This week, Joe Biden summoned 49 African presidents to D.C. for an international conference.
In doing so, the administration offered assurances (through National Security spokesperson, Jake Sullivan) that in contrast to previous gatherings, it would not scold or lecture Africa’s leaders about not obeying U.S. demands, e.g., in the United Nations. (There, by the way, just recently African leaders had to endure something like a schoolboy’s dressing-down when many abstained from supporting American resolutions condemning Russia’s invasion of Ukraine.)
Rather, Sullivan claimed that this time the purpose of the conference would be to listen respectfully to the leaders in question and to help them work out solutions to the continent’s problems on their own terms. Participants would be treated, Sullivan pledged, with respect and as equals.
The reason for the change in attitude? It’s that the United States finds itself currently locked in mortal competition for global influence with its chief rival, China. And, of course, that includes Africa.
There, the U.S. seeks not just access to the continent’s vast mineral and other resources, but also to Africa’s strategic geographical position and its market of over 1 billion consumers. The United States also wants to prevent spread of Chinese influence into what it and its European partners continue to understand as their inviolable post-colonial domain. For those reasons, it’s important to enter into agreements with nations such as the Democratic Republic of the Congo, with South Africa, Libya, Egypt, and Kenya.
But if that’s its goal, the United States has a problem that renders it virtually incapable of competition with China in Africa – or anywhere else for that matter.
I’m referring to U.S. ideology and its history.
As the world’s chief proponent of economic neoliberalism, the ideology of the United States makes it all but constitutionally unwilling to accommodate anything that smacks of socialism.
Relatedly, the U.S. track record shows that wherever there’s a whiff of leftist state ownership, market control, or increased taxes on the elite, Americans will predictably apply sanctions, engage in regime change, or even assassinate, or invade. Think of Egypt’s coup that stopped the Arab spring in its tracks. Think of Ghaddafi’s ignominious fate and of Mrs. Clinton’s epitaph on his behalf, “We came, we saw, he died. Ha, ha!”
All of Africa – all the Global South – remembers such disgraceful interference with their national aspirations.
On the other hand, the People’s Republic of China is hampered by no such limitations. After all, it is run by a party that calls itself “communist.” That party describes its own economy as “socialism with Chinese characteristics.” Its mixed economy has a huge section owned and controlled by the government. Its private sector is tightly regulated. China therefore has no quarrel with public ownership, market regulation, or with taxing the rich. It loves socialism.
Additionally, China’s track record has it freely cooperating with neo-liberal regimes, with despot kingdoms, and with other states aspiring to socialism. Compared with similar arrangements with the United States, China’s loan contracts, Belt-and-Road projects, and other agreements generally come with far fewer if any strings attached.
So, if an African country wants to follow China’s suit of socialism, its leaders will not have to fear sanctions or regime change, much less assassination or invasion from its international economic partner.
To repeat: that’s not the case in dealing with the United States. And that’s why the latter will never triumph in its Global South competition with China!
Last evening, my granddaughter, Eva (who’s about to celebrate her 14th birthday) and I had a remarkable hour-long conversation about economic systems. The topic was the focus of one of the classes she’s taking here in Spain, where the government is run by a coalition of socialists and rechristened communists (in a party called “Podemos” (“Yes, We Can!”). Whereas in the United States one can hardly use the word “socialism” without suffering opprobrium, I’ve learned that it’s the opposite here in Spain. Discussing socialism in clear and objective ways is de rigueur in school.,
Since Eva’s classes are in Spanish (and she’s only been here a couple of months), she had a hard time understanding the thrust of her teacher’s remarks and of observations by her fellow students.
So, Eva asked me about the differences between capitalism and socialism — a topic I’ve taught about and have tried to simplify or years and years.
She was very attentive as I shared what I know. Afterwards, we promised to continue the discussion. And to that end, I made up the following notes on the similarities and differences between capitalism, socialism, mixed economies, Marxism, communism, and fascism. I promised Eva that if she just understood and memorized what appears below in bold, she’d be streets ahead of most college students (and many professors!).
I sent her the notes with the following message:
Really enjoyed our discussion last evening. It drove me to compose the attached summary for you. Please study it. Bring your questions the next time we get together for a chat. Learn as much of it as you can. THERE WILL BE A QUIZ! I’ll expect ready answers to my questions.
