Trump's advisers slander socialism: a reply to White House lies

On 20 October 2018, the White House published a document, entitled ‘The Opportunity Costs of Socialism’, which recognises the rising popularity of socialism in the United States (particularly amongst the young) and attempts to provide a scientific rebuttal in favour of capitalism. Alan Woods, editor of In Defence of Marxism, replies to this document’s slanders, and investigates why socialist ideas are gaining ground in the United States of America.

Recently, a group of specialists in Donald Trump’s White House produced a 76-page report on socialism, which they evidently see as a growing threat in the United States of America. The report can be read in full here.

The authors of the report are members of what is called the Council of Economic Advisers. This is how the Council describes itself:

“The Council of Economic Advisers, an agency within the Executive Office of the President, is charged with offering the President objective economic advice on the formulation of both domestic and international economic policy. The Council bases its recommendations and analysis on economic research and empirical evidence, using the best data available to support the President in setting our nation's economic policy.” (Our emphasis.)

In view of the fact that the policies pursued by the present incumbent of the Oval Office are considered to be highly questionable from the point of view of many strategists of capital, one might suspect that the objective advice provided by the CEA is not of the highest possible quality. These suspicions are amply confirmed by their advice in relation to socialism.

But let us suspend judgement until we have examined at least the main lines of this interesting document.

DSA demo Image Flickr ufcw770A group of specialists in Donald Trump’s White House produced 76-page report on socialism, which they evidently see as a growing threat in the United States of America / Image: Flickr, ufcw770

The brave little tailors in the White House

In the children’s story, the brave little tailor – the hero, annoyed by the buzzing of flies around his jam sandwich – swats them with the newspaper or something (we’re not sure that newspapers were available in those days), killing seven of the pesky insects. Proud of his exploits, he parades around the town with a belt that says “seven at one blow.” People naturally assume that this refers to seven men, not seven flies. Consequently, his fame grows exponentially, he faces and defeats several giants, marries a princess, becomes king, and lives happily ever after.

The achievements of the CEA (as we will call it henceforth) are comparable to those of the brave little tailor, only on a far vaster scale. The intellectual representatives of the White House (if we may be so bold as to describe them thus) do not walk around the streets with a belt, but publish their adventures in the realm of ideas in the mass media.

But despite superficial resemblances, there is a difference between the two. Whereas the little tailor in the story was quite unconscious of his actions, the ones in the White House who stitched together this sorry document are very conscious of the fact that in order to discredit the ideas of socialism, they must resort to the most brazen kind of trickery. These tricks may well serve to deceive gullible folks, but for those of us who still have a brain with which to think, the deceit is so transparent as to verge on the comical, like so much that emerges from the White House these days.

It is very significant that they would go to such lengths to “scientifically” debunk socialism, although this boils down to a vulgar caricature, or, as some folks like to describe it, fake news. It sets up a straw man in order to knock it down again. The main trick is to equate socialism either with bureaucratic-totalitarian Stalinism or social-democratic reformism. Both analogies are false, as we will show.

Marx is back!

The document commences with a striking flourish:

“Coincident with the 200th anniversary of Karl Marx’s birth, socialism is making a comeback in American political discourse.” (My emphasis, AW.)

On this judgement there can be no two opinions. The striking success of Bernie Sanders’s campaign, the growth of the Democratic Socialists of America and many other symptoms show a striking change of attitudes in America towards socialism.

Not so long ago, socialism in the USA was equated with Communism, which in turn was equated with Stalinist Russia, which in turn was equated with the Evil Empire, which, as we all know, was equated with the sinister realm of Satan, the Antichrist and everything that was contrary to apple pie, motherhood, and every other well-known American value.

For decades, the American public has been fed on a steady diet of this kind of thing. It is therefore surprising to many that recent opinion polls have indicated a significant shift in the attitude of ordinary Americans to socialism. This is causing rising alarm among conservative commentators, including in Donald Trump’s White House.

