The "S" Word - Socialism in America

“Who are you?” said the Caterpillar. 

This was not an encouraging opening for a conversation. Alice replied, rather shyly, “I—I hardly know, Sir, just at present—at least I know who I was when I got up this morning, but I think I must have been changed several times since then.” 

“What do you mean by that?” said the Caterpillar, sternly. “Explain yourself !” 

“I ca’n’t explain myself, I’m afraid, Sir,” said Alice, “because I’m not myself, you see.”

-- Lewis Carroll. Alice's Adventures in Wonderland and Through the Looking-Glass (Kindle Locations 1019-1023). Random House, Inc.. 

I'm from Milwaukee. The home of beer, meat packing, and socialism. Or as Alice Cooper explained in Wayne's World, "I think one of the most interesting aspects of Milwaukee is the fact that it's the only major American city to have ever elected three socialist mayors."  

    Milwaukee holds a rich and vibrant immigrant past. Germans brought with them the techniques for brewing as well as the ideals of a government supporting the people, not to mention festivals, pilsners and lagers. At one time, when walking in the streets of Milwaukee, you'd have heard more German than English being spoken. Several of the major newspapers were published in German. Buildings retain that German heritage indelibly etched in stone, like the German-English Academy that still boasts 'Turnlehrer Seminar N.A.T.B.' The legacy of a socialism movement in Milwaukee remains in the public transit, Summerfest, and lakefront festivals, and on Jones Island where effluence is transformed into Milorganite for fertilizer, and the liquid refuse is sanitized and returned to Lake Michigan.

   In this pandemic-plagued election season the most common boolean search should be socialism. Bernie Sanders and Alexandria Ocasio-Cortez have made socialism one of the most talked about concepts throughout a good portion of the campaign season. The Right and conservatives demonize and vilify it while Marxists and the Left idealize it.

    The truth is far less sensational. The truth is that socialism and socialist constructs are ubiquitous in America and have been for over a century. The truth is also that fighting for socialism required the no-nonsense duty and commitment that didn't make headlines and didn't bring fame. Victor Berger, the editor and journalist from Milwaukee and the first elected socialist congressman, was denied his seat in D.C. For his dissent against American involvement in World War I, he spent time behind bars. But the people of Milwaukee would not be denied his seat. They re-elected him three times until a judge finally overturned his conviction and he served his term in the nation's capital. As a reward for his hard work, the east coast socialists bestowed the Milwaukee socialist with the vituperative name 'sewer socialists.' 

    Milwaukee politicians and the public embraced the term. Sewer socialism earned its name from the fight in Milwaukee over clean water. Milwaukee at the turn of the twentieth century was one of the largest cities in America. The population density matched that of Manhattan and it was growing fast. As the population grew, so did the amount of polluted water. Human, animal and industrial waste was transported from the source to the nearest rivers. And the rivers were the source of potable water, which it wasn't. Sickness and illness were rampant. The socialists organized to fight for clean water and clean government. 
    The sewer socialists weren't talking about government takeover of industry like their namesakes on the east coast. Instead, in Milwaukee the socialists won elections by promising and achieving practical change. Along with clean water, they fought corruption in the government; they aimed at creating better lives for the people through public education, parks, libraries, and safer working conditions. This mantle of socialism in Milwaukee thrived until the last socialist mayor, Frank Zeidler, decided not to run for a fourth term in 1960. So for about 60 years, socialists held major sway over the running of a major US city.

    Yet for all of that history, there's an awful lot of confusion about just what socialism is and what it is not. 

    It's hard to know what people are talking about when socialism is brought up especially when in many cases the person describing socialism doesn't know what socialism is. Listen to Alabama's newly elected senator Tommy Tuberville's ahistorical explanation that we fought against "socialism and communism as our enemies in WWII." Of course, he botched that entirely. The communists in the Soviet Union were, in fact, US allies fighting against the Nazis and the axis nations. Our common enemy was fascism as introduced by Mussolini and Hitler. It was not socialism. Over the years, socialism and communism have melded together. Is that an accurate conflation? What is socialism? Socialism who, what, are you?  