Means of production = what produces consumer goods, viz., land, mines, forests, factories, oceans
Markets: Places where goods are sold and bought
Free Markets: No regulation. Anything (including people) can be bought and sold
Open Markets: Anyone can be a buyer or seller regardless of age or other restrictions
Earnings: Profit, income, wages. . ..
(An Economic System comprising the following elements)
1.Private ownership of the means of production
2. Free and open markets
3. Unlimited earnings
[In its pure form, this type of “free market capitalism” exists only in the illegal black market, where the Mafia, for example, sells anything (or anyone) without regulation or paying taxes. Note also that the three points indicated above summarize the ENTIRE economic program of the U.S. Republican Party that always seeks PRIVATIZATION, DEREGULATION OF MARKETS, AND LOWER TAXES.]
(The opposite of capitalism. It is an economic system comprising the following elements)
Public ownership of the means of production
Controlled or regulated markets
Capped or otherwise limited earnings (e.g., by income taxes).
[In its pure form, socialism does not and never has existed. That’s because ALL economies represent mixtures of capitalism and socialism. That is, they are “mixed economies.” The question is, “mixed in favor or whom — the rich or the poor?”]
(Economic systems embodying some elements of free market capitalism and some of socialism featuring the following elements)
Private ownership of some enterprises and public ownership of others [e.g., in the U.S. the government (i.e., the public through their elected representatives) is the country’s biggest landowner (through its national park system); it also owns the U.S. postal system, and the rail system. In many other “capitalist” countries, governments also own electrical grids, energy sources (such as oil), water supplies, and transportation systems (like airlines).
Some free and open markets and some that are regulated. [For instance, in the U.S., regulations insist that minors cannot buy tobacco products or alcoholic drinks. Restaurants must maintain standards of cleanliness or risk being closed by government authorities. The same with food factories.]
Limited earnings usually by a “progressive” income tax (meaning that those with larger incomes pay in taxes a higher percentage of their income).
Economies can be mixed in favor of entrepreneurs as in the United States (offering them government subsidies, tax breaks, and deregulation) or in favor of workers as for example in Cuba or China (offering them free healthcare, education, subsidized food and housing, etc.)
(The philosophy of Karl Marx, who was a socialist and a communist — see below.) His analysis held that
Capitalism necessarily exploits workers and the environment [“Necessarily” because the market system has workers competing with one another for scarce jobs. They therefore bid one another down as they seek employment until they end up working for the lowest wage possible. Also, few entrepreneurs seeking to maximize profits will ever voluntarily add costs to their production by protecting the environment (e.g., by adding scrubbers to their smokestacks or filters cleansing any effluents pouring into nearby rivers). Those who do protect the environment voluntarily drive up their costs of production and will be undersold and driven out of business by competitors lacking environmental consciences.]
The workers will inevitably rebel against such exploitation, replacing capitalism with socialism.
Socialism will eventually evolve into communism.
(A vision of the future embraced by some socialists.) All communists are socialists; some socialists are communists, most are Marxists who envision a future with
No classes (rich or poor)
No state (because they see the state as enforcing dictatorships – either the “dictatorship of the capitalists” (whereby a small body on boards of directors decide unilaterally on what is produced, where it is produced, and what to do with the profits) or the “dictatorship of the proletariat” (Marx’s term for the working class). Under the envisioned proletariat’s dictatorship, workers, e.g., through their labor unions, and as co-op owners of the means of production decide what to produce, where to produce it, and what to do with the profits.
Abundance for all
Police state capitalism. It is the form capitalism (or more accurately an economy mixed in favor of entrepreneurs rather than workers) tends to assume when it is threatened by socialist movements or by other malfunctions such as falling profits, widespread unemployment, high inflation, etc. It is:
Capitalism in crisis
Enforced on workers by police and military forces
Blaming “the usual suspects” for capitalism’s malfunctions (e.g., Jews, Muslims, terrorists, socialists, labor unions, communists, immigrants, asylum seekers, non-whites, women, the disabled . . ..)
Here’s a little experiment on my part — me sharing some thoughts about the world without writing them down. Just reflecting on life. Let me know if you think this is a good medium. More importantly, let me know your own thoughts on the topic I’m addressing. Thanks.
