US debate on Socialism: What is Socialism?

Capitalism isn’t working. This is the conclusion being drawn by increasing numbers of workers and young people as seemingly every week a new crisis dominates the headlines.

These calamities include the deepest economic crisis since the Great Depression, which has left millions unemployed; the BP oil spill and the growing threat of global warming; an escalating disaster in Afghanistan; and vicious Islamophobia and racist scapegoating of immigrants.

At the same time a tiny elite continues to accumulate unfathomable levels of wealth and power. While we face devastating budget cuts in education and crucial social services, the super-rich get bailouts and bonuses.

Income inequality in the U.S. is at record heights with the richest 1% of households now owning more wealth than the bottom 90% combined.

It is against this background that a series of polls have shown a growing opposition to capitalism and support for socialism in the U.S. A May 4 Pew poll found that only 52% of Americans said they supported capitalism, while 29% reacted favorably to socialism.

But among people 18 and 30 years old supporters of socialism and capitalism were evenly divided at 43% each! Similarly, support for socialism was dramatically higher among blacks, women, and low-income groups.

This growing interest has taken place in the face of a constant media barrage of free market propaganda and slandering of socialism, despite all the claims about the supposedly innately conservative nature of American workers.

Ironically, it is thanks to the rantings of right-wing blowhards like Glenn Beck and Fox News that “socialism” has been reintroduced into the popular discourse. Fox and the Tea Party have denounced Obama and any government intervention into the economy from the stimulus to healthcare reform to the Wall Street bailout as “socialism!”

Bitter hatred of these free-market fanatics goes a long way toward explaining the new openness to socialism. For many workers and young people it is enough that Glen Beck and Rush Limbaugh are virulently opposed to socialism to sense it must be something good!

Free Market Failure

But the growing interest in socialism has deeper roots that just a backlash to right-wing denunciations. The meltdown in the world financial system in 2008 represented a huge blow to the credibility of the “free market.”

The ideologues of capitalism had their way for the last 30 years. Across the world, nearly every ruling party embraced the ideology that governments should refrain from regulating businesses and that everyone should fend for themselves. Corporations enjoyed free trade, lower taxes, and weakened unions. And what was the result? They plunged the world into the worst economic crisis since the Great Depression.

Despite this Wall Street has continued to lavish its executives with billions in bonuses. A recent report by the Boston Consulting Group revealed that the rich got even richer during the economic crisis, with the worldwide net assets of private investors increasing 11.5% to $111.5 trillion in 2009!

The recent BP oil spill graphically exposed to millions the insatiable greed of big business. In order to save around $500,000, BP, the 4th largest corporation in the word, cut corners on safety in their Deepwater Horizon drilling rig leading to the death of 11 workers, unimaginable environmental damage to the Gulf Coast, and billions in economic losses.

While BP is a particularly extreme case, does Wall Street or Wal-Mart really behave any differently? In reality their conduct is symptomatic of the underlying logic of capitalism that big corporations are compelled to follow: maximize profits at all costs, regardless of the social or environmental consequences.

What Socialism is Not

These developments are breaking down illusions in capitalism. But while interest in socialist ideas has been growing there is widespread confusion about what exactly socialism means.

Much of the media portrays Europe as socialist due to the existence of a stronger welfare state and more government regulations than in the U.S. However, this is far from the truth. The gains won by workers in Western Europe such as universal healthcare and free higher education were major steps forward, but they were reforms that still left the underlying capitalist system intact.

These reforms were the by-product of massive struggles of the working class. This often included the election of mass workers’ and socialist parties. Under this pressure the ruling classes of Europe were forced to concede reforms in order to avoid their system, capitalism, being overthrown. But over the past 30 years they have gone on a counter attack, ruthlessly dismantling the previously won social services and higher living standards workers had won.

Obama a Socialist?

It is also often claimed that the bailouts of Wall Street, the nationalizations of banks and GM, and Obama’s stimulus measures were socialist measures.

In reality when the world economy went into a free fall in 2008 pro-capitalist governments around the world, including Bush and later Obama, had little choice but to take these actions.

