Democratic Socialism in the Era of Ocasio-Cortez and Sen. Sanders

Democratic socialism has been more in the news lately since the most popular American politician — Senator Bernie Sanders — and a rising star in the progressive movement, Alexandria Ocasio-Cortez (who won an upset victory in a primary vs. an incumbent New York House politician) both profess to be democratic socialists. With this being the case, it is worth examining what the ideology represents and how it’s being used.

Democratic socialism (at least by what it should mean by definition) at its core means the democratic control over the means of production. This would mean that instead of institutions such as factories, banks, and media companies being controlled primarily by a small group of (often wealthy) people pretty much functioning outside of democratic controls, there would be much more stakes of shared ownership among the public. Under such an ideology, many more people would, for example, have the authority to join together and hire and fire their managers instead of the other way around.

When Ocasio-Cortez and Sanders mention democratic socialism though, they don’t usually say much about democratizing the distribution and organization of production. In truth, what they’re usually referring to is what’s called social democracy — letting the means of production still be controlled pretty undemocratically in capitalistic fashion, but at least in a way that also includes significant government intervention benefits for the general public. This includes a national healthcare system (which all OECD countries besides the U.S. and Mexico have), decently high taxes on rich people, educational costs being covered by the government, and a variety of other social programs such as paid maternity leave.

In the United States, subscribing to social democracy is often regarded as being pretty far left on the political spectrum. This is really just a reflection of the immense rightward shift of U.S. politics since the 1970s though. For one example, Republican president Dwight D. Eisenhower of the 1950s was a strong supporter of both unions and the New Deal social welfare programs implemented under president Franklin Roosevelt. Eisenhower said that those who didn’t accept the New Deal programs didn’t belong in the political system, but not accepting those programs has now become the norm among Republicans and among many Democrats as well. That Eisenhower would today be regarded as clearly on the left side of the political spectrum truly says a lot about American political discourse.

In terms of socialism, older Americans tend to associate socialism with the Soviet Union. The problem with that is that the Soviet Union practiced state socialism — there wasn’t any democratic distribution of resources there. The Soviet Union was in large part a dungeon for a lot of its people that provided some minimum subsistence benefits to let many of them survive.

And it should be noted that the achievements of the Soviet Union were when it was able to use the power of the state to direct people and resources to useful developmental ends, such as its space program. In the 20th century, it grew quickly from a largely poor and illiterate society that had been invaded multiple times to a world superpower for a few decades, and whatever criticisms of the USSR, there is something to be learned there. It’s a similar parallel to why China has grown and continues to grow as fast as it does — a fairly efficient use of resources (evidently quite powerful), even if the conditions that’s done under happen to be cruel.

The Soviet Union replaced the employers that hold so much power in capitalism with state officials. This didn’t change the fundamental dynamic of workers being quite disempowered, and in many ways made the situation in the Soviet Union worse than it would have been under capitalism. Democratic socialism seeks to absolve the everlasting struggle between the employer and employee, those who own and those who don’t, and in truth the ideology has never been tried much at scale. There are reasons to think that it would be a better way to organize society, such as research showing that today’s employees become more productive when given more autonomy, but there isn’t enough data to know for sure. The experiment of having a large worker cooperative sector of the economy could be run, just like the massive experiments of tax cuts for the rich have been run multiple times, although that’s obviously rather dangerous — it may actually provide a significant benefit to the lives of average working people.

It should also be noted how puzzled some people in the media are by young Americans’ embrace of socialism over capitalism. A now well-known Harvard study that was conducted in 2016 — and was redone once since the ones commissioning it were stunned at the results — showed that 51 percent of young Americans rejected capitalism and 33 percent preferred socialism.

This isn’t really an acceptance of socialism — it’s more of a rejection of capitalism. Young people in general have a vague awareness that the system isn’t working real well for them. Letting the money speak, real wages (wages with respect to inflation) in the United States have been almost entirely stagnant for decades. The only times most workers have seen real wage gains since the late 1970s have been in the later 1990s and over some of the last several years. Both of these periods had tight labor markets from the Fed allowing interest rates to remain low. In the 1990s it was because Alan Greenspan was a somewhat atypical economist and, for some reason, bucked the mainstream of his profession by allowing interest rates to remain low — in other words, something akin to dumb luck. In recent years it was because the Great Recession forced the Fed to drop interest rates to zero and near zero in order to provide a stimulus to the economy (in other words, a massive disaster had to happen).

Additionally, it’s probably pretty irrational to regard capitalism as the only or most viable economic system. It’s just an economic system, but those who reject it are often deemed heretics. In America there are plenty of debates, but for a few generations at least, the debate over the fundamental distribution of resources has been to a significant degree left out.

One view on that though is that this debate between capitalism and a different economic system isn’t really necessary or prudent, and that it would be better to have the debate over how markets are structured and to advocate for structuring them in ways that don’t redistribute income upward. Good Keynesian economists that primarily represent the working class may tend to advocate this view. That may admittedly be a better way to help the modern working class, but will there nonetheless be a massive cost to future generations if capitalism is maintained?