Yesterday, on “Democracy Now,” Amy Goodman reported good news for the poor countries of the Global South. In the news headline portion of her show , she said, “Cuba has pledged to donate 200 million doses of its COVID-19 vaccine to low-income countries in the Global South. The move was announced at talks hosted by the Progressive International and was heralded as a possible ‘historic turning point’ in the pandemic.”
You’d think that the announcement would be welcomed and celebrated everywhere and be given at least as much press coverage as the one-day protests in Cuba reported so breathlessly last November 15th. However, no such general celebration occurred. Even on “Democracy Now,” the story went undeveloped beyond the just-quoted headline. Meanwhile, in contrast to its hysteria over Cuban protests last fall, the U.S. government itself has been totally silent about this potentially game changing development.
Nevertheless, according to international health experts, Cuba’s achievement could make vaccinations much more available for example to 1.3 billion Africans whose continent has seen only 7% of its population receive even a single vaccination dose. (And this in contrast to 70% vaccination rates in richer countries.)
According to reports even on CNBC’s online source, the five Cuban vaccines in question:
Are a uniquely Cuban development among the former colonies
Have been administered in three doses to a higher percentage (86%) of Cuba’s 11 million people than in most of the world’s richest countries
Are not dependent on expensive mRNA technology using instead a “subunit protein” variety – like the Novavax vaccine
Are cheap to produce
Require no special refrigeration
Enjoy 90% effectiveness against all strains of COVID 19
Will have no patent restrictions on their recipes shared with low-income countries
Will be made available to them virtually at cost
Are a tribute to Cuba’s legendarily efficient health care system
Currently, Cuba’s prestigious biotech industry is awaiting approval for its vaccine developments from the World Health Organization. That approval is expected early this year. According to Helen Yaffee of the University of Glasgow, “. . . many countries and populations in the global south see the Cuban vaccine as their best hope for getting vaccinated by 2025.”
As for cost and distribution issues, John Kirk, professor of Latin American Studies at Dalhousie University in Nova Scotia added, “The objective of Cuba is not to make a fast buck, unlike the multinational drug corporations, but rather to keep the planet healthy.”
But in news cycles dominated by pharmaceutical corporations that refuse to waive intellectual property rights to their largely publicly funded products, such contrasting humanitarian consciousness goes mostly underpublicized and by such silence, denied.
Denial like that prevails despite the appeals for sharing vaccine recipes by the World Health Organization itself supported by civil society groups, trade unions, former world leaders, international medical charities, Nobel laureates and human rights organizations.
Part of the reparations due Cuba for 60 years of economic embargo and for silence about its achievements is to at last recognize its socialism as a force for global humanitarianism much more beneficial to the world than international capitalism.
Readings for Pentecost Sunday: ACTS 2: 1-11; PSALMS 104: 1, 24, 29-34; I CORINTHIANS 12: 3-7, 12-13; JOHN 20: 19-23
Today is Pentecost Sunday – the originally Jewish harvest festival that comes 50 days after Passover. The day’s readings remind us that from the beginning Jesus’ Jewish followers were working-class internationalists. Despite their lack of what the world calls “sophistication,” they recognized a unified divine order where barriers of language, nationality, and differentiating wealth were erased.
Before I get to that, let me connect that central fact with perhaps the prominent international and class-based concern in our contemporary context. I’m referring to the demonstrations in Hong Kong and an emerging new cold war between the United States and China. Our Pentecostal readings suggest we should be standing with the Chinese government and not with our own.
China and Hong Kong
Last week I shared a summary of an important debate about China between Matt Stoller and Kishore Madhubani. The debate’s question was: Is China merely a competitor of the United States or is it an adversary or even an enemy? Doesn’t China’s suppression of free speech and free press, of religion and of democracy make it an enemy?
My article held that, all things considered, China is a more genuine defender of human rights than the United States. I won’t repeat my argument here, but it turned on the distinction between bourgeois human rights (private property, contract observance, free speech, free press, and freedom of religion) and socialist rights to work, food, shelter, clothing, health care, and education.
Since the publication of my column, its relevance was highlighted by renewed demonstrations in Hong Kong. There despite a COVID-19 lockdown with its social distancing requirements, demonstrators came out in force last Sunday. They were protesting against new legislation in the territory that would allow officers of the law to arrest protestors for speaking out against the local government or authorities in Beijing.
Whom to Support?
