Why socialism isn’t all bad, capitalism not all good
By John Stoehr
October 25, 2010
Meet Chris Hutchinson. He’s a socialist. Yes, it’s true. He thinks plenty is missing from today’s political discourse. There’s lots of talk about the size of government, the national deficit and repealing health care reform; there’s none about the dark side of capitalism, especially the neoliberal sort that equates free enterprise with democracy, even though, given the fact of the current recession, they are seemingly at odds. So Hutchinson and the Socialist Action Party collected 5,744 signatures (twice what’s required) to run against U.S. Rep. John Larson. He hopes to take the Democratic incumbent’s seat in the First Congressional district.
“People say I’m a fringe candidate, but Democrats and Republicans are fringe, because they are the parties of the wealthy,” Hutchinson says. “We stand by workers. We appeal to people who are feeling the effects of the economy, which is the majority of people. So we are the majority. We want to show the minority of wealthy people where the real power is. The real power is in the hands of people who work.”
Hutchinson’s platform, called “We Are Paying for Their Crisis,” takes the same populist anger expressed by the Tea Party and directs it at whom he believes is really to blame. The “we” is anyone with a boss. “Their” means the “boss class.” So Hutchinson calls for a massive jobs program (hundreds of billions of dollars), tripling the minimum wage, fewer working hours, a single-payer health care system, free higher education, 100 percent tax over $250,000, no tax under $50,000, and public ownership of banks and corporations.
When asked how workers would run a corporation, Hutchinson says they’d figure it out. Which tells me he doesn’t know. The total tax thing kind of sounded weird to me, too. It’s not extreme, though, says John Roemer, a professor of political science at Yale. Taxation similar to that, he says, has yielded tremendous results in socialist democracies like Sweden: greater equality, virtually no poverty, stellar public services, low crime and political stability. The typical criticism of the welfare state is that it discourages ambition. Not true, Roemer says. “There’s no evidence to suggest that,” he says. “People have their own reasons for working.”
Hutchinson’s other tax proposals aren’t as wild as they sound, either. The top marginal tax rate was 91 percent in the 1950s, a legacy of the New Deal era. Reviving that is an idea whose implementation is long overdue, wrote Stephen Gandel in Time. He said a tax on the very, very rich would not only “redistribute some of that wealth ... to social programs that end up improving education or paying for healthcare reform or creating jobs,” it would also serve to effectively drain “that global pool of money that sloshes around our financial markets and creates all types of bubbles,” which are the price we pay for capitalism that widens income inequality. “Money concentrated with the rich makes our economy prone to booms and busts, and less stable.”
How did we get so desperate?
Adam Smith knew that. That’s why the 18th-century philosopher and father of laissez-faire capitalism, when he wrote The Wealth of Nations, asserted that markets tend to destabilize, even destroy. That’s their nature. The state, then, has the “duty of erecting and maintaining certain public works and certain public institutions, which can never be for the interest of any individual, or small number of individuals, to erect and maintain.”
Smith’s “small number of individuals” is James Kwak’s oligarchy. The Yale law student and co-author, with Simon Johnson, of 13 Bankers, argues that the cozy and insular relationship between Wall Street and Washington amounts to an oligarchy in which banks wield disproportionate power, because they are “too big to fail.” They take the risk, make the money and taxpayers take a bath. It’s not fair and it’s not good for democracy, Kwak writes. That’s pretty much Hutchinson’s view. “The people own the banks through bailouts, but we don’t have any say in how they invest,” he says. “Now the banks are lying to us about foreclosures. They want to maneuver millions of Americans out of the way so they can maximize their profits.”
Blaming the rich isn’t empty rhetoric. From 1997 to 2007, the median income of middle-class households scarcely budged while 57 percent of all income in the U.S. shifted to the top 1 percent, a gaping maw of economic inequality parlayed into extraordinary political influence in Washington. This is the oligarchy and this is why workers must fight back, Hutchinson says. He doesn’t call for dictatorship or state control of all private property. Just control over properties that impact the whole of American society, like banks. And he doesn’t advocate violent revolution. Just mobilization, he says. Otherwise, history will keep repeating itself.