    William Buckley, Jr. defined socialism when in growing frustration with interlocutor Michael Harrington's repeated denials that the LBJ poverty program was a socialist platform, Buckley blurted out, "Nobody any more thinks of the word socialism as involving purely the ownership of the means of production. Obviously, it's a socialist program; socialistic in the sense that it is financed and governed by a central authority, that it does not encourage private means by which much of the same thing can be done." For Buckley, poverty would better be attacked through private entrepreneurship and government incentives like tax deductions.

    But for the socialists in Milwaukee, poverty could be defeated when the government invested in education, mass transit, clean parks and a clean way of life. They created a Milwaukee that thrived up to and around the two world wars.

    American socialism's apex nestled between the Civil War and the beginning of the Cold War. Nationwide, life for the common worker was poor, nasty, brutish, and short. Upton Sinclair's depiction of the meat packing industry in The Jungle spurred vast regulation and oversight. Theodore Roosevelt rode into the White House with the full support of muckraking socialist-leaning journalists and progressives who hoped for a presidency more inclined to "government takeover of the railroads, elimination of private utilities, easier credit for farmers, the outlawing of child labor, the right of workers to organize unions, increased protection of civil liberties, an end to US imperialism in Latin America, and a national referendum vote before any president could again lead the nation into offensive war."

    Around the country, socialists elected to local office ushered in huge changes to work weeks, workers' rights, safety standards, clean water standards, fire prevention, and myriad public works. It was progressives and socialists who paved the way for the New Deal and it was Eugene Debs' influence on unions and worker organizations that led to OSHA and safety standards.

    Anyone who tells you that publicly funded fire prevention, police protection, national parks, education, sewerage systems, roads and infrastructure, a standing military, libraries, Medicare, Social Security are not socialist systems need only be reminded of Milwaukee's history. 

    In the wealth of available contemporary literature on the subject, there's Michael Newman's very easy reading book simply called Socialism. But it's journalist John Nichols' The "S" Word: A Short History of an American Tradition...Socialism that narrates the full poignant and compelling story of the people behind the movement that changed America. Milwaukee takes center stage as the experimental city with its socialist vision for anti-corruption and a government that fights for the welfare of the people.  

    Berger, Eugene Debs, Daniel Hoan, Zeidler, Emil Seidel, Norman Thomas share the starring roles. "The Socialists’ most immediate and noteworthy accomplishment...was to root out municipal corruption, much of which came from the brothels in City Hall’s shadow and from the privately-owned streetcar which stopped at its front door. With that task complete, Hoan and Zeidler then set about building public institutions, which continue to improve our lives today."

    Today, regardless of the way Republicans tell it, people really like socialist policies. Take a look at health care, for example. The Kaiser Family Foundation has tracked public opinion on Medicare for many years. Older Medicare recipients are happiest with their coverage. Nearly nine out of 10 people who are 80 years old or older say they're satisfied or very satisfied with Medicare. Only 6% said they're either dissatisfied or very dissatisfied. That's compared to 79% of people age 71 to 79, 71% of people 65-70 and 69% of those under 65; satisfaction with private health plans drops to 55%.

    Upon reaching the final pages of Nichols' crucial and essential book, no one should be surprised if a latent desire to implement socialist policies throughout the country suddenly awakens. At a time when health care and public health has been thrust upon the forefront of all our minds, there are those still fighting to overturn the ACA and cast millions into healthcare uncertainty. At a time of widespread infrastructure and education failures, it seems more pressing than ever to initiate a government-backed push to restore and provide for the welfare of the American people. 

    From the Milwaukee experiment, FDR built on the socialist platform and co-opted its ideas and systems. Today, millions of seniors rely on socialist inspired Medicare and Social Security. All Americans can thank socialists for sewers, clean water, city, state, and national parks. The socialist legacy that began as an experiment in Milwaukee, pervades the entire American system.    