So, the question became how should progressives respond? Even granted the distinctions between bourgeois and working-class rights, shouldn’t leftists seeking consistency and coherence, be on the side of the Hong Kong protestors? After all, they’re described as “pro-democracy.”
Despite such description, my answer would be a resounding “No.”
The main reason for my saying that is related to the class concerns reflected in the above distinctions between bourgeois and working-class rights. The fact is, all demonstrations are not the same. Some are organized against oppressive systems such as capitalism and its prioritization of wealth accumulation and contract obligations on the one hand and its marginalization of workers’ needs to eat, be decently clothed and housed, and to have dignified work and a healthy environment on the other. The Yellow Vest Movement in France and the Water Protectors’ demonstrations against the Keystone XL Pipeline in North Dakota offer examples of protests against capitalist exploitation.
In contrast, other demonstrations are reactionary and directed against specifically working-class reforms. Participants typically support colonialism and imperialism. The thousands in the streets of Hong Kong and Venezuela offer prime examples of such protests. Hong Kong protestors’ waving of Union Jacks signals their preference of the status quo ante of British colonialism. Their appeals for U.S. intervention (with U.S. flags unfurled) express support for imperialism.
(Of course, especially under the guidance of foreign interventionist forces such as the CIA and its sister National Endowment for Democracy (NED), other lower-class social forces such as unemployed and underpaid workers (Marx’s lumpen proletariat) can also be organized by their betters to direct their anger at the class enemy of their bourgeois organizers — in this case, the Chinese government in Beijing.)
The bottom line here, however, is that to be consistent, progressives must oppose not only prioritization of wealth accumulation by financiers, but also anything connected with colonialism and imperialism.
To repeat: not all demonstrations, not all clamoring for “human rights” are created equal. Class-consciousness provides an indispensable tool for distinguishing the causes and demonstrations that progressives should support from those we should oppose.
With all of that in mind, let’s turn our attention to the readings for this Pentecost Sunday. Let’s read them with the same class consciousness I’ve just referenced. Here are my “translations.” You can examine them here to see if I got them right.
ACTS 2: 1-11: Fifty days after Jesus’ New Manifestation as one with all the poor, executed and other victims of imperialism, his fearful working-class followers suddenly found themselves filled with the same consciousness Jesus had. They internalized the Master’s conviction that poor people like themselves could embody his vanguard consciousness heralding the completely new world order Jesus called God’s “Kingdom.” Suddenly on fire and filled with courage, these poor, illiterate fishermen electrified huge crowds from “every nation under heaven.” Despite language barriers their impoverished and oppressed audience understood that God was on their side.
PSALMS 104: 1, 24, 29-34: Jesus shared his Spirit with the poor in order to renew the face of the earth – this earth (not heaven above) filled with magnificent creatures of all types. They’ve all been put here to make everyone (not just the wealthy) happy and joyful. We who identify with the poor are entirely grateful.
I CORINTHIANS 12: 3-7, 12-13: It is the Holy Spirit of Jesus that makes us recognize that he, not any oppressive Caesar, is in charge here on earth. The Spirit’s gifts have been given for the Common Good not for private gratification or foreign control. In fact, all of us are one – as if we comprised a single body. Nationalities are irrelevant. Slavery of any kind is completely passé.
SEQUENCE: So, may we too receive Jesus’ Spirit this very day. May we recognize it in the poor, in our hearts, in the light of our new understanding, in the gifts we’ve received, and in just rewards for our labor. Yes, we’ve been wounded, desiccated and made to feel guilty. We rejoice to know that poverty and misery are not the will of some God “up there.” The Holy Spirit’s will is abundance for all. Thank you!
JOHN 20: 19-23: Following his execution, in his New (resurrected) Manifestation, the meaning of Jesus’ execution by empire became apparent. Having internalized his Spirit, his friends recognized his wounds as badges of solidarity with the poor, tortured victims of imperial powers. They threw off guilt and embraced world peace instead.
Think of today’s readings as they relate to Hong Kong. . . Though recorded two generations after the fact, the Jerusalem events portrayed were extraordinarily revealing. They had people of the lowest classes (no doubt, under the watchful eye of Rome’s occupying forces) – probably illiterates – claiming to be spokespersons for God. And this, not even two months after the execution of Jesus the Christ, who had been executed as a terrorist by Roman authorities. What courage on their part!