While this represented a sharp break from the ultra-free market orthodoxy of the previous 30 years (neo-liberalism), it was not a turn towards socialist policies. Big business in the U.S. and around the world was forced to resort to state intervention to save the capitalist system from a devastating economic crash along the lines of the 1930s and to avoid deep political and social upheavals that could threaten their rule.

Obama himself has been quite clear that his policies are aimed at defending capitalism. In an interview with Business Week he said “You would be hard-pressed to identify a piece of legislation that we have proposed out there that, net, is not good for businesses… We are pro-growth. We are fierce advocates for a thriving, dynamic free market” (, 2/10/10).

The majority of U.S. public can see this. A January CNN poll found that 60% believe “Obama has paid more attention” to the needs of banks than to “the problems faced by middle-class Americans,” compared to just 28% who think the opposite.

The Case for Socialism

While voices on the right decried Bush and Obama’s massive bailout of Wall Street as “socialist,” real socialists were actively campaigning against it, explaining that it amounted to a giant handout to those who had created the crisis.

Some banks and companies like GM may have been nationalized, but it was a form of “capitalist nationalization,” carried out to rescue failing companies and socialize their losses with the aim of selling them back to the capitalists once they return to profitability.

In contrast “socialist nationalization” would have started with the premise that the owners of the big banks and corporations, which were facing bankruptcy and threatening to bring the entire economy down with them, had shown they were incapable of properly managing these crucial resources. We called for failing companies to be taken into public ownership, under the democratic control of elected representatives of workers, consumers, and the public at large.

Compensation would be given to the former owners only on the basis of proven need. So millionaire speculators and capitalists would have to swallow their losses, rather then being bailed out, while ordinary people who owned some stock in these companies would be compensated.

Another essential response to the economic crisis would be massive public works programs to create jobs for the unemployed developing renewable energy, expanding public transit, rebuilding our infrastructure, schools, and health care system, etc. We also fight for an end to the wars in Iraq and Afghanistan, raising the minimum wage to $12.50/hour, universal single-payer health care, and free high-quality education for all from pre-school through college.

With genuine socialist policies, the publicly owned GM could have been re-tooled (as was rapidly done throughout the U.S. economy during World War II) to build wind turbines, solar panels, and buses and trains that are urgently needed for the large scale development of renewable energy and mass transit. This would create millions of jobs and make a real difference in combating global warming.

Instead, the Obama administration left GM organized around the needs of the auto market, which faces massive overcapacity.

So the solution, on a capitalist basis, is for massive downsizing of the industry, meaning plant closures and mass layoffs. GM has laid-off thousands of workers and demanded the remaining workers agree to huge cuts in wages and benefits. This is the irrationality of “market efficiency” – destroy productive resources and leave tens of millions out of work in order to re-establish the basis for profitability.

Socialism, based on rational economic planning, would do the opposite. It would bring the world’s resources in alignment with the needs of society, for example putting the unemployed to work utilizing the technology and capital in the auto industry to address pressing social and environmental needs.

Democratic Planning

Through public ownership of major corporations an economic plan to benefit all of humanity could be developed through democratic debate and discussion throughout society.

Democratically planning the economy would allow for the elimination of the massive wastage that results from the anarchic nature of capitalism. For example the advertising industry, which amounts to $1 trillion per year globally, serves no social use except to create artificial “needs” or pretend re-branded products are somehow new and different. These huge resources could be redirected under socialism towards socially useful purposes, and the industry replaced with simple catalogs reviewing available products.

Even more is wasted each year on military spending, which is a result of intense global competition between the capitalists and nation states. Worldwide, nearly a third of all scientists and engineers in research and development are employed in the military. Global military spending reached the grotesque level of $1.5 trillion in 2009. Despite being elected as an antiwar president, Obama has increased Pentagon funding to $717 billion for 2010, breaking the previous record set by Bush (

At the same time 2.6 billion people – almost half the world’s population – are struggling to survive on less than $2/day. Meanwhile the world’s 200 richest individuals own more wealth than these 2.6 billion people combined (World Bank Development Indicators, 2008).