Statues of Karl Marx and Friedrich Engels Adam Jones Ph“Coincident with the 200th anniversary of Karl Marx’s birth, socialism is making a comeback in American political discourse.” / Image: Gage Skidmore

The fears are well founded. The growing support for socialist ideas is well documented. Here are just a few examples. Nearly half of millennial Democrats say they identify as a socialist or democratic socialist, according to a new poll from BuzzFeed News and Maru/Blue. Almost half, 48 percent, said they would call themselves a democratic socialist or socialist, compared to 39 percent who said they identified as neither.

The percentages were naturally lower among Republican millennials, although, amazingly, 23 percent of those say they would call themselves a democratic socialist or socialist! Nearly twice as many millennials said they at least leaned toward Democrats instead of Republicans, 48 to 25 percent, while 19 percent of those surveyed identified as independent.

For the first time in Gallup’s measurement over the past decade, self-identified Democrats have a more positive image of socialism than they do of capitalism. Attitudes toward socialism among Democrats have not changed materially since 2010, with 57 percent today having a positive view. The major change among Democrats has been a less favourable attitude toward capitalism, dropping to 47 percent positive this year—lower than in any of the three previous measures, although Republicans remain much more positive about capitalism than about socialism (16 percent are positive about socialism), with little sustained change in their views of either since 2010.

An article that appeared in the pages of The National Review on March 18, 2017, under the interesting headline: Socialism’s Rising Popularity Threatens America’s Future, comments:

“‘The most alarming result, according to [George] Barna, was that four out of every ten adults say they prefer socialism to capitalism,’ the ACFI noted in its commentary on the poll. ‘That is a large minority,’ Barna said, ‘and it includes a majority of the liberals—who will be pushing for a completely different economic model to dominate our nation. That is the stuff of civil wars. It ought to set off alarm bells among more traditionally oriented leaders across the nation.’ That 40% of Americans now prefer socialism to capitalism could spell major change to the policies advanced by legislators and political leaders and to the interpretations of judges ruling on the application of new and pre-existing laws.”

In case anyone has not understood the seriousness of the situation, the article is introduced by a suitably dramatic subheading: Too many of us have forgotten the lessons of the Cold War. The White House document underlines the point:

Detailed policy proposals from self-declared socialists are gaining support in Congress and among much of the electorate.”

Insofar as the document refers to the electorate (i.e., the population at large) this observation is correct. But the notion that the US Congress is awash with Reds stretches the imagination of even the most fertile brain. Evidently, what the White House intellectuals mean to say is that there are some people in Congress who favour such revolutionary ideas as the right of the American people to universal healthcare, free education, guaranteed minimum income, and other such preposterous proposals that are clearly subversive to free market ideals.

Sad to say, there is not a great deal of evidence to support the view that the Democrats in Congress are about to raise the red flag over Capitol Hill. The modest proposals mentioned above are very far from revolutionary, or at least they would not be regarded as such by any relatively civilised society. Many of them exist, to one degree or another, in Scandinavia, Britain, France, and Germany, and do not appear to have subverted the capitalist order in the slightest degree.

That there is now a degree of tepid support for “socialism” among some Democrats in Congress is obviously an indication of a change as compared to virtually zero support in the past. But it by no means represents a sudden conversion of the Democrats to genuine socialism. What it does indicate is a growing pressure from below on Congress by millions of Americans who are increasingly discontented with the law of the jungle that has dominated their lives until now.

The report continues: “It is unclear, of course, exactly what a typical voter has in mind when he or she thinks of ‘socialism.’” This is regrettably true. But while it may be the case that most people do not know exactly what they want, it is also true that they know perfectly well what they don’t want. They do not wish to live in a society where millions of people are denied elementary healthcare, which ought to be the inalienable right of people in any semi-civilised society. They do not want to be exploited by rapacious capitalist employers who pay pittance wages for long hours of hard labour.

Nor do they want to be lorded over by a tiny clique of obscenely rich bankers and capitalists who produce nothing but own and control everything. They are fed up with the old system whereby well-heeled politicians—both Republicans and Democrats—are in the pockets of Wall Street, and rule according to the interests of their class to the detriment of the interests of the overwhelming majority.

