Socialism?

In the past few months, the term “liberal” has been substituted with the term “socialist”. Paul Krugman feels that “liberal” was not scary enough but “socialist” still holds that memory of the Cold War. Recently, Rep. Spencer Bachus (R) of Alabama says he has a list of 17 members of Congress who are socialists. That is a bold statement. But what is a socialist? Glenn Thrush of Politico.com writes that the left feels the word is “begnin- if outdated” “interventionist government that prioritizes economic security over the unfettered freedom of the marketplace.” The right considers it “Soviet-style Communism or a leap toward a hyper-regulated European brand of capitalism that stifles innovation and hikes taxes”. Neither party seems to look at is as a compliment. But what exactly is socialism? Is the government really moving towards socialism?

“Socialism refers to a broad set of economic theories of social organization advocating public or state ownership and administration of the means of production and distribution of goods, and a society characterized by equality for all individuals, with a fair or egalitarian method of compensation”-Wikipedia

Socialism is; however, largely undefined. There are different types of socialists, some who support meritocracy and other of a more egalitarian mindset. Socialists, for the most part, do agree that capitalism unfairly concentrates power and wealth and restrains all citizens from partaking in an equal opportunity for success. Socialists do not agree how and to what extent the State should intervene to rectify the perceived problem. Socialists that follow the Russian model favor nationalization of all production, exchange and distribution with a centrally planned economy. Market socialists (Chinese, Yugoslavia, Hungary 1970s/80s) promote a mixing of co-operatives and state ownership along with free market pricing and exchange. Social Democrats favor mixed economies with tax-funded welfare programs and market regulation. Libertarian socialists reject state ownership and believe industry should be collectively owned by the workers. Critics of socialism note that state control will inhibit development and growth which are fueled by capitalist profit hunger, as well as, decrease socialism economic and political freedoms.

Is the US a capitalist nation? The US economy is in fact a mixed economy leaning towards capitalism. The majority of the market is privately or jointly owned and free to make government free decisions aside from government regulations that protect the public. The US government does intervene to protect the public from laissez-faire capitalism which almost no “free market capitalist” would sanely want to abolish. The government (state and federal) provides many services that otherwise would have to be provided by the free market. Infrastructure projects would likely be overlooked by private industry due to the lack of profits and lack of the average Joe’s monetary support by free will. The Government provides many services that the public would not willingly pay for however much they actually need; which is the premise of capitalism. Taxes therefore are needed to provide the public with services needed. It would be scary to see our police departments if they were funded only with optional community contributions.
Governments also currently control our markets directly which is against the principles of capitalism and resemble aspects of socialism. Currently the government provides subsidies to the agriculture sector to ensure that food prices remain low. Is this socialism? The government provides subsidies to the oil industries as well to keep gas prices low? Is this socialism? The answer is yes. The people demand socialist actions (without knowing it) when prices are too high as seen this past year with gas prices. The government can control the markets by injecting money into the system (often in the form of huge tax breaks). In a true capitalist market, supply and demand would control agriculture production and prices. In the oil industry, the government acts to protect the consumer from being gouged at the pump. Renewable energy should be allowed to compete without Government intervention in a capitalist market. The Government keeps gas prices falsely low inhibiting renewable energies from effectively competing. Often times the Government supports renewable energies financially at the same time as supporting the oil industry; which is like betting on both red and black. Government interaction manipulates the competition; socialism (mixed economy).

The emerging debate over “socialized” medicine is interesting. The Obama healthcare reform plan does not nationalize the healthcare industry. Doctors will not become federal employees and the neither will the pharmaceutical companies. The Government will not mandate or micromanage patient/doctor decisions anymore than insurance companies currently do. The Government will; however, invest in new methods and technologies to increase efficiency (computerized records) as well as help encourage insurance enrollment and provide a public plan affordable to all; all should lower healthcare costs. The Government will be investing in the current system to improve it, not micromanage or control it. Healthcare will not be nationalized. Helping lower the cost of healthcare in this country is no more socialist than providing subsidies the oil and agriculture industries to keep their costs to the public low. The Government (taxpayer backed) should be looked at as become an investment partner with the savings in healthcare costs benefiting the public. (http://www.barackobama.com/pdf/Obama08_HealthcareFAQ.pdf)


Another hot topic is redistribution of wealth. Taxing the rich and giving the poor (whether it be a welfare check, welfare programs, or any benefit for the poor that the rich don’t receive that comes from federal dollars). The foundation of socialism is that capitalism unfairly distributes wealth, benefiting the rich and powerful more than those in need. It is true that the majority of the income tax is paid by the top earners in the country and that some of this money is then passed to those in need in the form of welfare. But why do people complain when federal dollars transfer from rich to poor and not from California to Wyoming? No state receives the exact dollar amount to which their citizens pay the federal government through taxes. California pays more into the system than Wyoming; however, Wyoming receives benefits from a collective pot. Interstate support is why we are considered a country and not independent nations.

Why not people? Those people who currently receive welfare are spending the vast majority of their money on food, clothing and shelter. There will always be stories of welfare check receivers with cable TV and XBOX, which may be considered abuse; however, this is not the case for all. If it is looked at as a percentage, rich pay a smaller percentage of their total assets than the poor. A rich man is accumulating wealth while paying only a percentage of a single year’s earnings. A poor man usually does not have the ability to create wealth through a savings account, long term stocks, and other appreciating assets. Meaning most of all of a struggling person’s money goes towards consumption and taxes. Therefore; welfare stimulation goes directly back into the economy and government income. Welfare checks do not spread wealth, the spread opportunity and help families survive. Any successful system is constantly being scrutinized improved and welfare programs should be as well to minimize abuses and wasteful Government spending. If a team is only as strong as its weakest link, why wouldn’t the country want to help the progress of those in the most need? Welfare programs help boost the country’s overall capabilities by helping the weakest links become stronger and more productive. Abandoning social and welfare programs would further strain the system by adding to crime and punishment costs which is the least effective tax expenditure for strengthening the country. Redistribution of wealth implies others are becoming wealthy; which it is obvious that the current system does not do and should not do. The current system attempts to spread opportunity through progressive programs that develop citizens as well as monetary support to give individuals more of a chance to better themselves and their families by lightening the load.

The current welfare system and the direction the Obama administration wants to take the country is not any more socialistic than our current system. It is an investment in making the American dream more attainable for all citizens. The Government is not nationalizing industry; however, they are putting direction on their investments. Healthcare will see investments to increase efficiency and other measures to help drop costs so people can afford their own insurance or enroll in public insurance. Healthcare costs will be lowered but healthcare decisions will not be controlled or curtailed. We are not a socialist nation. We are a capitalist nation who’s Government protects its citizens from the evils that come along with capitalism. It is not socialism, it is smart governance for a stronger future for all.