Given the massive leaps forward in technology and economic productivity over the past two centuries there is no reason why half the world should suffer in such poverty. The United Nations, in fact, “estimated that the additional cost of achieving and maintaining universal access to basic education for all, basic healthcare for all, reproductive care for all women, adequate food for all, and safe water and sanitation for all is roughly $40 billion a year,” (UN Human Development Report, 1998).

This shows that poverty is not caused by a lack of resources, but by the way the capitalist system distributes those resources. But more than simply ending the gross inequality of capitalism, a democratically planned economy would be able to enormously increase society’s productivity. On the basis of co-operation rather than competition, significant advances could be made.

For example, in the pharmaceutical sector there are a small number of major companies internationally. Currently they invest in research aimed at developing the most profitable (not most necessary) drugs quicker than their rivals – meaning an expensive race to develop the latest slightly better form of Tylenol.

On the basis of socialist co-operation, the research would be shared and priorities would be shifted, with a new focus on developing those drugs and medicines that would save lives and improve quality of life for millions around the world.

Genuine Democracy

Our political system is increasingly being exposed as a sham democracy. How can there be any real democracy when the richest 1% owns more wealth than the bottom 90%? This allows the rich elite to dominate the political system and manipulate public opinion through their ownership of the mass media.

Socialism would mean a massive expansion of democracy. Instead of simply voting for representatives every few years, while the real decisions are made behind the scenes in corporate boardrooms, socialist democracy would bring collective decision making into the day-to-day functioning of every workplace, neighborhood, school and university. Elected workplace committees would replace bosses.

Neighborhood, workplace, and school councils, holding regular meetings, would send representatives to expanded city and regional councils. In turn, such regional councils would elect national representatives.

A socialist democracy would have nothing in common with the dictatorial bureaucracies that presided over the Soviet Union and other “communist” regimes. Although these Stalinist countries had elements of a planned economy, working-class people did not democratically control society. Instead, the corruption and repression by the ruling bureaucracies ultimately led to economic collapse and mass rebellion by workers and youth.

To avoid corruption, socialists believe it is vital that all public officials be elected, be paid no more than the wage of the average worker, and be subject to immediate recall. Imagine if voters had been able to recall all the politicians in Congress who voted for the Iraq war, the Patriot Act, or the bank bailouts!

Join the Socialists!

Mass working-class action is necessary to replace an outmoded, inefficient, and wasteful system, capitalism, with a democratic, socialist, planned economy.

By full involvement of working and middle-class people through popular control and management of industry and society, we can begin the rational organization and planning of the resources of society for all.

To do this will require building a massive movement of workers and youth to fight for a socialist alternative. Already, we have seen mass demonstrations and revolts in many countries across the world. Greece has been hit with a tidal wave of struggle, with six general strikes in 2010, and the country nearing a social explosion. There have also been massive demonstrations and strikes in France, Italy, and Spain this year.

In Latin America, there have been mass movements in Venezuela, Bolivia, Mexico, Ecuador, Argentina, Chile, and elsewhere over the past few years and a re-emergence of anti-capitalist and socialist ideas.

In the U.S. we have also seen an uptick in protests over the past year, with a significant struggle against budget cuts in higher education in California and spreading across the country, a series of protests for immigrant rights and against the racist anti-immigrant law in Arizona, and a growing LGBT rights movement. This has reflected the growing realization that we need to organize and fight for our interests rather than waiting for Obama to solve things for us.

These movements are only the tip of the iceberg of what we’ll see in the coming years. These struggles, along with the conscious intervention of socialists, will lead increasing numbers of workers and young people to explore the ideas of genuine Marxism (not the perversion found in the Stalinist states), where they will find a real explanation of the systemic causes of the current crisis.

To anyone interested in building a fight back against big business and capitalism, we urge you to get active with Socialist Alternative. Join us in the fight for a world free of poverty, exploitation and war – a world that works for people. Join us in the struggle for a democratic socialist future!

In Their Own Words

“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.”

Albert Einstein

“You can’t talk about solving the economic problem of the Negro without talking about billions of dollars. You can’t talk about ending the slums without first saying profit must be taken out of slums. You’re really tampering and getting on dangerous ground because … you are messing with captains of industry… we are saying that something is wrong… with capitalism… maybe America must move toward a democratic socialism.”

Martin Luther King, Jr.

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