Decades of anger, indignation, and frustration, which have been accumulating gradually beneath the surface, have finally begun to explode. In a peculiar way, even the election of Donald Trump reflected this anger. But Trump, himself a billionaire, does not represent the interests of the majority of working-class Americans. In essence, he represents the same class interests as Hillary Clinton: those of the bankers and capitalists, although he does this in his own particular way that is not always to their liking.

Words, words, words…

Having dispensed with the preliminaries, the CEA now starts to get down to business:

“[…] economists generally agree about how to define socialism, and they have devoted enormous time and resources to studying its costs and benefits. With an eye on this broad body of literature, this report discusses socialism’s historic visions and intents, its economic features, its impact on economic performance, and its relationship with recent policy proposals in the United States.”

One of the unfortunate characteristics of modern capitalism and its intellectual gurus is the constant debasing of the English language. Words are constantly being twisted and distorted beyond all recognition, frequently turning into their opposites. Thus, nobody has any problems these days, but only “issues.” People are no longer killed, but merely “taken out.” There are no innocent civilian casualties in wars any more, but only “collateral damage.” This kind of thing carries George Orwell’s Newspeak to a new level of sublimity.

The authors of the present report did their level best to continue developing the gentle art of linguistic obfuscation. A case in point is the phrase “opportunity costs.” But at least they make an attempt at a dictionary definition of their strange vocabulary. An "opportunity cost" is defined as "the loss of potential gain from other alternatives when one alternative is chosen."

That we are faced with several different opportunities is self-evident even to a not-very-intelligent-child of six. But what specific alternatives are we talking about? One alternative is what already exists. It is known as capitalism. That means, in very simple language: an economic system where everything depends on one thing: production for profit. The lives of millions of men and women are determined under capitalism by this simple fact.

As long as the capitalists and bankers can obtain what they consider to be a suitable level of profit by squeezing the labour of the workers, they will continue to produce, people will have jobs, and may even get a few crumbs from the rich man’s table. But if the capitalists are not getting what they consider to be a suitable reward for their ‘labour’ (what that labour actually consists of is a debatable question), they will close the factories as if they were matchboxes, throwing workers onto the streets without the slightest compunction, destroying whole communities and reducing an entire generation to despair.

This is actually what has happened to many American workers. Formerly prosperous areas, where large-scale industries produced goods on a massive scale, have been reduced to industrial deserts. In Pennsylvania, Ohio and Michigan, northern Indiana, eastern Illinois, and Wisconsin, mines and factories have been closed, communities decimated and millions of American citizens reduced to levels of poverty, misery and despair not seen since the 1930s.

It was the rejection of this so-called alternative that was largely behind the desperate search for another way that was very clear during the last presidential election. It was expressed in the rise of Donald Trump, who demagogically appealed to the millions of Americans that had been thrown on the scrapheap by the capitalist system. His rhetoric struck a chord with people that other politicians failed to notice or did not even mention. It was this, and not any “Russian interference” that determined the results of the presidential election.

Trump and Sanders

However, there is another side to this question. When Bernie Sanders first announced his candidature, very few Americans had even heard of him. On the other hand, everybody had heard of Hillary Clinton. Yet within a very short space of time, Bernie Sanders shot up in the polls. His meetings were attended by tens of thousands of enthusiastic people, overwhelmingly young in age, who are looking for an alternative.

Bernie Sanders rally Image Benjamin KerensaBernie Sanders's meetings during the 2016 primaries were attended by tens of thousands of enthusiastic people, overwhelmingly young in age, who are looking for an alternative / Image: Benjamin Kerensa

In these mass meetings, Sanders spoke about socialism, attacked the rich and powerful, and even spoke of the need for a political revolution against the billionaire class. And the speeches struck as a responsive chord, not only with his own supporters, but also with many people who supported Donald Trump. In fact, Sanders was the only candidate who could have defeated Trump. In the end, predictably, the establishment of the Democratic Party did the dirty on Bernie Sanders, who, unfortunately, accepted it and called on people to vote for Hillary Clinton—correctly seen by many people as the candidate of Wall Street. The result is well known.

