Marc Jampole: What exactly are “capitalism” and “socialism”?

In the newspeak of political name calling, a New York Times reporter calls government ownership “capitalism,” and Senate Majority Leader Mitch McConnell says granting statehood to Puerto Rico and Washington, DC would lead to “socialism.” It’s time to review the meanings of these terms.

The problem with the news media talking about socialism in the context of the current election cycle is that most people—including most reporters and columnists—have no idea what socialism is and only a fuzzy notion of what capitalism is. What’s worse is that popular but inaccurate or misconceived definitions of the two words confuse the issue. A reporter may use the technical definitions of socialism and capitalism in an article, but her readers understand one of the several non-technical meanings of the two words, and may therefore not get the point of the article. It is more likely, however, that the reporter is misusing the words. Too often these words serve as mirrors—reflecting to the viewer whatever the viewer already thinks.

Two particularly absurd recent examples of people who influence our thinking not understanding or pretending not to understand what socialism is come from the New York Times and Senate Majority Leader Mitch McConnell.   

In an article titled “An Austerity Workaround for U.K. Cities: Going Into Business,” Times reporter Peter S. Goodman details how a few local governments in the United Kingdom have addressed the devastating crisis in local government services caused by the extreme austerity program of the national government led by the Conservative Party. Towns such as Preston and Ashford are going into business or investing in real estate. In other words, these local governments are owning and managing the means of production, which is the classic definition of socialism. And yet, here is what Goodman writes: “Other communities have doubled down on capitalism…” The bolding and italics are mine, to make sure no one misses the sheer stupidity of saying that a government setting up a business is capitalism. The entire point of capitalism is putting ownership of the means of production into the hands of private citizens.  Take the definition of capitalism supplied by Merriam Webster’s” “An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.” 

On the surface, the easiest explanation for Goodman’s ridiculous statement is that he confused the “means of production” with “the free market.” He neglects the primary technical definition of socialism—government ownership of the means of production—and replaces it implicitly with a definition that most conservative thinkers would endorse—“interference of government into the free market.” There are two problems with this explanation. First and more significant for a discussion of socialism versus capitalism in the United States is the fact that no free market has ever existed without a large number of constraints imposed by government. Conservatives call unions, minimum wage laws, environmental and safety regulations and consumer finance standards “socialist,” but do not apply the same label to regulations that support the fossil fuel and banking industries. Moreover, no one ever thinks of labelling as socialist the standardization of weights and measures, engineering standards for buildings and equipment, laws enforcing contracts, the building of free roads and inexpensive sewer systems, the placement of airports and mass transit stops, laws against slavery and indentured servitude, and hundreds of other business customs backed by law. These standards and laws control how the free market operates much more than the issues about which politicians typically fight. So if you include government control of the market as an aspect of defining socialism, then all economies in all epochs have been socialist—the question is how much or how little, and, as the Latins used to say, cui bono: who benefits from the socialist acts? 

This confusion of definitions should still not lead to the conclusion that a government that goes into business is engaged in a capitalist activity. Since it involves government control over production and distribution, what is happening in Preston and Ashford is full-fledged, red-as-blood socialism. 

For illumination on why Goodman would make such a goof and his editor miss it, we need to turn to Mitch McConnell’s appalling misuse of “socialism” in his well-reported statement that granting statehood to Puerto Rico and the District of Columbia would be “full bore socialism on the march.” His reasoning in that the two states would likely send four Democratic senators to Washington, which would be bad for the GOP agenda. 

In other words, socialism = bad and capitalism = good. I believe that since World War II, these value judgments serve as the commonly understood definition of the two words when used by politicians of both parties, the mainstream media and the rightwing propaganda media that developed after President Ronald Reagan dropped the Fairness Doctrine. (The Fairness Doctrine forced broadcast outlets to present both sides of any issue and thus prevented the emergence of the one-sided coverage now presented by Fox News, Sinclair Broadcasting and others.)

While the demonization of socialism started almost from the day that workers organized the first American labor union in the mid-19th century, it became de rigor for the mainstream news media and all Republicans and Democrats during the fifty odd years that we considered the Soviet Union as our enemy. Practically everyone in the American market of ideas in the 1950’s, 60’s, 70’s and 80’s equated communism with socialism. Soviet style communism is an extreme form of ownership of the means of production by an unelected government run by an oligarchy organized into a political party. The Cold War made us ignore the democratic and more attractive socialist and mixed economy models (which McConnell and company would call socialist) that exist throughout Scandinavia and Western Europe. 

The idea that socialism = bad and capitalism = good stands behind McConnell’s wild statement that granting statehood to DC and PR would be an act of socialism. It stands behind Louisiana Republican Representative’s statement that “socialism will be the prevailing theme of the 2020 election” and Iowa Republic Senator Joni Ernst’s assertion that the people of the Hawkeye State should send her back to the Senate to ”stamp out socialism.”

None of them are talking about government ownership of the means of production, except when it comes to their desire to end public schools and the Veterans’ Administration healthcare system. They are talking primarily about government intervention into the economy that constrains businesses from doing whatever they damn please or about government efforts to redistribute the added value produced from the economy. Currently, an overwhelmingly large share of added value goes to the superrich, with the merely rich and the upper reaches of the middle class getting some scraps off the table. 

Right-wing politicians also use “socialism” as part of their complicated but easy-to-understand racial code language—helping minorities is another act of “socialism.” They don’t care whether something actually is socialist or not. They use the word “socialist” as if it were a bad curse that a little child screams at an adversary on the playground.

Through years of misuse and confusion, the media and politicians—donkeys and elephants—have pretty much established the idea that socialism is always bad. The problem is that a majority of citizens like virtually all of what Republicans call the socialist agenda. Survey after survey shows that Americans want universal healthcare of some sorts. They want to raise the minimum wage. They want the government to act aggressively to address the problems caused by human-made global warming. They would like to raise taxes on the wealthy. They want to reign in the banks and large corporations with regulations that protect consumers. 

According to a recent study, 43% of Americans embrace some form of “socialism.” I’m fairly certain that this large group doesn’t really know what socialism entails, but have heard right-wingers refer to so many government programs they like as socialist that they believe that they themselves have become socialists, or fellow travelers.  

As the election heats up, expect more and more Republicans to employ “socialism” as a curse word. And while it may work with some older and uneducated voters, younger voters, minorities and educated folk living in urban areas are less likely to fall for the name-calling than in former generations. When they hear “socialism” applied to universal healthcare or infrastructure programs, they are not going to care, and may even realize that the term as used by the GOP translates into nothing more or less than “bad,” “dirty,” “un-American” or “evil,” just a cheap invective with no real meaning.

Copyright 2019 Marc Jampole