Excerpt from The "S" Word, by John Nichols:

    "If we have been led to believe anything by the enthusiastic expressions of our media and political elites, it is the basic premise that America was founded as a capitalist country and that socialism is a dangerous foreign import best barred at the border. The common if not quite wholly accepted “wisdom” holds that everything public is inferior to anything private; that corporations are always good and unions always bad; that progressive taxation is inherently evil and the best economic model is the one that avoids the messiness of equity by allowing the extremely wealthy to skim off their share before letting what remains trickle down to the great mass of Americans. No less a historian than Rush Limbaugh informs us with some regularity that proposals to tax people as rich as he is in order to provide health care for sick kids and jobs for the unemployed are “antithetical to the nation’s founding.” Limbaugh, the loudest voice in an anti–Barack Obama echo chamber, says that the president is “destroying this country as it was founded.” 

    The shrillest of Limbaugh’s flattering imitators, Fox News’s Sean Hannity, charged when Obama offered tepid proposals to organize a private health-care system in a modestly more humane manner, that “the Constitution was shredded, thwarted, the rule of law was passed aside …” Hannity got no argument from his guest on the day he assessed the damage done to the Constitution by those who would care for our own: former speaker of the US House of Representatives Newt Gingrich. “This is a group prepared to fundamentally violate the Constitution,” the former congressional leader (and 2012 Republican presidential contender) said of an Obama administration that he argued was playing to the “30 percent of the country [that] really is [in favor of] a left-wing secular socialist system.” Then, for good measure, Gingrich compared Obama with Venezuelan President Hugo Chávez—an actual and ardent socialist who, though the former speaker apparently missed the report, had recently referred to the American president as “a poor ignoramus [who] should read and study a little to understand reality”—with a crack about Obama’s previous employment as a constitutional law professor. “Which constitution was he teaching? Venezuelan constitutional law?” opined Gingrich. “I mean, you know, I can’t imagine how he could have actually taught American constitutional law and be this wrong this often.” 

    The former speaker, who swore more than a few oaths to “support and defend the Constitution of the United States…without any mental reservation or purpose of evasion,” surely knows that the document makes no reference to economic systems, to capitalism, to free enterprise or to corporations or business arrangements. Unfortunately, as James Madison warned, partisan excess can cause even former history professors at West Georgia College to lose their bearings. The same can be said for former heads of the Fellowship of Christian Athletes at Wasilla High School. 

    Though Sarah Palin famously struggled to name a “favorite founder” when asked to do so by Glenn Beck, and though she made remarks about the role of the vice presidency that provoked a lively national debate about whether she had ever read the nation’s founding document, that did not in the spring of 2009 prevent the former governor of Alaska from raising constitutional concerns about Obama’s proposal to develop a system of “universal building codes” in order to promote energy efficiency. “Our country could evolve into something that we do not even recognize, certainly that is so far from what the founders of our country had in mind for us,” a gravely concerned Palin informed a nodding Sean Hannity on the Fox News Channel. 

    Hannity had an idea about the direction in which Obama was evolving the country. Arching an eyebrow and leaning forward with all the “I play an anchorman on TV” sincerity of someone who had recently volunteered to be waterboarded for charity, he interrupted Palin with a one-word question.

    “Socialism?” 

    “Well,” the immediate former vice-presidential nominee of the second-oldest political party in the nation responded, “that’s where we are headed.” 

    Actually, it’s not. 

    Palin was wrong about the perils of energy efficiency. And she was wrong about Obama. 

    That is no cover for the 44th president. This book is not written as a defense of Barack Obama against any charge. In fact quite the opposite, as Chapter Seven will detail. What is important for the purposes of introduction is that the president says he is not a socialist. And the country’s most outspoken socialists heartily agree with him on that point. Indeed, the only people who seem to think Obama displays even minimally social-democratic tendencies are those pundits, politicos and pretenders to concern about the republic who imagine—out of sincere if misguided faith, or for the purposes of crude electioneering—that the very mention of the word “socialism” should inspire in Americans a reaction not unlike that of a vampire confronted with the Host.

Nichols, John. The S Word (pp. 4-6). Verso Books. Kindle Edition.   