To that end, Hutchinson says pull out of Iraq (completely) and Afghanistan. Close military bases abroad. Spend on education and on technological innovation, like light rail cars and solar panels, to address environmental concerns. Pay workers to repair roads and bridges. Amnesty for immigrants and full employment. And forget about the so-called American dream: “We are now told to expect less than ever. Where has all the wealth we created gone? Why, after all this, is our condition more desperate than ever?”
Radicalizing the people
Why, indeed. The president hasn’t explained. Neither have Democrats. Instead, Obama has been “so friendly to big finance,” observes Doug Henwood, editor of the Left Business Observer. “I thought when he took office, he’d be like Teddy Roosevelt and push for regulation and stability over the long term in order to restrain some of the worst impulses of the business class. Now it’s left to a socialist in Connecticut to explain why.”
Obama could have done for the ‘00s what Reagan did for the ‘70s, Henwood says — clear away everything we thought was true about the economy, particularly wholesale deregulation and tax cuts for the rich. These were the pillars of “supply-side economics,” a school of thought that emerged from that decade’s oil crisis.
Here’s what happened: Economists used to believe demand was key to a robust economy. They were right, as long as the middle class, which tends to spend more of its relative income than the wealthy, continued growing. But the 1970s proved the beginning of a 30-year decline, as countries like Japan and Germany grew in strength, as globalization sent manufacturing jobs to Mexico, as automation replaced people and as the oil crisis sent inflation soaring. Unemployment rose; growth stagnated. By decade’s end, it was clear demand could no longer provide profitability. Someone had to do something. That someone was Reagan.
Reagan didn’t come up with the idea, but he made the political case for it — focus on supply, not demand. That meant giving business incentive to make money. Cutting taxes and gutting regulations, therefore, equaled job creation and everyone would benefit. The larger implication, writers Kim Phillips-Fein in “Reaganomics: The Rebirth of the Free Market,” a chapter in Living in the Eighties, is that we didn’t have to worry about income inequality. Instead, a new attitude formed in the 1980s: “Anything that provided disincentive to invest — in other words, anything that irritated business — would hurt the economy; anything that offered an ‘incentive’ to investment was in the general interest.” That is, greed is good.
Reagan’s tax cuts lowered the top rate from 91 percent (where it had been since the New Deal) to 36 percent. Presidents since have more or less accepted Reaganomics as orthodoxy. So much so it’s not called that anymore. By the 1990s, the rich were so flush they speculated on fictional products, like derivatives (bets on the value of real assets, like houses). Unchecked by regulators and sanctioned by years of neoliberal dogma, they inflated the tech bubble to bursting in 2001. After that, they expanded into new territory — the housing market — and speculated until that burst, too. The Great Recession has been with us since.
Hutchinson says beating John Larson isn’t as important as encouraging workers to fight. That’s an oblique way of saying he knows he can’t win. He’s a socialist running during a time in which, strictly speaking, socialism as a political system does not currently exist yet has been portrayed as an idea tantamount to evil. And it won’t be Obama, either. Yale’s Roemer says he didn’t push for more aggressive financial reforms for fear of being attacked by Wall Street. Look at how the GOP blasted him for straying from pro-business policy after wresting reparations from BP. If Republicans take the House next month, Roemer says, they’ll aim for impeachment. “Obama won’t change his policies until the people become radicalized themselves.”
Radical or reactionary — or just rich
At 27, Chris Hutchinson teaches art at three Catholic schools in the Hartford area. His mother, who works at an insurance company, raised him by herself in Newington. She doesn’t always understand her son’s points of view, he says, but she’s supportive nonetheless. With thick-framed glasses and close-cropped hair, Hutchinson cuts a figure more like a Brooklyn hipster, not a radical building a grass-roots coalition in Connecticut. He studied art at CCSU under Mike Alewitz, a well-known muralist whose work is influenced by Diego Rivera, who was a communist and close friend of Leon Trotsky, icon of the Russian Revolution.
Hutchinson became a socialist formally in 2006, but it was Sept. 11 that radicalized him. That’s when he realized, he says, that President Bush would use the terrorist attacks as pretext for war. While many slid to the right, as is typical in the wake of a national security crisis, Hutchinson moved to the left. In 2003, he participated in a rally to protest U.S.-led plans to invade Iraq. News reports show that about 500,000 marched in New York, 660,000 in Madrid, 750,000 in London and 1 million in Rome, among other cities.