The readings, then, remind us of whose side the biblical All Parent is on. In contemporary terms, it’s not the side of financiers, bankers, imperialists or colonialists. Rather, it’s the side of those the world’s powerful consider their sworn enemies – the poor, illiterate, unemployed, underpaid, tortured and executed victims of colonialism and empire.
However, those latter categories represent the very classes that socialism (even “with Chinese characteristics”) rescued from their landlord oppressors in 1949 and that have been under western siege there ever since. Under socialism, the impoverished in China are the ones who have seen their wages and standard of living massively improve over the last thirty years.
Improvements of this type under communist leadership are totally unacceptable to the United States and the “allies” it has absorbed into what it proudly describes as its empire. That empire always opposes socialism and will stop at nothing to make it fail.
Such realizations lead to the following observations about Hong Kong in particular:
As shown by the display of Union Jack and American flags and by signs invoking the intervention of President Trump, the demonstrations in Hong Kong are neo-colonialist, neo-imperialist and neoliberal in their understandings of human rights.
They are seeking the bourgeois “democratic rights” that overridingly prioritize private property and the integrity of commercial rights over the socialist rights championed by the Chinese Communist Party—food, shelter, clothing, jobs, health care, and education.
The fact that ex-CIA chief, Mike Pompeo, is leading the charge in Hong Kong should give everyone pause. (This, especially in the light of Pompeo’s boast and endorsement of “lying, cheating, and stealing” as CIA standard operating procedure.)
In fact, and on principle, any Trump administration defense of human rights should probably drive those with social justice concerns to defend the other side.
Or at the very least, Pompeo’s and the Trump administration’s diverse response to demonstrations in Hong Kong on the one hand and to the (working class) Yellow Vests in France and to indigenous Water Protectors in North Dakota on the other, should raise serious questions.
The bottom line here, however, is that all demonstrations and protests are not created equal. The Pentecost gathering in Jerusalem was a poor people’s international meeting of “every nation on the face of the earth.” It celebrated the Spirit of a poor worker who was a victim of torture and capital punishment by imperial Rome. Its claim was that the Divine World Spirit is on the side of the imperialized, colonized, tortured and executed. “Socialism with Chinese characteristics” is far more in line with that tradition than is neoliberal capitalism.
Progressive followers and/or admirers of Jesus the Christ should keep that in mind as they watch events in Hong Kong unfold.
So now the word in the mainstream media (MSM) is that Donald Trump has successfully co-opted the so-called “American left.” After all, they tell us, he’s implemented Universal Basic Income (UBI); he’s promised to set up government hospitals to treat COVID-19 patients; he’s proposed delayed foreclosures and evictions and has strengthened unemployment measures for laid-off workers. Unwittingly, we’re told, he has become a “socialist.” And worst of all (for his opponents) under that new identification, his approval ratings have risen.
Does this mean he’ll be reelected next fall even though his handling of the coronavirus crisis has been abysmal? Remember: he mocked it at first. The testing kits he promised still haven’t materialized. And, as usual, his pathological duplicity makes it impossible for anyone to know what’s really going on in the man’s little head. Do his promises mean anything, or will they be rescinded tomorrow?
Nonetheless, there’s a grain of truth in his latest manifestation as socialism’s champion.
Additionally, if we understand fascism as “capitalism in crisis”, Trump’s co-optations can be unmasked as mirroring faithfully those of his forebears in that system. And finally, there’s hope to be found in the president’s rising numbers.
To begin with, it must be acknowledged that all of the above (UBI, government-sponsored healthcare, policies preventing homelessness, and unemployment insurance) are indeed key planks in any socialist platform.
At the same time, it is also true to say that the president has very little choice in the matter. History has shown that in circumstances like these, heads of state interested in self-preservation and regardless of their ideological propensities, best serve their interests by intervening in the marketplace on behalf of their official constituents.
Put otherwise, the crisis at hand has once again exposed the fact that capitalism’s regular-as-clockwork systemic dysfunctions can only be remedied by socialist programs. (There are no exceptions to that rule.) That’s because government-coordinated socialism is far more efficient in addressing pressing crises than the necessarily disjointed, atomized and uncoordinated capitalist responses. This has been demonstrated most recently by China’s quick success in dealing with COVID-19.