 

We are told that this is a new age. Yet, all that is new are the gadgets we are sold, and the prospect that those gadgets might put a lot of us out of work. The schemes of fabulously wealthy monopolists to increase their wealth at the expense of the rest of us are certainly not new. They are ancient, as ancient as what Eugene Victor Debs described when he recalled “the old ethic that man’s business on this earth was to look out for himself.” That, complained Debs, “was the ethic of the jungle; the ethic of the wild beast. Take care of yourself, no matter what may become of your fellow man.” Just as monopolists and monopolies are not new, neither are the responses to those schemes. It is good and necessary to demand jobs for the unemployed and wages for the underpaid. It is good and necessary to fight to maintain the rough outlines of civil society as defined by public education and public services. There is nothing new about these fights, nothing modern about these demands. They, too, fit in the construct stated by Debs when he explained, “Thousands of years ago the question was asked: ‘Am I my brother’s keeper?’ That question has never yet been answered in a way that is satisfactory to civilized society.” Debs was trying to sort that all out in 1908. A century and some years later, we’re still at it. 

    Unfortunately, in a digital age, some responses are less sufficient than they once were. There is even, in specific circumstances, a danger that incremental responses may fit rather too easily into the business plans of the new monopolists—who meet demands for more pay for human beings with schemes to spend a little more on research and development of the apps and robots that replace human beings. It’s a vicious circle, and most of us are running in it. The way out is not to run faster. The way out is the same as it has always been: to seek a new politics that is adapted to our times but that is not defined by them. What is needed is a politics that is sufficient to assert the social and human agenda in the face of rapid technological change and the raging inequality that extends from that change—a politics that puts the people in charge not just of making economic demands but of making economic decisions. 

    The crisis of the twenty-first century, already well defined and much discussed by elites, is that digitally defined and driven automation, in combination with a race-to-the-bottom ethic with regard to globalization, will lead to dramatic displacement and dislocation of workers. European Commission technology commissioner Neelie Kroes explained in 2014 that: “a shortage of jobs is a pending social disaster.” Google CEO Eric Schmidt admits: “There is quite a bit of research that middle-class jobs that are relatively highly skilled are being automated out.” What is now commonly referred to by the elites who gather for economic conferences at Davos and Aspen as “the jobs problem” will, Schmidt argues, be “the defining problem” of the next several decades. “The race is between computers and people and the people need to win. I am clearly on that side,” says Schmidt, who counsels that: “it is pretty clear that work is changing and the classic nine-to-five job is going to have to be redefined. Without significant encouragement, this will get worse and worse.”

Nichols, John. The S Word (p. 264). Verso Books. Kindle Edition. 

Why Socialism?

By Albert Einstein
Albert Einstein is the world-famous physicist. This article was originally published in the first issue of Monthly Review (May 1949). It was subsequently published in May 1998 to commemorate the first issue of MR‘s fiftieth year.
—The Editors of Monthly Review

Is it advisable for one who is not an expert on economic and social issues to express views on the subject of socialism? I believe for a number of reasons that it is.

Let us first consider the question from the point of view of scientific knowledge. It might appear that there are no essential methodological differences between astronomy and economics: scientists in both fields attempt to discover laws of general acceptability for a circumscribed group of phenomena in order to make the interconnection of these phenomena as clearly understandable as possible. But in reality such methodological differences do exist. The discovery of general laws in the field of economics is made difficult by the circumstance that observed economic phenomena are often affected by many factors which are very hard to evaluate separately. In addition, the experience which has accumulated since the beginning of the so-called civilized period of human history has—as is well known—been largely influenced and limited by causes which are by no means exclusively economic in nature. For example, most of the major states of history owed their existence to conquest. The conquering peoples established themselves, legally and economically, as the privileged class of the conquered country. They seized for themselves a monopoly of the land ownership and appointed a priesthood from among their own ranks. The priests, in control of education, made the class division of society into a permanent institution and created a system of values by which the people were thenceforth, to a large extent unconsciously, guided in their social behavior.

