The word socialism made a surprising come back during this last election and though it was hurled with the usual vigor by knee-jerk conservatives it gained much more currency because of the wholesale restructuring of the American economic system that has been going on. Just as people have no idea what the new system is going to look like, there seems to be as little agreement or understanding of what the term “socialism” means.
In one strict sense socialism refers to any belief structure that springs from the philosophy of Karl Marx and is generally expected to mean that the government takes over all or a part of the economy. That’s why the huge bailouts of Wall Street and now the auto industry are seen by many to be a movement toward socialism. But is government intervention on behalf of giant corporations really what we mean by socialism? The irony in the election debate was that even as the government apparatus bowed unnaturally to the will of the powerful, the notion of progressive taxation, which has been with us for nearly a hundred years, was suddenly derided as an alien and dangerous concept.
So what would a working definition of socialism look like in the current context and can it ever escape the stigma that the failure of communism and decades of right-wing propaganda have attached to it? The collapse of the Reagan/Greenspan free market ideology has been so sudden and thorough that one might jump to the conclusion that capitalism is dead. But I would not be terribly sanguine that something better is about to take its place.
After all, as these events of the waning days of the Bush administration clearly show, the powerful continue to call the shots and in short order will have a new rationale for running things to suit their needs. Two conclusions are therefore apparent. First, that government intervention that benefits the powerful over the needs of the people is not what we should be calling socialism. National socialism perhaps.
The second is that interventionism is the de facto operating principle at all times whether we acknowledge it or not. The idea that the economy moves as a sort of natural order where interference is detrimental is true only as long as it is functioning for the well-being of the whole. When this paradigm breaks down intervention is and always has been the inevitable course of action. Taken together we can say that the desired policy is intervention on behalf of the needs of the people.
It is this understanding and appreciation of “the whole” that should be the defining aspect of a new socialism. For the whole to be strong every “part” has to thrive. This is what was missing from the free market regime of the last thirty years. Out of the conservative belief that only individuals matter and that rewards only go to the deserving was constructed a system where the elite class could mine the value out of the lesser classes and accrue wealth into fewer and fewer hands. This was achieved by implementing a program of debt proliferation which created the illusion of wealth creation.
At the same time any notion of concern for the well-being of the poor was derided as misty-eyed idealism. Everyone who wasn’t on the bottom was urged to fight for their place in the investor class where money was magically created by just having money.
The irony of course is that the great pyramid scheme of the American economy collapsed from the bottom up. As jobs were exported for the marginal advantage of the elites no one bothered about the inability of the working class to continue servicing their expanding debts. The unraveling of defaults spiraled up through the financial sector and is unlikely to stop at the U.S. Treasury.
This irony in our current state of affairs cannot be synthesized until we can implement a meaningful program based on viewing society and our economy as a whole. It represents both a pre- and post-Marxian conception of socialism. State control should not be seen as an end in itself. Rather it is the principle of “democratic control” of our economy, in which government intervention is a means not an end, which should guide us going forward. Free markets are not an automatic pilot or a substitute for thinking. They are not self-regulating but require a societal super-ego based on an informed and empowered popular will to keep the economy serving its primary function of meeting the needs of the whole. Government cannot fill this function unless there is a true shift of power away from corporations and to people.
At the same time it would be foolish to try to rewrite the rules of classical economics. Just as Newtonian physics remain viable on a day to day level even though we know there is a greater more complex reality in quantum physics, so too should we accept Adam Smith’s models of supply and demand and individual initiative even though we know that the needs of the whole will supersede them. The American entrepreneurial system is too important and beneficial to our lives and culture to be wholly rejected.
Indeed the course of democratic intervention ought to run toward breaking up malignant concentrations of economic power for the precise purpose of freeing average Americans to pursue entrepreneurialism on a more human scale. On the surface the new economic system needn’t look much different from the old one. What should be changed is that the top level of super-rich, super-powerful elites needs to be contained and the bottom level, the people who have been so diligently ignored in conservative ideology need to be viewed with the understanding that the strength of the whole very much depends on them.