In reality, however, Trump’s proposals are far from genuinely socialist. To begin with, ALL of them are emphatically temporary. His version of UBI are intended to last a month or two; his government hospitals are narrowly targeted at coronavirus patients (all others are still on their own and at the mercy of giant health insurance and pharmaceutical conglomerates); the evictions and foreclosures will resume when the current crisis has passed. Republicans will also reprise their attacks on unemployment insurance (and Social Security) when and if we return to “normal.”
By way of contrast, socialism’s remedies are permanent; they represent once-and-for-all transformations of the reigning economic system. Socialism is about Medicare for All, affordable housing, rent-control, job guarantees and adequate wages.
Moreover, socialism is an international movement of working-class people. Its philosophers — those who favor the working classes instead of their exploiters — are the ones our educational system of indoctrination has taught us to hate. We’ve been taught to despise Karl Marx, but to love Milton Friedman. Despite our ironic distaste for them, our class’ philosophers have always addressed themselves to “the workers of the world.”
Today’s socialists recognize what the coronavirus crisis has laid bare, viz. that even apart from present circumstances, we’re all in this together. Socialists also see clearly that our common enemy is the greed and self-centeredness that globalized capitalism itself has forced on our employers. Without heartless devotion to the “bottom line,” virtually none of those we work for would ever survive under free enterprise competition that rewards and necessitates starvation wages for so many and environmental devastation for us all. The system has made our employers our mortal but largely unrecognized enemies.
As opposed to socialism’s internationalism, Trump is a nationalist. Recall his inaugural proclamation, “From now on it’s only going to be America First, America First.” Nothing could be further from the ideals of citizens of the world. That is, insofar as circumstances have forced socialism upon him, Herr Trump is a National Socialist.
And that’s exactly what the fascists who came to power in the 1930s were. They were National Socialists in contrast to the international socialists and communists they hated so fiercely. In fact, Trump’s nationalism and his attempts at co-opting socialist policies to mollify a rebellious populace represents his tearing a page right out of Mein Kampf.
Think about it. As already mentioned, fascism is best defined as “capitalism in crisis.” Or as Benito Mussolini described it more exactly, fascism is corporate capitalism united with state power. In ultimate form, it enforces its order through a police state armed against its traditional enemies, viz. communists, socialists, labor organizers, Jews, non-whites, the disabled, immigrants, gypsies, etc. All those scapegoats receive blame for the inescapable inefficiencies and dysfunctions of the newly christened old system. All of them found places in fascism’s death camps.
Why then the name-change in the 1930s? Why the “National Socialist German Workers’ Party?” It’s because the Great Stock Market Crash of 1929 and the depression that followed had completely discredited capitalism. No one wanted to be associated with it any more than (until recently) people wanted to be associated with socialism and Marxism after the fall of the Berlin Wall. Following the Crash everyone, left and right, claimed to be some kind of socialist.
It’s similar today, even though the name itself is not yet so much in fashion. Still, socialist policies are much in favor among the American people. A solid majority wants Medicare for All. The Fight for $15.00 minimum wage is extremely popular among wage workers. In this age of climate chaos, environmental protection laws receive widespread approval. The same is true for free college education and forgiveness of student loans. And Social Security remains the most popular program ever instituted by the federal government.
More particularly, at this time of corona crisis, people need money to pay their bills. They want those monthly checks. Under the threat of COVID-19, they don’t want to worry about deductibles and co-pays. They need rent relief.
Hope behind Trump’s Ratings
All of that is hopeful. Any rise in Trump’s approval ratings because of the policies just reviewed reveal that Americans favor what the Republican Party is ideologically incapacitated to provide. Republicans will never permanentize the programs we all want.
And if they do, that’s o.k. too. Whether a red administration or a blue one meets genuinely human needs is beside the point.
More likely, however, the temporary programs currently receiving approval simply describe for true socialists (whether they embrace the name or not) the policy trajectories they must follow, propose, fight for and finally implement. Now’s the time to insist on a Green New Deal.
Last Tuesday (March 10th), opinion columnist, Thomas Friedman published and OpEd In the New York Times. It was entitled “Joe Biden, Not Bernie Sanders Is the True Scandinavian.”