But historic tradition is, so to speak, of yesterday; nowhere have we really overcome what Thorstein Veblen called “the predatory phase” of human development. The observable economic facts belong to that phase and even such laws as we can derive from them are not applicable to other phases. Since the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development, economic science in its present state can throw little light on the socialist society of the future.

Second, socialism is directed towards a social-ethical end. Science, however, cannot create ends and, even less, instill them in human beings; science, at most, can supply the means by which to attain certain ends. But the ends themselves are conceived by personalities with lofty ethical ideals and—if these ends are not stillborn, but vital and vigorous—are adopted and carried forward by those many human beings who, half unconsciously, determine the slow evolution of society.

For these reasons, we should be on our guard not to overestimate science and scientific methods when it is a question of human problems; and we should not assume that experts are the only ones who have a right to express themselves on questions affecting the organization of society.

Innumerable voices have been asserting for some time now that human society is passing through a crisis, that its stability has been gravely shattered. It is characteristic of such a situation that individuals feel indifferent or even hostile toward the group, small or large, to which they belong. In order to illustrate my meaning, let me record here a personal experience. I recently discussed with an intelligent and well-disposed man the threat of another war, which in my opinion would seriously endanger the existence of mankind, and I remarked that only a supra-national organization would offer protection from that danger. Thereupon my visitor, very calmly and coolly, said to me: “Why are you so deeply opposed to the disappearance of the human race?”

I am sure that as little as a century ago no one would have so lightly made a statement of this kind. It is the statement of a man who has striven in vain to attain an equilibrium within himself and has more or less lost hope of succeeding. It is the expression of a painful solitude and isolation from which so many people are suffering in these days. What is the cause? Is there a way out?

It is easy to raise such questions, but difficult to answer them with any degree of assurance. I must try, however, as best I can, although I am very conscious of the fact that our feelings and strivings are often contradictory and obscure and that they cannot be expressed in easy and simple formulas.

Man is, at one and the same time, a solitary being and a social being. As a solitary being, he attempts to protect his own existence and that of those who are closest to him, to satisfy his personal desires, and to develop his innate abilities. As a social being, he seeks to gain the recognition and affection of his fellow human beings, to share in their pleasures, to comfort them in their sorrows, and to improve their conditions of life. Only the existence of these varied, frequently conflicting, strivings accounts for the special character of a man, and their specific combination determines the extent to which an individual can achieve an inner equilibrium and can contribute to the well-being of society. It is quite possible that the relative strength of these two drives is, in the main, fixed by inheritance. But the personality that finally emerges is largely formed by the environment in which a man happens to find himself during his development, by the structure of the society in which he grows up, by the tradition of that society, and by its appraisal of particular types of behavior. The abstract concept “society” means to the individual human being the sum total of his direct and indirect relations to his contemporaries and to all the people of earlier generations. The individual is able to think, feel, strive, and work by himself; but he depends so much upon society—in his physical, intellectual, and emotional existence—that it is impossible to think of him, or to understand him, outside the framework of society. It is “society” which provides man with food, clothing, a home, the tools of work, language, the forms of thought, and most of the content of thought; his life is made possible through the labor and the accomplishments of the many millions past and present who are all hidden behind the small word “society.”

It is evident, therefore, that the dependence of the individual upon society is a fact of nature which cannot be abolished—just as in the case of ants and bees. However, while the whole life process of ants and bees is fixed down to the smallest detail by rigid, hereditary instincts, the social pattern and interrelationships of human beings are very variable and susceptible to change. Memory, the capacity to make new combinations, the gift of oral communication have made possible developments among human being which are not dictated by biological necessities. Such developments manifest themselves in traditions, institutions, and organizations; in literature; in scientific and engineering accomplishments; in works of art. This explains how it happens that, in a certain sense, man can influence his life through his own conduct, and that in this process conscious thinking and wanting can play a part.