The great American writer Gore Vidal once explained that “our republic has one party—the property party—with two right wings." There is not much more one could add to that remarkable definition of American politics. Sanders’ big mistake was to tie his campaign to the Democratic Party, which is a capitalist party no less than the Republican Party.

What is socialism?

Now, at last, the authors of the document attempt to tell us what socialism actually is:

“To economists, socialism is not a zero-one designation. Whether a country or industry is socialist is a question of the degree to which (a) the means of production, distribution, and exchange are owned or regulated by the state; and (b) the state uses its control to distribute the economic output without regard for final consumers’ willingness to pay or exchange (i.e., giving resources away ‘for free’). As explained below, this definition conforms with both statements and policy proposals from leading socialists, ranging from Karl Marx to Vladimir Lenin to Mao Zedong to current American socialists.”

The definition of socialism provided by these anonymous economists comes straight out of the “Red Scare” era of American politics. Under socialism, we are informed, everything will be in the hands of the state—that monstrous, oppressive, bureaucratic state that wishes to control every aspect of our lives and reduce us to the level of slaves. Worse still, in an economy where production, distribution and exchange are “owned or regulated by the state,” the “economic output” (whatever that might mean) will be distributed “without regard for final consumers’ willingness to pay.” That is to say—horror of horrors! — “giving resources away for free.

The notion of giving anything away for free will send shivers up the spine of every self-respecting businessman and banker from the Florida Keys to Alaska. This monstrous idea would spell the end of civilisation as we know it! But let us analyze the question in a little more detail. First of all, let us advance our own very simple definition of the fundamental difference between socialism and capitalism. Capitalism, as we have said, is production for private profit. Socialism is production for the satisfaction of human needs. If we stick to these two fundamental ideas, there can be no question of any confusion on the issue.

Let us take the present situation. In the first decades of the 21st century, we live in a world where the productive forces have been developed to such an extent that, for the first time in human history, we can honestly say there is no need for anyone to starve, there is no need for anybody to be homeless, there is no need for any child to die for the lack of clean water or elementary medical care, and there is no need for anyone to be illiterate.

There is no need for any of these things in the modern world. And yet all of these things exist on a vast scale, not only in what used to be called the “Third World”—Africa, Asia and Latin America—but also in the advanced capitalist countries, including the United States, the richest country on earth.

“Willingness to pay”

There is an unbridgeable gulf separating the theory of capitalist “free market economy” and its practice. The document speaks of the “willingness” of consumers to pay. What they really mean is their ability to pay. Everybody would be willing to pay for a comfortable apartment in New York or San Francisco—if only they could. The problem is that the monstrous price of accommodation in big American cities places even such an elementary requirement as a home beyond the reach of many, if not most, Americans.

Here we return to the fundamental difference between socialism and capitalism. Under capitalism, commodities are only produced where there is a demand for them. But here, the word demand must be defined correctly. There is a huge difference between demand in the abstract, and what the economists refer to as effective demand. There is obviously a huge demand for housing in the USA, as there is in Britain and all other countries. Unfortunately, effective demand is another thing altogether.

Homelessness Image Flickr Steve RhodesThe high cost of housing is one of the main scandals of the period in which we live / Image: Flickr, Steve Rhodes

The celebrated French writer, Anatole France, once wrote that: “The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.” This phrase is highly applicable to the present situation in the USA. Of course, everybody under capitalism enjoys freedom of choice. But for millions of poor people, the much-vaunted choice offered by the market economy is to choose whether to sleep in a doorway or under a bridge.

The high cost of housing is one of the main scandals of the period in which we live. The millions of homeless people who display a most fervent willingness to acquire a roof over their heads, are regrettably lacking in the wherewithal to transform this abstract willingness into an actual purchase.

Is there incentive under capitalism?

The document continues:

“We find that historical proponents of socialist policies and those in the contemporary United States share some of their visions and intents. They both characterize the distribution of income in market economies as the unjust result of ‘exploitation,’ which should be rectified by extensive state control.”

