Alex Henderson

ECONOMY

Millions Now Understand What Capitalism Needs Socialism to Work, Which Is Why Bernie Is So Popular

Sanders' vision of democratic socialism is just capitalism with a safety net.

By Alex Henderson
AlterNet, May 21, 2016 

Three short years ago, the idea of a major candidate in a presidential election openly describing himself as a socialist would have seemed unthinkable. President Barack Obama had entered his second term and the Democratic Party had won the popular vote in five of the last six presidential elections not by running to the left, but by campaigning mostly from the center. In 2013, “socialism” was still a dirty word in American politics. But that was before Bernie Sanders ran for president and before polls showed the word socialist taking on an increasingly positive connotation among millennials in the United States. The word is still rejected by most strategists in the Democratic Party, but in 2016, it at least gets a seat at the table in the marketplace of ideas.

When Sanders officially entered the Democratic presidential primary in April 2015, his campaign was considered a longshot. Sanders, who had been serving in the U.S. Senate as an independent, proudly and openly described himself as a “socialist”—and conventional wisdom in the Democratic National Committee was that running for president as a centrist was essential unless one wanted to suffer a landslide defeat like George McGovern in 1972 or Walter Mondale in 1984. But Sanders has run a disciplined, aggressive campaign that, as of May 15, 2016, had won him 1,473 Democratic delegates and 40 superdelegates. Hillary Clinton, with 2,240 delegates and 524 superdelegates, remains the frontrunner and the likely nominee. But the fact that Sanders has made this much progress in a 21st-century Democratic presidential primary by describing himself as a democratic socialist and campaigning so aggressively on single-payer health care and free higher education is downright historic.

Context is important. When Sanders describes himself as a democratic socialist, he is referring to democratic socialism as practiced in Sweden, Denmark, Switzerland, Italy, Norway and many other countries in Western Europe; in other words, capitalism with a safety net. Sanders is essentially a capitalist who rejects the type of crony capitalism and ruthless corporatism that is killing America’s middle class. By European standards, Sanders is a mainstream liberal, which is a far cry from orthodox Marxist-Leninism as practiced in the old Soviet Union. And compared to some of the left-wing parties that have been gaining momentum in parts of Europe (such as Podemos in Spain or Syreeza in Greece), Sanders is not that far to the left. Rather, the political discourse in the U.S. moved so far to the right in the 1980s and '90s that openly embracing socialism on any level was considered toxic.   

In January 2016, YouGov posed the question: “do you have a favorable or an unfavorable opinion of socialism?” The poll found that Americans under 30 had a view of socialism that included “very favorable” (8%), “somewhat favorable” (35%) or “somewhat unfavorable” (13%). In the 30-44 demographic—that is, the older millennials and younger Generation Xers—Americans had a view of socialism that included “very favorable” (7%), “somewhat favorable” (20%) or “somewhat unfavorable” (19%). And in the 45-64 demographic, a combination of Gen-Xers and Baby Boomers had an opinion of socialism that included “very favorable" (4%), “somewhat favorable” (23%) or “somewhat unfavorable” (18%).

The most right-wing Americans in the YouGov poll tended to be older. Americans who had a “very unfavorable” view of socialism included 13% of Americans under 30, 31% of Americans aged 30-44, 36% of Americans aged 45-64 and 40% of Americans over 65. And they tended to be whiter: 36% of whites had a view of socialism that was “very unfavorable” compared to only 10% of blacks or 28% of Hispanics.

A Gallup poll released in June 2015 found that 47% of Americans viewed the word “socialist” favorably, including 59% of Democrats, 49% of independents and even 26% of Republicans. And a new Gallup poll released in early May 2016 offered additional insights on Americans’ thoughts on socialism. When Gallup asked Americans if they had a “positive or negative image” of socialism, those who had a positive image included 55% among those aged 18-29, 37% among those aged 30-49, 27% among those aged 50-64 and 24% among those 65 or older. But at the same time, the terms “entrepreneurs,” “free enterprise” and “capitalism” fare well in the polls—even among millennials.

In the 18-29 demographic, Gallup found Americans to be 90% favorable to “entrepreneurs,” 78% favorable to “free enterprise” and 57% favorable to “capitalism.” If anything, millennials have a slightly higher view of “entrepreneurs” than Gen-Xers and Boomers do: the word “entrepreneur,” in that poll, is viewed favorably by 87% of Americans aged 30-49, 87% of Americans aged 50-64 and 83% of Americans who are 65% or older.

If Americans between 18 and 29, according to Gallup, are 55% pro-socialist but 90% pro-entrepreneur and 78% pro-free enterprise, is that a contradiction? How can over half of Americans in their 20s be pro-socialist if most of them are also pro-entrepreneur and pro-free enterprise? No, it isn’t a contradiction. Again, context is crucial, and while the Gallup poll didn’t mention Sanders by name, it does indicate that his vision of capitalism with a safety net is resonating with many Americans—millennials in particular.