Man acquires at birth, through heredity, a biological constitution which we must consider fixed and unalterable, including the natural urges which are characteristic of the human species. In addition, during his lifetime, he acquires a cultural constitution which he adopts from society through communication and through many other types of influences. It is this cultural constitution which, with the passage of time, is subject to change and which determines to a very large extent the relationship between the individual and society. Modern anthropology has taught us, through comparative investigation of so-called primitive cultures, that the social behavior of human beings may differ greatly, depending upon prevailing cultural patterns and the types of organization which predominate in society. It is on this that those who are striving to improve the lot of man may ground their hopes: human beings are not condemned, because of their biological constitution, to annihilate each other or to be at the mercy of a cruel, self-inflicted fate.

If we ask ourselves how the structure of society and the cultural attitude of man should be changed in order to make human life as satisfying as possible, we should constantly be conscious of the fact that there are certain conditions which we are unable to modify. As mentioned before, the biological nature of man is, for all practical purposes, not subject to change. Furthermore, technological and demographic developments of the last few centuries have created conditions which are here to stay. In relatively densely settled populations with the goods which are indispensable to their continued existence, an extreme division of labor and a highly-centralized productive apparatus are absolutely necessary. The time—which, looking back, seems so idyllic—is gone forever when individuals or relatively small groups could be completely self-sufficient. It is only a slight exaggeration to say that mankind constitutes even now a planetary community of production and consumption.

I have now reached the point where I may indicate briefly what to me constitutes the essence of the crisis of our time. It concerns the relationship of the individual to society. The individual has become more conscious than ever of his dependence upon society. But he does not experience this dependence as a positive asset, as an organic tie, as a protective force, but rather as a threat to his natural rights, or even to his economic existence. Moreover, his position in society is such that the egotistical drives of his make-up are constantly being accentuated, while his social drives, which are by nature weaker, progressively deteriorate. All human beings, whatever their position in society, are suffering from this process of deterioration. Unknowingly prisoners of their own egotism, they feel insecure, lonely, and deprived of the naive, simple, and unsophisticated enjoyment of life. Man can find meaning in life, short and perilous as it is, only through devoting himself to society.

The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor—not by force, but on the whole in faithful compliance with legally established rules. In this respect, it is important to realize that the means of production—that is to say, the entire productive capacity that is needed for producing consumer goods as well as additional capital goods—may legally be, and for the most part are, the private property of individuals.

For the sake of simplicity, in the discussion that follows I shall call “workers” all those who do not share in the ownership of the means of production—although this does not quite correspond to the customary use of the term. The owner of the means of production is in a position to purchase the labor power of the worker. By using the means of production, the worker produces new goods which become the property of the capitalist. The essential point about this process is the relation between what the worker produces and what he is paid, both measured in terms of real value. Insofar as the labor contract is “free,” what the worker receives is determined not by the real value of the goods he produces, but by his minimum needs and by the capitalists’ requirements for labor power in relation to the number of workers competing for jobs. It is important to understand that even in theory the payment of the worker is not determined by the value of his product.

Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.

The situation prevailing in an economy based on the private ownership of capital is thus characterized by two main principles: first, means of production (capital) are privately owned and the owners dispose of them as they see fit; second, the labor contract is free. Of course, there is no such thing as a pure capitalist society in this sense. In particular, it should be noted that the workers, through long and bitter political struggles, have succeeded in securing a somewhat improved form of the “free labor contract” for certain categories of workers. But taken as a whole, the present day economy does not differ much from “pure” capitalism.

Production is carried on for profit, not for use. There is no provision that all those able and willing to work will always be in a position to find employment; an “army of unemployed” almost always exists. The worker is constantly in fear of losing his job. Since unemployed and poorly paid workers do not provide a profitable market, the production of consumers’ goods is restricted, and great hardship is the consequence. Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all. The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions. Unlimited competition leads to a huge waste of labor, and to that crippling of the social consciousness of individuals which I mentioned before.

This crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career.

I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society.

Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?

Clarity about the aims and problems of socialism is of greatest significance in our age of transition. Since, under present circumstances, free and unhindered discussion of these problems has come under a powerful taboo, I consider the foundation of this magazine to be an important public service.

