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The Scholar Responds

Socialism’s Empty Promises

David Davenport is a research fellow at the Hoover Institution and the coauthor of  Rugged Individualism: Dead or Alive?

The video “Socialism’s Empty Promises” references a Gallup poll that shows 35 percent of Americans have a favorable opinion of socialism. That number is even higher for younger Americans. David Davenport responds to questions and comments from the video below.

Q: These Americans aren’t supporting socialism, they’re supporting “democratic socialism.” What does “democratic socialism” mean to you?

I think it is helpful to understand what people are reacting to when they say they support socialism or democratic socialism. I think they’re responding to what they see as the excesses of capitalism, particularly the financial crisis and the problems that arose from the recent recession.

My generation was running away from socialism and communism and running toward capitalism. That informs how we think about socialism. But think about the younger generation and the experiences they’ve had. They have the housing market crash, they have high student debt, they see income inequality–all things that have been prominent for them, especially since 2008–and so they’re reacting to capitalism. They’ve put a label on it, but I’m not sure the label is accurate.

“Democratic socialism” does have a meaning, even though recently there has been an effort to reinvent it. “Democratic” refers to a political system and “socialism” to an economic system with its own set of questions. Under socialism, the means of production are owned and operated by the state–think industries and businesses. The democratic part in this context means that it’s done voluntarily. We decide as a people, on our own or through our elected representatives, that we want the state to run the means of production. It doesn’t come about from a revolution, like in the Soviet Union or Cuba or even Venezuela, where someone comes into power and upends the system. Democratic socialism is a system in which we as a people make the decision to go in that direction.

Misconception: We’d have a better system under democratic socialism because the economy would be run democratically.

Well that doesn’t seem feasible, at least in this country. “Democratic” control over the economy, even in tiny countries with homogenous populations doesn’t work, much less in our enormous and diverse federal republic.

Why isn’t it feasible? Well, it would mean suspending property rights and many other basic rights that have become well established in the United States over hundreds of years. There are other ways to soften the excesses or failures of capitalist markets without weakening private property or preventing businesses from making decisions.

We should ask those who say they’re for socialism or democratic socialism if they’d prefer that their favorite companies make decisions about what products to make and sell or if the government is better suited to respond to market forces and customer feedback to make those decisions. I think we know what the answer will be. Socialism–true socialism–moves us in a direction they’re unlikely to support.

Q: What do you think people who support socialism actually hope to see happen?

I think what most people have in mind when they say they support socialism is an expansion of the welfare state. I think they want a kinder and gentler economic system than pure capitalism, and they are perhaps concerned about helping those who don’t do so well in the current system. They would like to help people with more safety nets and more programs like free education or health care. But that’s not necessarily socialism. Even the prime minister of Denmark, the country many people hold up as an example the United States should emulate, had to step in and clarify that it is not a socialist state. It’s a free market economy with a large welfare state.

To be fair, another group of people might actually support the government taking over more industries or niches of the market, but not all of the means of production. Perhaps they think the government should be the dominant player in higher education like it is in K-12 education, funding or even running it.

Or maybe they mean the government should take over the telecommunications industry, for example. I don’t even think Bernie Sanders wanted that. But undoubtedly some people think the government should be running more industries because they believe they will do so more fairly or without a profit motive. In my view, that is still not socialism or a good idea.

Q: What does the image of a kinder, gentler capitalism look like?

Those who believe in capitalism and the free market believe it works best when there is equality of opportunity.

The Hoover Institution just republished President Hoover’s essay American Individualism. It asks why “American individualism” or “rugged individualism” works in this country? Well, it works because we’re all committed to equality of opportunity. It’s the idea that you get to make decisions about what’s best for you, which means you can live a better life.  It’s the ideal and we’ve not achieved it, but we can continue to aspire to it.

When it comes to what to do about it, I think we have to focus more on things that create opportunities for everyone, like education.  But equality of opportunity never assures equality of outcome. Not everyone will achieve the same, but we should try to start with as level a playing field as possible. I believe we stray from this approach when the government intervenes through the tax code, regulations, or other means to pick economic winners and losers.

Comment: Venezuela didn’t fail because of socialism, it fell because of low oil prices. Cuba didn’t fail because of socialism, it fell due to authoritarianism.

Let’s be more general than Venezuela or Cuba because the issue that we’re trying to address isn’t specific to these countries, it’s about capitalist versus anti-capitalist societies, with socialism falling on that side of the spectrum.

My sense is that, if you look over a long period of time, gross domestic product grows far more rapidly in capitalist and free market economies than it does in socialist or state-run economies. There are always short periods of time when special cases arise, but I think it’s accurate to say that over time, there is far more economic growth in free market countries.

Comment: True socialism has never been tried.

If you think it’s never truly been tried, what gives you confidence that true socialism could ever actually be implemented or work?

What we can point to are countries’ experience with much larger welfare states, which is my interpretation of what people actually want when they say they favor socialism. Denmark and others have had this experience. They’ve generally found that it’s not sustainable and have had to pull back.  They simply can’t generate enough economic growth to support their generosity. Margaret Thatcher used to say, “The problem with socialism is that eventually you run out of other people’s money.” Instead of idealizing or romanticizing that, we should probably learn from it. Bernie Sanders was talking about making America more like Denmark, not making America great in an American model.  I’m not sure Denmark’s model is one we would want to emulate.

Q: Do you have any closing thoughts?

Gordon Lloyd and I wrote this book called Rugged Individualism, which is one of the phrases used to describe the American character. When people came to this country, think about what were they running from. They were running from an environment where many of the key decisions were made for them, either by a king or queen, or by the church, or by their birth into a stratified social system. A lot of key decisions were made for them by others. So to answer why they wanted to come to this country, I think it’s fair to say they wanted to be individuals and make decisions for themselves.

So why would we want to move away from that direction? At the end of the day, socialism means taking away more decisions from individual people in the name of vague notions of fairness or equality.

This is the debate that Toqueville said is at the heart of the whole American experiment: Liberty versus equality. America isn’t only about fairness and equality–it is also about liberty. We have to hold those ideas in tension, which is not easy, but throwing out an economic system in favor of another that has a dubious record doesn’t seem wise.