President Trump recently declared that “America will never be a socialist country”. In a supportive statement, US National Economic Council Director Larry Kudlow urged us to put socialism on trial and convict it. Their urgency is triggered by the aggressive push for “Democratic Socialism” by left-wing politicians like Bernie Sanders and Alexandria Ocasia-Cortez and the Green New Dealers.
And President Trump may be swimming against the tide. In a Harris Pollpublished at Axios on March 10th, 2019, 49.6% 0f Millenials and Gen Z said they’d prefer living in a socialist country. Axios also reported that 61% of 18-24 year old Americans have a positivereaction to the word “socialism”, beating out capitalism at 58%.
What is it that they really want? And what is it that Trump and Kudlow want?
The historical definition of socialism has focused on the elimination of entrepreneurship from the economic processes of production. The State owns the factories and the banks and the hospitals. This was the socialism of the old Soviet Union, and it’s closely mirrored in Cuba and Venezuela and partially in China today. This kind of socialism represses economic freedom at the level of individual consumers, because the signals they would normally send back to producers about what they prefer and what they don’t want are not received. Consumers get what is produced and are not free to choose. Their motivation is quickly strangled and their creative energy dies. With no entrepreneurs to respond to their preferences, they give up, and take what they are given. Their social and economic objectives can not be realized because there is no response mechanism.
Democratic socialism is meant to be different. Social democracy is meant to achieve the objectives of the people through democratic mechanisms. Instead of “socializing” the means of production, the democratic socialists shift their institutional aggression to the fiscal sphere, promising to “even out” social and economic opportunities. The difference between real socialism and democratic socialism is not one of category or class but simply one of degree. The aggression against the citizen in democratic socialism is profound and far-reaching, with regard to the number of social spheres and processes affected, and the millions of people who suffer systematic expropriation through taxes of a very large share of the fruits of their individual entrepreneurial activity, and are forced by law and regulation to act in a way that they would not normally or voluntarily agree to.
Even though the democratic socialists express ostensibly noble goals – impossible, in reality, to achieve – they approach them via coercion and repression of individual choice and individual creativity. There is a “mirage” effect of democratic socialism. When individuals are blocked from the creativity of their own initiatives, they become dependent and lose awareness of what they could otherwise create or experience in a dynamic entrepreneurial economy. They identify government agencies with the existence of goods and services that are crucial to their lives. It becomes difficult for dependent individuals to return to the entrepreneurial habits of their prior lives.
But let us not fool ourselves that the people who will save us from socialism are members of the Republican party. The right-leaning political party in the US is no champion of unfettered entrepreneurial capitalism. Their proposed levels of spending and taxation may (at times) be less than those of the Democrats, but they are still too high. Their regulation, even though Trump is trying to pare it back here and there, is still intrusive and restrictive. Their fiscal and regulatory policies continue to ensnare hundreds of millions of producers and to confiscate the fruits of production.
The opposite of Democratic Socialism is not Republican Party policy, it is entrepreneurialism based on individual choice and individual action. The normal conduct of society is the continuous adaptation of individuals to each other’s needs. If one sees a need exhibited by another – they need to hire, they need a particular good or service, they need to assemble a team for a project – they offer to help. If the price is right, an exchange is made. If it’s not, a further adjustment is made. These adjustments and exchanges take place between billions of individuals every day, and a society that works for all – because it represents the sum total of everyone’s mutual adjustments – emerges. This is society. This is the social process.
Socialism is, in fact, anti-social. It does not permit the social process to work. It imposes rules and regulations and taxes and assaults on private property to forcibly impose its “noble” goals. It becomes totalitarian, because this systematic aggression eventually spreads to every nook and cranny. It impedes the process of innovation and the production of goods and services that people prefer, slowing down economic development. It shackles creativity and individuality.
If Trump is right that America will never be a socialist country, he must recognize that we are an individualist country. American exceptionalism means that we are the one remaining capitalist country where government can get out of the way of its productive citizens, and celebrate the advances that they bring for their countrymen simply by working hard. Innovators and economic achievers are trying to earn a living and making individual choices every day, with their own interests in mind and no collective goal. Betterment for everyone is the result. Trump seems to be pretty individualistic. Perhaps he can move us in that direction.