Awesomism

A realistic economics professor schools her naive, idealistic pupil on how awesome capitalism is compared to participatory socialism.

Why Is President Obama So Anxious to Cut Social Security?

Source: The Huffington Post

By Dean Baker

August 23, 2011

On his tour of the Midwest last week, President Obama again indicated his interest in cutting Social Security. He repeated a proposal that his administration first put forward in the debt ceiling negotiations: he wants to cut the annual cost of living adjustment by 0.3 percentage points.

This cut may sound small, but it adds up over time. A person in their 70s who had been getting benefits for ten years would see a reduction of 3 percent. By the time they were in their 80s, the cut would be 6 percent. And if they lived into their 90s, their benefit would be more than 9 percent lower as a result of President Obama's proposal.

For an average retiree who can expect to get benefits for 20 years, President Obama's plan would cut their lifetime Social Security benefits by roughly 3 percent. By comparison, his much feared tax increases on the rich would reduce the after-tax income of someone earning $300,000 a year by just 0.5 percent. In this case, a beneficiary who will be mostly dependent on their Social Security income in retirement will take about six times as large a hit relative to their income under President Obama's plan to cut Social Security than a couple earning $300,000 would from his plan to raise their taxes.

This cut to Social Security seems especially inappropriate since the near retirees who would feel the full impact of this cut have just seen most of their wealth destroyed by the collapse of the housing bubble and the plunge in the stock market. The typical near retiree (ages 55-64) has just $170,000 in net wealth, including the equity in their home.

This means that if they used every last penny in their 401(k) and other savings, they would have just about enough money to pay off the mortgage on a typical home. This would leave them 100 percent dependent on Social Security for their income. And of course, half of near retirees have less than this amount, meaning that they will not even be able to pay off the mortgage on a typical home. But apparently President Obama feels that these people need to make greater sacrifices.

The determination to cut Social Security is especially strange given the finances of the program. Under the law, Social Security is financed by the designated Social Security tax. It does not contribute to the deficit, since the law prohibits payments from being made if there is not money in the Social Security trust fund. That means that if the trust fund were drained, rather than contributing to the deficit, full benefits would not be paid.

And the date where this could be an issue is still relatively distant. The Congressional Budget Office just released new projections showing that the Social Security trust fund is fully solvent through the year 2038. Even after that date, the program would have enough money to pay 81 percent of scheduled benefits for the rest of the century. The folks who say that there will be nothing there for our children or grandchildren are just making it up or repeating the nonsense promulgated by some political hack.

Furthermore, this gap is not hard to close. Currently, the tax on the wages subject to the tax is capped at $107,000. The upward redistribution of income over the last three decades has caused a large share of wage income to escape taxation, as more money ends up in the pocket of CEOs and Wall Street types than ordinary workers. If all wage income were subject to the tax, then it would leave Social Security fully solvent for its 75-year planning period.

We could also go the route of increasing the tax on ordinary workers to cover the shortfall. After all, part of the story is that people are enjoying longer retirements, even if the wealthy have benefited much more from the increase in longevity than the typical worker. By 2040, average wages are projected to be 45 percent higher than today, adjusting for the impact of inflation. If just 5 percent of the projected wage growth over this period was used to finance Social Security, the program would be fully solvent for the rest of the century.

Most people would be surprised to know that 5 percent of the wage growth projected over the next three decades would be sufficient to keep Social Security solvent. After all, there is a well-funded and well-connected industry of people spreading disaster stories about Social Security and its massive deficit.
Many people will be taken aback by the idea of "projected wage growth," after all most workers' wages have been stagnant or falling in recent years. This is true. The projections refer to average wages, which had been rising, at least until the recession.

This brings up the fundamental point. The country has been and is getting richer. The reason that most people do not feel better off is that most of the money has gone to those at the top. Part of the reason is that they have been distracted by nonsense about the crushing burden of Social Security, so they have not paid attention to the policies that put more money in the pockets of the rich. Unfortunately, at the moment, President Obama seems to be working with the distracters.