There, Friedman argued that despite Mr. Sanders’ frequent references to Denmark as the standard for “democratic socialism,” the country is actually a hotbed of free market capitalism. Hence, Biden’s more balanced views on trade, corporations and unions make him more “Scandinavian” than his rival. Hence too, Biden’s free market capitalism is vastly preferable to Sanders’ socialism with its proposal of a totally planned economy.
To prove his point, Friedman’s crucial focus was not so much on Denmark as on three well-worn rhetorical questions addressed to the senator from Vermont:
Does money grow on trees or does it come from heroic capitalist risk-takers who deserve their profits because of the jobs they provide? And shouldn’t they be rewarded accordingly?
Aren’t at least some capitalist entrepreneurs admirable, or are they all examples, as Sanders would have it, of “corporate greed and corruption?”
What’s better at producing jobs and prosperity, a free enterprise economy or one based on central planning? (It was here that the question of Denmark came sharply to the fore.)
All three questions were entirely disingenuous and misleading. Let me explain.
In Praise of Risk Takers
To begin with (and to answer Friedman’s first question) money obviously doesn’t grow on trees and capitalist risk-takers do, of course, play an important role in the provision of jobs and prosperity. And risk deserves corresponding reward. All true.
However, what Friedman neglects to mention is that capitalists aren’t alone in highly productive risk-taking. No, far from being passive beneficiaries of entrepreneurial courage and largesse, workers and the risks they take clearly confer huge benefits on their employers. Hence, if their employers’ gambles deserve reward, so do their own.
By this I mean not only the obvious – viz. that capitalist enterprises would never succeed without workers. I mean as well that the capitalist system actually forces employees to be more adventuresome risk-takers than their employers. While the latter typically risk only their money, workers within the system risk their very lives and the existential welfare of their families.
Think about it. In preparing themselves to enter the world of work, college students bet four years or more of their lives as well as thousands of dollars in borrowed money on the wager that their “major” (be it Economics, Business, English, Math, Science, Pre-Med, etc.) will actually someday land them a job. That’s a gamble that benefits not only employers, but the rest of us as well.
Moreover, if they’re fortunate enough to land a job, the graduates’ work often forces them to change location to places far from their families and friends. That too involves leave-takings, courage and high-stakes risk.
And if their gamble does not pay off (unlike their employers) there’s no Chapter 11 for them to invoke. Thanks to politicians like Joe Biden, they still have to pay back those college loans, and/or live far from the support of their extended families.
It’s similar for those who do not go to college. Every day, countless numbers of them risk their very lives in jobs whose dangers are far more threatening than losing money in a failed business venture. So, if roofers fall from a great height, if fishermen are swept overboard, or if carpenters cut off a finger or hand, they often have no benefits to sustain them while recovering or to insure their eventual return to the workforce. All of that represents acceptance of risk that benefits employers. It contributes far more to economic prosperity than dangers involved in the process of securing loans in the comfort of a banker’s office or in a simple telephone call.
So, no, Mr. Friedman, money does not grow on trees. It comes from employers risking their money. However, in at least equal measure it derives from the risks taken by their employees. The latter deserve guaranteed reward that can fittingly come from government’s repaying them with as much abundance as it currently extends to their employers.
A Corrupt System
As for Friedman’s question about greed and corruption. . . Is Sanders correct in saying that all capitalists are somehow consumed by avarice?
Of course not. And it’s clearly deceptive to accuse Mr. Sanders of saying so. And this even though we have ample evidence that many capitalists (including our current president) are indeed wildly greedy and deeply unethical.
The truth is that many more of them are no more acquisitive and dishonest than the rest of us.
However, the capitalist system itself is indeed corrupt. That’s because it rewards immorality in the form of underpaying workers, environmental destruction, and acceptance of huge income inequalities in the face of widespread hunger and poverty.
For starters, consider how the dynamics of an unregulated wage market forces workers to accept the lowest remuneration possible. This is especially true in job categories deemed “unskilled.” Because of such classification, and absent minimum wage guarantees, capitalist theory rewards such occupations (belonging to waitpersons, cleaners, grocery clerks, vegetable pickers, etc.) with wages as close as possible to what’s absolutely necessary to keep body and soul together. (It’s why, for instance, Wal-Mart workers often end up qualifying for food stamps – a form of socialism, as Mr. Sanders rightly observes.)
