black leaders in Congress, symbolized by the SC primary in March of 2020 and the stances of Rep. James Clyburn.

    Just what are the economic beliefs of older black church going women, the base for Clyburn. I don’t know for sure but I don’t think they sit around after the sermons and discuss the merits of MMT vs Sanders tax the rich.

    We are all waiting on the left, Marxists or not, for a labor revival and a set of idea to challenge the business hegemony started by Thatcher and Reagan, itself a revival of the early 19th century “liberal” economists (conservative is the better description for contemporary circumstances, not their fight to escape mercantilist ideas) Buttressed by the Austrian school’s “lesson” from the great German inflation and Great Depression.

    The Green New Deal was the closest we’ve come, along with MMT, in a set of new ideas to challenge business hegemony. If one follows closely its demise – attacked out the gate by the AFL-CIO leadership, Pelosi, Schumer, Clymer and Hoyer…it had lost its steam by the summer of 2019…was it too green and too middle class for the building trades?
    We all await the emergence of a new class consciousness amidst Walmart, Target, Starbucks, Home Depot, Amazon, and restaurant fast food chain workers…but it looks like before that emerges, we’ll have a head on challenge to democracy amidst a repeat of 1978-1984 economic ideas.

    Meanwhile, let’s sit down and have a beer with Larry Summers, maybe we can find common ground around the Red Sox.

  5. June 24, 2022 at 2:39 pm

    Here’s the link to Summer’s May, 2022 interview after his address to the Kellogg School of Business: https://insight.kellogg.northwestern.edu/article/larry-summers-inflation-economic-policy

    Are we in another “Knightian moment” where Summers can be right about the emergence and timing of Inflation, but really have no evidence to back the claim that it was egalitarian spending (more desperate life saver where the egalitarian generosity spread upwards in ways to cover the new democratic base – hardly working class alone) or wage pressures which caused it?
    That’s what I like about Blyth’s book and handling of reactions to the Great Depression and the Stagflation of the 1970’s, early 1980’s: it’s a deft sifting of the social and economics currents: interests vs institutions vs ideas…and crises that have no clear solutions with the ideas lying around. Blyth’s shredding of the Dems under Clinton, their transformation into a mild version of what liberal Republicans stood for in the 1970’s…actually, even to the Right of them…if you remember Bill Scranton and Mitt Romney’s father’s famous quotations hurled against Goldwater at the 1964 convention…see Rick Perlstein’s “Before the Storm.”

    Fair warning: I will be writing about INFLATION shortly, so “brace yourselves.”

    Here’s a signal flare:

    The power to unleash INFLATION rests with the business firm, either the CEO or CFO has the power to raise or not, and explain why or not. That is the way capitalist society is set up. It may be a fair, just or outrageous decision but missing are the institutions and judiciary to weight all the factors behind that power decision and render a verdict. Academic economists may try, but they are usually way short of manpower and behind the time curve to render whether the decision was “just” for the whole society, and of course today firms has only shareholders, not workers or the public good to consider. Who says selling fewer at a higher price is ‘bad” in such an inegalitarian society where 12% can pay any price for “bread.” Between 1935 and 1975 one can argue that organized labor had a share of this power, usually behind the curve but still had the tools of wildcat and sanctioned strikes to wield. No longer. From this starting premise we can now look at today’s situation with clearer eyes.”

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: