They Are All Socialists Now
In 2009, a February cover of the magazine Newsweek contained the headline “We Are All Socialists Now.” It was British Liberal politician Sir William Harcourt (1827–1904) who coined the jocular phrase, as explained by then-Newsweek editor-in-chief Jon Meacham, who wrote the cover essay:
The allusion in the intentionally hyperbolic cover line was to Richard Nixon, who said, “We’re all Keynesians now,” signaling a post-World War shift in the debate over the relative role of government in the economy. It was clear to us then — and remains so now — that 2008–2009 was another chapter in that story. It’s also important to remember that the piece was not at all only about Obama. Without the government’s direct intervention into the private economy under Bush 43, it’s difficult to say what would have happened. And one could argue that the Trump victory was in some measure a backlash against not only the Obama era but the Bush 43 years as well. The cover still comes up sometimes, usually from far-right sources who of course never read the piece itself.
Then-senator Jim DeMint (R-SC) used to wave a copy of the infamous Newsweek issue during his speeches, as Republicans tried to paint President Obama as a socialist.
But some Democrats doubled down on the term. After all, polls of young adults during the waning years of the Obama presidency found that many “millennials” viewed socialism favorably and had a higher opinion of socialism than capitalism. Senator Bernie Sanders (I-Vt.) sought the Democratic Party’s presidential nomination in 2016 as a “democratic socialist.” Not only did he draw huge crowds when he spoke, he won millions of votes, including majorities of the under-thirty vote in some state Democratic primaries. The Democratic National Committee (DNC) viewed him as a threat to Hillary Clinton and tried to undermine his campaign. Most recently, a survey by the Cato Institute and YouGov found that 62 percent of Americans aged 18 to 29 had a “favorable” view of socialism.
Capitalism and socialism
The essence of capitalism is the private ownership of the means of production, distribution, and exchange. “The inherent mark of capitalism,” as stated by the renowned Austrian economist Ludwig von Mises (1881–1973), “is that it is mass production for mass consumption directed by the most energetic and far-sighted individuals, unflaggingly aiming at improvement. Its driving force is the profit motive, the instrumentality of which forces the businessman constantly to provide the consumers with more, better, and cheaper amenities.” Thomas DiLorenzo, president of the Ludwig von Mises Institute and author of The Problem with Socialism (Regnery, 2016), maintains that “the greatest engine for economic mobility, progress, and opportunity is capitalism.” It has been “the main cause of increases in wages, improved working conditions, and prosperity for the working class — and all other classes.” Capitalist entrepreneurs “gain wealth by providing products and services that people buy of their own free will.” Capitalists “assess risk and demand a thousand times every day and are regarded with profits or punished with losses depending on how well them serve customers.”
Socialism is the antithesis of capitalism. Socialism, as defined by a popular socialist website, “is a political and economic theory of social organisation which advocates that the means of production, distribution, and exchange should be owned and regulated by the community as a whole, rather than by private individuals.” This is why Karl Marx (1818–1883) called for the abolition of private property. In actuality, it is not “the community as a whole” that owns anything, it is the government. As Mises perceptively pointed out, “It is the aim of Socialism to transfer the means of production from private ownership to the ownership of organized society, to the State.” As explained by DiLorenzo, socialism involves “the government imposition of one plan for all of society” and “the forceful substitution of government plans for individual plans.” The result of socialism, according to Mises, “is full government control of every sphere of the individual’s life and the unrestricted supremacy of the government in its capacity as central board of production management.”
Although socialism was originally just a designation for public, that is, government, ownership of the means of production in contrast to private ownership that characterizes capitalism, as DiLorenzo points out, socialism has “evolved in the 20th century to mean income redistribution in pursuit of ‘equality,’ not through government ownership of the means of production but through the institutions of the welfare state and the ‘progressive’ income tax.”
Socialist candidates
Bernie Sanders is not alone. Self-described socialist candidates are now running for high-profile offices — like the mayor of large cities. Some elections to state offices and many county and municipal elections are off-year contests that require people to go to the polls in November of odd years instead of even years when elections for federal offices (senators, representatives, and president) and most state offices are held. Such is the case this year in the mayoral elections held in the large cities of Minneapolis and New York City.
Omar Fateh is a Muslim democratic socialist running for the mayor of Minneapolis. He won the city’s Democratic mayoral primary. Born in Washington, D.C., he is the son of immigrants from Somalia who holds two degrees from George Mason University. Five years ago, he became the first Muslim and the first Somali-American elected to the Minnesota Senate, where he introduced legislation to make Minnesota public colleges and universities tuition free for students from families with incomes less than $80,000 a year. Fateh supports increasing the city’s minimum wage, increasing the supply of affordable housing via “rent stabilization,” issuing IDs to undocumented immigrants, replacing some of the police department’s duties with community-led alternatives, and securing a statewide “living wage” for Uber and Lyft drivers.
Zohran Mamdani is a Muslim democratic socialist running for the mayor of New York City. He won the city’s Democratic mayoral primary. He was born in Uganda to parents of Indian descent, and has lived in New York City since he was seven. His father is a professor at Columbia University. Mamdani, whose college degree is in Africana studies, has been a member of the New York State Assembly since 2021. He aims to make living in New York City — one of the most expensive places to live in the United States — “affordable.” He supports rent control, fare-free city buses, raising the city’s minimum wage, single-payer healthcare, increasing taxes on “more expensive homes in richer and whiter neighborhoods,” city-owned grocery stores that will sell food at low prices, making New York City an LGBTQ+ sanctuary city, free childcare for children up to five years old, raising the corporate tax rate, and adding a 2 percent income tax on millionaires. He has even said that he wants to abolish billionaires: “I don’t think that we should have billionaires because, frankly, it is so much money in a moment of such inequality.” Mamdani has been endorsed by Bernie Sanders.
Republicans are fuming about the likely election of Fateh and Mamdani as the mayors of Minneapolis and New York City. They are having a field day warning about the dangers of socialism. Representative Andy Ogles of Tennessee referred to Mamdani as “little Muhammad” and “an antisemitic, socialist, communist who will destroy the great City of New York” and who “needs to be deported.” Representative Nancy Mace of South Carolina implied that Mamdani was somehow tied to the 9/11 terrorist attacks. Not to be outdone by any other Republican, President Trump mocked Mamdani as a “100% communist lunatic” who “looks terrible.” But Republicans ought to look in the mirror. Socialism is already entrenched in American society, and with their full support.
American socialism
Socialized education. Every state constitution has a provision for state and local schools, colleges, and universities. Although the federal government does not directly educate anyone, it exercises control over state-provided education via bilingual-education mandates, math and science initiatives, Title IX mandates, school accreditation, antidiscrimination policies, standardized-testing requirements, school breakfast and lunch programs, federal standards, desegregation orders, special-education mandates, funding of K-12 schools, and research grants to colleges and universities. Every property owner is taxed to fund local public schools even if he has no children in school or pays tuition to send his children to a private school. Education is a service that should and can be provided by private entities on the free market. There is nothing inherently unique about education which necessitates that the government provide it or pay for it. No American should be forced to pay for the education of any other American or their children.
Socialized alcohol. There are in the United States 17 states in which the state government has a wholesale and/or retail monopoly over some or all types of alcoholic beverages, especially distilled spirits. In some states, private liquor stores are strictly prohibited and the state government owns and operates all the liquor stores. The government decides where the liquor stores will be located, determines which brands will be stocked, chooses which size products will be offered for sale, sets the prices of the products sold, establishes what the operating hours of the store will be, and hires and pays the employees. In other states, alcohol is controlled by the state government just on the wholesale level. Retail stores in these states are basically state-contracted liquor stores that are only allowed to purchase distilled spirits from the government. Alcohol should not be treated any different from any other commodity sold on the free market. No business or restaurant should have to have a special license to sell it.
Socialized mail delivery. The socialism that has been around the longest in America is the U.S. Postal Service (USPS). It is actually older than both Constitution and the Declaration of Independence. The postmaster general was actually once a cabinet position. By law, only the Post Office is allowed to deliver regular mail, and mailboxes can be used only for the deposit of outgoing mail to the Post Office or incoming mail from the Post Office. UPS and FedEx are only allowed to deliver overnight letters and packages. Throughout history, private mail entrepreneurs were all shut down by the government. Yet, although Congress is given power under the Constitution to “establish Post Offices and post Roads,” no monopoly on mail delivery was granted to the government. The Postal Service loses billions of dollars every year. However, the real problem is the postal monopoly on the delivery of letters. Private entities should be permitted to compete on the free market for the delivery of letters.
