Wednesday, September 16, 2009

Why are People afraid of Socialism?

Twenty years ago the Berlin wall came down and Soviet communism collapsed. Chinese communism has morphed into an authoritatian capitalism that destroys the environment and mercilessly exploits working people. Except for the tiny island of Cuba, communism or socialism appear to be dead. Why then the continuing fear of socialism? In the recent debates about health care, the president's program was regularly attacked as “socialist.” Why is the specter of socialism still haunting the apparently triumphant capitalist system?
Capitalism won the battle but it has returned from the wars bloodied and limping. While the papers tell us every day that the economy is recovering after almost collapsing, the small print tells us that unemployment is going to rise in the near future and employment will recover very slowly. With the national unemployment rate at close to 10% – one out of every 10 persons looking for work will not be able to find any – that is a serious failure of the system. Yes, Goldman Sachs and the Bank of America may be making a profit again, but ordinary Americans are still suffering from tremendous job insecurity. Many hard-working Americans still are losing their homes. More and more schoolchildren have no homes to go back to when the school day is over. Poverty is on the rise; more and more families have to go to food banks in order to feed their children.
All this is well known. Less well known is the fact that this betrayal of ordinary working Americans by the capitalist economic system has been going on for many years. For a long time now capitalism has not been good for most Americans. Between the end of World War II and the 1970s, real wages for most working people went up. People earned more, they could buy more. Life was good. Since then, real wages – what the money you earn can actually buy—have been going down steadily. Working families responded by converting themselves into two wage-earner families. More and more women are also working paid jobs. One result was that more and more children come home from school to empty houses or apartments, and more of them get into trouble. It is good that women have greater job equality. It is not good that parents have to work so hard they cannot take care of their children.
But even having both husband and wife working still did not bring in enough money. A large number of working families carry consumer debt they will never be able to repay. It is not uncommon for families earning $60,000 a year to owe more than $100,000 on their credit cards. Real wages were so low that even with all adults in the family working they could not bring in enough money. Families took on serious debt for consumer purchasers and for housing.
At the same time, it became possible to move manufacturing jobs offshore and still make a profit. Steel, autos, tires and electronic gadgets are now manufactured elsewhere. Look at the labels in your clothing; chances are they are made in China. Big business earned more; ordinary Americans were left with worse jobs and lower pay.
In the same period, health care costs exploded. The American healthcare system is the most expensive one in the world; our outcomes are definitely second rate. Life expectancy in Japan is higher than in the US; the cost of the Japanese health care system is half of ours. The US health care system is the most expensive in the world but the Infant mortality rate in the US is just a tad better than in Poland, Croatia, Estonia and Hungary.
The outlook for the future is very grim. The rate of obesity in America is shooting up. Soon there will be millions and millions more suffering from diabetes and other illnesses connected with being overweight. More and more people will have bad knees and bad backs because they are too heavy. This is caused, as Michael Pollin has recently argued, by our economic system that produces food that is cheap but also very bad for us: fast food, soda, greasy snacks. Healthy food such as vegetables and fruits are more and more expensive and out of the reach of many people. Many Americans do not earn enough to feed themselves and their families healthfully. Our economic system yields fewer jobs for ordinary working people, falling wages, second rate health care and unhealthful food.
A well-known Yale University economist, Robert E. Lane, has asked whether people are happier today than at the end of World War II. His answer is :”no” People work harder than ever before; they have less time to visit with friends and family. A certain amount of their earnings go to buy gadgets that further isolate them: MP3 players, smart phones that allow you to play games or text others instead of talking to your friends. But happiness requires that we share, that we maintain our important relationships. Texting is not a substitute for friendship.
As the current crisis shows, the system produces terrible insecurity for many working people. Economists today admit that this insecurity is built into the credit system. Crises are bound to recur at regular intervals. When there is a crisis, as today, lenders are cautious. But then the economy recovers, most banks and financial institutions make money and investors think that the good times will never end. (Barely a year after the economic meltdown there are already signs of banks making risky loans.) They take excessive risks and the economy will collapse once again. Ordinary workers pay billions of dollars-- as we did in the last year-- to bail out the big financial institutions and then loose their jobs and their homes on top of that.
Those financial institutions bring in enormous profits for the investors. Capitalism is good for them. But often it is not good for ordinary people.
Socialism is the opposite of capitalism. While not a real threat, many Americans fear it. It is their way of putting into words their anxiety that capitalism is ailing. Its many failures force us to move away from a system of private enterprise and free markets. Firmly committed to capitalism, many Americans nevertheless see the many signs of its inadequacies. In calling attempts to remedy some of those socialism, they acknowledge in a backhanded way that their favorite system, capitalism, is an idol with feet of clay.