“The whole world was protesting,” he says. “That showed me the power of the people.”
Questioning capitalism, however, isn’t enough. Hutchinson’s mere presence alone raises awareness of class, a fact that unsettles deep-seated beliefs about what America stands for. If this is “the land of opportunity,” you’re free to succeed or fail; it’s a test of one’s moral fiber. The poor, therefore, deserve their depravity, the rich their affluence. Personal integrity in fact has nothing to do with social stratification, but such a myth remains a blinding force. In Lies My Teacher Told Me, historian James Loewen recalls that his students were stunned to learn “how the upper class wields disproportionate power relating to everything from energy bills in Congress to zoning decisions in small towns.” “People don’t see the chains, so they don’t see the need for change,” Hutchinson says. “Workers are conscious of their bills, but not of their status.”
That is changing, he says. Millennials — those under the age of 30 — are entering a decimated workforce. This wasn’t part of the bargain. “They feel lied to,” he says. “If you worked hard and played by the rules, you’d be rewarded. That’s how it’s supposed to work. But there is a rising consciousness that the game is rigged.” Again, Hutchinson’s view isn’t extreme. In After Shock, Robert Reich, former labor secretary under Clinton, writes: “Perhaps the hardest loss … will be giving up the expectation that the future has to be materially better … [They] have long assumed that hard work will ensure a better future … especially for their children.” Later, Reich writes: “The economic conditions most Americans will experience may cause them disappointment and anxiety, to be sure, but will that turn them into angry reactionaries?”
That might depend on their age. If you’re over 50, you might be reactionary (uh-huh, the Tea Party). If you’re under 30, you might turn radical. Many Millennials, in fact, are living with their parents, waiting for jobs currently occupied by baby boomers delaying retirement, and postponing marriage. Nearly 50 percent have a negative view of capitalism, according to a Pew poll; 43 percent have a positive view of socialism. It makes an intuitive sense. Millennials came of age in the post-Soviet era. For them, the words “communist” and “socialist” don’t mean the same as they used to. “Terrorist” has a much greater emotional charge. Their parents, however, are old enough to remember “the Evil Empire” and containment theory, as well as the belief that God-fearing American enterprise would save the world from the godless totalitarianism of Stalin and Mao.
“Mao and Stalin were brutal dictators,” Hutchinson says. “They betrayed the movement.”
They hurt the movement, but Mao and Stalin also give political cover to the rich whenever they need a rationale to oppose progressive taxation. To them, “tax the rich” means “socialism.” That’s what John McCain meant in 2008. That’s what the rich have meant since the New Deal.Sam Pizzigati, editor of Too Much, a newsletter on economic injustice, reports that the rich have been using the socialist boogie man for a long time. If they feel overtaxed, the rich often portrayed themselves as victims of socialists. Pizzigati found this quote from 1959: “The government makes the old Robber Barons look like children,” the multi-millionaire Richard Lansbury told The New York Times. “There’s no difference between the Republicans and the Democrats. The Republicans are Socialists and the Democrats are Communists — that’s all.”
Even though Hutchinson is unlikely to win (actually, he doesn’t stand a chance), and even though the Tea Party gives the impression that the American polity is banking to the right, socialism across the country is experiencing a kind of renaissance. One reason is new scholarship into Marxists theory, which shows “how, in return for wages equivalent to the value of a day’s labor, capitalists extracted several hours of surplus labor from the worker,” wrote Jan Garrett in Tikkun, a liberal magazine of religion, politics and culture. There’s more. “The inner dynamic of capitalism (the ‘laws’ contingent on its existence as a system) appears to be also the source of most if not all of the major problems faced by the planet.”
That’s what energized the huge ground swelling of young support for Obama 2008, Hutchinson says. They thought he’d do something about climate change, energy dependence and immigration. So far, he says, they’ve been disappointed with the Democrats’ unwillingness to fight an entrenched GOP. “Socialists want them to fight. We want them to know that democracy isn’t just idea; it’s part of everyday life.”
Then again, maybe age has nothing to do with whether you’re reactionary or radical. Maybe Hutchinson is right. Maybe it all boils down to whether you’re rich.