Socialized retirement. Social Security is funded by a 12.4 percent payroll tax (split equally between employers and employees) on the first $176,100 of employee income. Self-employed persons pay the full 12.4 percent tax. One must pay Social Security taxes for a minimum of 40 quarters (10 years) to be eligible for benefits. Most Americans believe that they are entitled to Social Security benefits because they have earned it by paying into the system their entire working lives. But from the very beginning, there has been no connection between the Social Security taxes paid and the benefits received. Benefits are based on an arbitrary formula that Congress can change at any time. The retirement age is arbitrarily set by the government for every member of society without regard to anyone’s health or wealth. Although no one has to apply to receive Social Security benefits, all working Americans are forced to “contribute” to the system whether they want the benefits or not. Employers who fail to withhold Social Security tax from their employees’ paychecks can face criminal charges. Social Security is a pay-as-you-go system in which the benefits paid to retirees come out of the taxes paid by current workers. But no American should be forced to pay for the retirement of any other American. Individuals — with the assistance of family, friends, employers, organizations, and investment advisors — are responsible for ensuring that they have money put aside or invested for retirement or to take care of their loved ones in the event of their death or disability.
Socialized train service. Most Americans who take a train ride across the country probably don’t realize that the National Railroad Passenger Corporation (NRPC), otherwise known as Amtrak, is a government corporation. Amtrak was created by Congress in 1970 to take over the majority of the intercity passenger rail services previously operated by private railroad companies in the United States. The Amtrak board of directors, which is appointed by the president and confirmed by the Senate, includes the U.S. secretary of transportation. Amtrak employs more than 22,000 people, operates over 300 trains daily, and carries over 32 million passengers a year. Although Amtrak was supposed to be “a for profit corporation,” it has always relied heavily on government subsidies. But the profitability of Amtrak is not the issue. Railroad freight service is carried out by private corporations and there is no reason why passenger rail service could not be as well. The passengers who ride the trains should be the ones paying for the privilege.
Socialized medicine. The two largest social programs after Social Security are Medicaid and Medicare. Medicaid is government-funded health care for poor Americans of any age and people with certain disabilities. It is the primary source of health-insurance coverage for low-income populations and nursing-home long-term care, and covers about 70 million Americans. Medicaid is jointly financed by the federal and state governments, but designed and administered by state governments within federal guidelines.
Medicare is government-funded health care for Americans 65 years old and older and for those who are permanently disabled or have end-stage renal disease or ALS (Lou Gehrig’s disease). It covers more than 55 million Americans, most of whom become eligible for Medicare when they reach age 65, regardless of their income, assets, health status, or need. Medicare is funded by a 2.9 percent payroll tax (split equally between employers and employees) on every dollar of employee income. High-income workers pay an additional 0.9 percent tax on their earnings above a threshold. Self-employed persons pay the full amount of the tax. One must pay Medicare taxes for a minimum of 40 quarters (10 years) to be eligible for benefits. There is no relation between the Medicare taxes paid and the benefits received. And then there is the Children’s Health Insurance Program (CHIP), a partnership between federal and state governments that provides federally funded health insurance to children in families with incomes too high to qualify for Medicaid and the government insurance exchanges that help millions of Americans purchase health insurance subsidized by the federal government. Like education, health care is a service that should and can be provided by private entities on the free market. There is nothing inherently unique about health care which necessitates that the government provide it or pay for it. No American should be forced to pay for the health care or health insurance of any other American or their children.
Socialized charity. There are in the United States about 80 means-tested welfare programs that limit benefits or payments on the basis of the beneficiary’s income or assets. Some of these programs provide subsidies (Section 8 housing vouchers and LIHEAP). Some of them provide EBT cards to purchase food (SNAP and WIC). And some of them provide cash payments (SSI and TANF). And then there are the obscure welfare programs that few Americans have ever heard of unless they or their family receive benefits from them. The total cost at all levels of government for all of the means-tested welfare programs is more than $1 trillion annually. Although Americans are allowed to give their money to charitable causes, the federal government has a monopoly on charity that crowds out private-sector charitable giving. Not only is it never right for government to take money from anyone against his will and redistribute it; no one is entitled to receive government benefits. All charity should always be private and voluntary.
Republicans for socialism
As much as Republicans try to label mayoral candidates Fateh and Mamdani as socialists and distance themselves from them, they fully support all of the socialism that currently exists in America. In fact, it was under a conservative Republican administration that the United States adopted the largest expansion of socialism since Medicare and Medicaid were established in 1965: the Medicare Prescription Drug, Improvement, and Modernization Act. It was passed by a Republican-controlled Congress in 2003 and signed into law by a Republican president. Republicans also failed to repeal Obamacare when they had the chance during Trump’s first presidential term. Repealing Obamacare is not even mentioned any more. The Trump administration has already essentially nationalized U.S. Steel. Republicans are not only content to live in a socialized society but brag about saving Social Security and Medicare for seniors — two of the largest, most expensive, and most socialistic government programs in existence. When it comes to candidates running in the November election, it doesn’t matter what their party is: they are all socialists now.
The post They Are All Socialists Now appeared first on The Future of Freedom Foundation.