Sanders is not anti-capitalist, and the economic views he identifies with are not those of Fidel Castro, Che Guevara or Vladimir Lenin, but those of President Franklin Roosevelt and Dr. Martin Luther King, Jr. Sanders has never called for traditional communism or Marxist-Leninism (which barely exists outside of North Korea or Cuba these days), but he is fiercely opposed to corporate welfare and banksters operating with impunity. And when he calls for breaking up the U.S.’ largest banks into a bunch of smaller banks, that is right out of President Roosevelt's playbook for saving capitalism from itself.

Capitalism needs a certain amount of socialism in order to function well: when Americans are broke and unemployed, they have less ability to make the purchases that keep companies in the black. And at the same time, a social safety net needs successful free enterprise and entrepreneurs to contribute to the tax base.

Gen-X and Baby Boomers have been hit hard by the economic downturn in the U.S., but at least they are old enough to have enjoyed the prosperity of the Bill Clinton years. Millennials, on the whole, have spent their adult lives in an era of diminished hopes and expectations. And Sanders’ appeal to millennials is not hard to understand when one takes into account all the bad economic news Americans have been bombarded with in the post-2008 economy. 

College Tuition Costs More, But Offers Less

Back in the 1950s and 1960s, a college degree practically guaranteed a decent income. Seeing college graduates in low-paying service jobs was practically unheard of. Now, it is common. College tuition costs a lot more, but there is no guarantee that college graduates won’t end up with a dead-end, minimum-wage, entry-level job in a dollar store.

Being Stuck at Home at 27 Is Common

In 2013, the U.S. Census Bureau found that between 2007 and 2011, the number of millennials in the 23-28 range who were living with their parents had increased by more than 25%. The twentysomethings of the more socialistic, more unionized, more New Deal-friendly 1950s and 1960s (both white-collar and blue-collar) were more likely to enjoy home ownership, marriage, a steady income and upward mobility; now, affording rent—let alone a mortgage—is an uphill climb for twentysomethings.

Wages Aren’t Keeping Up with the Cost of Living

A difficult job market is bad enough, but it becomes a double whammy when the cost of living continues to soar. For example, the cost of single-family rentals, according to the U.S. Census Bureau, increased by 34% nationwide from 2006-2014. But wages are not keeping up with the cost of living, making it a battle to keep a roof over one’s head. According to the Pew Research Center, the purchasing power of the federal minimum wage peaked in 1968 and has declined by 8.1% since it was last raised in 2009.

Long-Term Unemployment

Although recessions and layoffs occurred in the 1950s and '60s, workers were more likely to bounce back. But in 2016, long-term unemployment—meaning being out of work more than six months—is a painful reality for more than 2 million Americans.

Outsourcing

High-paying white-collar jobs are harder to come by than they were in the '50s and '60s, and so are high-paying blue-collar jobs. So-called free trade deals like NAFTA have been every bit as devastating as Ross Perot predicted they would be back in the early 1990s. A 2012 study by economists David Autor, David Dorn and Gordon Hanson found that between 1991 and 2007, the U.S. had lost roughly one-quarter of all its manufacturing jobs because of low-wage competition from China.

Bearing all this economic misery in mind, it isn’t surprising that so many millennials—and many Gen-Xers and Boomers as well—have been receptive to Sanders’ call for an economy that contains a certain amount of socialism and a certain amount of capitalism/free enterprise. Economically, Americans on the whole were much better off economically when the New Deal was still being protected, union membership was high, the ultra-rich paid their fair share of taxes and the country was a lot more socialistic than it is now. And if the Gallup data of 2016 is any indication, millennials who consider themselves pro-socialist and pro-entrepreneur at the same time are not rejecting capitalism altogether, but rather, are rejecting crony capitalism and longing for a New Deal 3.0 (President Lyndon Johnson’s Great Society was arguably the New Deal 2.0). 

But while Sanders’ campaign has shed a considerable amount of light on the term “democratic socialism,” public opinion was starting to move in a more pro-socialist direction long before he decided to run for president. In 2010, a Pew Research Center poll found that 43% of Americans aged 18-29 had a positive view of socialism; in a Pew poll conducted a year later in 2011, that number had increased to 49%. Pew, in 2011, also found that support for socialism was viewed positively by 34% of Americans aged 30-49, 25% of Americans aged 50-64, and 13% of Americans aged 65 and older.

In poll after poll, from PPP to CNN to USA Today, Sanders performs well during a hypothetical Sanders/Trump matchup, defeating the Donald by double digits. The ability of the Sanders campaign to bring in $182 million while repeatedly calling himself a socialist doesn’t indicate a desire on the part of millions of American to embrace a Soviet Union-style government, it is a widespread acknowledgement that 35 years of Reaganomics and trickle-down economics have failed the working class miserably and that a return to the policies of the New Deal would be a blessing.