Generous employers who decide to exceed the market-determined minimum will typically find themselves undersold by competitors who more obediently follow the dictates of unfettered markets. Because of wage differentials with their rivals, the generous ones will soon find themselves shuttering their enterprises and witnessing from afar the success of their more tight-fisted counterparts.
It’s similar with the environment. Competitive market forces reward producers who choose to externalize their costs. Meanwhile, market forces penalize conscientious manufacturers who for example, put scrubbers on their smokestacks or filters on corrosive effluents otherwise polluting nearby bodies of water.
This is because the use of environmentally friendly technologies cost money. They necessarily raise costs of production. They disadvantage those who implement them as they compete with their marketplace opponents who lack environmental conscience. Such destructive outcomes result not from personal greed and corruption, but from systemic failure.
And finally, in an unregulated market, the underpayment of workers along with the externalization of environmental costs (as well as colonial theft of resources) inevitably and historically results in wide income gaps that can only be described as unconscionable.
To illustrate this point, it suffices to cite a single now-familiar statistic that Mr. Sanders often does call out: three American entrepreneurs own as much wealth at the bottom half of U.S. wage earners. And this in a context where an estimated 48.8 million Americans, including 16.2 million children, live in households that lack the means to feed themselves on a regular basis.
Almost anyone with a conscience would be justified in calling such a system “greedy and corrupt.” However, the application of those epithets is justified not principally by the shortcomings of entrepreneurs, but by the capitalist system itself.
Capitalism vs. Socialism
And that brings us to Thomas Friedman’s final question to Bernie Sanders. Despite its acknowledged shortcomings, isn’t capitalism the best we can do? Is Sanders really claiming that planned economies are more productive than their free market alternatives?
Of course, Mr. Sanders says no such thing. This is because despite their rhetoric of “democratic socialism” and “free market economy,” the senator from Vermont no more champions an entirely planned economy than Friedman does an economy without any regulation at all.
In reality, both have no alternative but to advocate some form of mixed economy. That’s because mixed economies are the only game in town. Except for black markets (which almost everyone recognizes as criminal), no economy in the world can function without heavy regulation. And Mr. Sanders’ version of “democratic socialism” is nothing more than Rooseveltian New Dealism, which ironically was required during the 1930s to save capitalism itself.
More specifically, the New York Times columnist praises Denmark’s “broad social safety net” its “expanded welfare state, high level of taxation, as well as its spirit of cooperation between all stakeholders. All these taken together with free markets explain for him the country’s enviable living standards.
For his part, what Sanders demands repeatedly is not the dissolution of corporations, but that they play by the rules and pay their fair share of taxes.
None of this implies however that Friedman and Sanders want the same mixed economies.
Instead, they differ in argument about whom the economies they favor should be mixed in favor of. Friedman wants an economy mixed in favor of the opulent risk-takers he lionizes along with the rest of mainstream media and education. Ignoring worker risk-taking, he evidently believes in shopworn trickle-down theory.
Nevertheless, Friedman’s economic class has shown again and again that it is not averse to socialism when the stock markets crash, when their opulent sea-side homes are destroyed by natural disasters, or when national survival demands “war socialism” complete with ration cards and patriotic slogans about sharing.
Sanders on the other hand, wants an economy mixed directly in favor of working classes and the impoverished. Rather than trickle-down, his ideal might be called percolate-up. It’s a theory that (in watered-down form) has actually worked throughout Europe in the form of post-WWII welfare states, in Denmark, and (yes!) in the United States under FDR.
So, what’s the formula that might deliver the world from the ills of low wages, environmental destruction, and huge income gaps between rich and poor?
In the light of the inevitability of mixed economy, any answer to that question must strike a compromise between economies mixed in favor of the rich and those mixed in favor of working classes and the poor.
The formulation of that compromise would run as follows: “As much market as possible with as much planning as necessary.”
Yes, maximize incentives that might motivate capitalists to innovate, produce, and create jobs. That’s what Thomas Friedman, Joe Biden, and Denmark’s entrepreneurial classes seek.
But also recognize and implement the interventions in the marketplace necessary to ensure the emergence of a world with room for everyone. That’s really all Bernie Sanders is after: As much market as possible, with as much planning as necessary to ensure that kind of capacious planet.
In the end, this is not a debate about who or what is more Scandinavian. It’s about recovering what experience under FDR and Europe’s welfare states have shown is entirely feasible.