We note that the word exploitation is placed in inverted commas. This implies that capitalist exploitation does not exist. According to this, the profits of the capitalist class must come out of thin air. The relationship between capital and wage labour is supposed to be entirely harmonious, equal and equitable. And we all lived happily ever after.

Any American worker knows that this is just a fairy tale. The relations between workers and capitalists are not at all harmonious, but entirely antagonistic. This must be the case, for the simple reason that the profits of the capitalists are derived from the unpaid labour of the working class. And they cannot be derived from anything else. The authors of the document dismiss the concept of “exploitation” as a “complaint” by the left. They refer coyly to the “distribution of income in market economies.” But they do not tell us what this distribution is. Let us take a moment to enlighten them.

Chicago teachers Image Chicago ManThe relationship between capital and wage labour is supposed to be entirely harmonious, equal and equitable. But any American worker knows that this is just a fairy tale / Image: Chicago Man

The statistics show that there is a long-term increase in inequality between the wealthiest layers of American society and the poorest. After the Great Depression of the 1930s, the gap between rich and poor actually narrowed. Now the opposite tendency can be seen. At present, one quarter of American workers make less than $10 per hour, which is below the federal poverty level. Between 1979 and 2007, household income increased 275 percent for the wealthiest 1 percent of households. It rose 65 percent for the top fifth. The bottom fifth increased by just 18 percent.

According to the US Census Bureau’s 2017 estimates, 12.3 percent of America’s population (39.7 million people) were living in poverty according to the official measure. The survey is sent to US households, so the poverty estimates do not include those who are homeless. These figures also exclude military personnel who do not live with at least one civilian adult, as well as incarcerated adults.

Other estimates are still higher. According to the Census Bureau, 18.5 million people reported deep poverty, which means a household income below 50 percent of their 2017 poverty threshold. These individuals represented an estimated 5.7 percent of all Americans and 46.7 percent of those in poverty. Most low-wage workers receive no health insurance, sick pay or pension plans from their employers. These workers cannot afford to be ill and have no hope of ever retiring.

The meaning of capitalist exploitation

Karl Marx explained long ago that the profits of the capitalists are really the unpaid labour of the workers. The relationship between wage labour and capital is therefore intrinsically antagonistic. This is true even in favourable periods, when wages are rising, as Marx points out:

“We thus see that, even if we keep ourselves within the relation of capital and wage-labour, the interests of capitals and the interests of wage-labour are diametrically opposed to each other.

“A rapid growth of capital is synonymous with a rapid growth of profits. Profits can grow rapidly only when the price of labour – the relative wages – decrease just as rapidly. Relative wages may fall, although real wages rise simultaneously with nominal wages, with the money value of labour, provided only that the real wage does not rise in the same proportion as the profit. If, for instance, in good business years wages rise 5 per cent, while profits rise 30 per cent, the proportional, the relative wage has not increased, but decreased.

“If, therefore, the income of the worker increased with the rapid growth of capital, there is at the same time a widening of the social chasm that divides the worker from the capitalist, and increase in the power of capital over labour, a greater dependence of labour upon capital.

“To say that ‘the worker has an interest in the rapid growth of capital’, means only this: that the more speedily the worker augments the wealth of the capitalist, the larger will be the crumbs which fall to him, the greater will be the number of workers than can be called into existence, the more can the mass of slaves dependent upon capital be increased.

“We have thus seen that even the most favourable situation for the working class, namely, the most rapid growth of capital, however much it may improve the material life of the worker, does not abolish the antagonism between his interests and the interests of the capitalist. Profit and wages remain as before, in inverse proportion.

“If capital grows rapidly, wages may rise, but the profit of capital rises disproportionately faster. The material position of the worker has improved, but at the cost of his social position. The social chasm that separates him from the capitalist has widened.” (Marx, Wage Labour and Capital, in Marx-Engels Selected Works, 1970 ed., vol. 1, p. 167)

This is certainly the case in the USA, where profits have been booming, while wages have largely stagnated and the share of workers’ wages in the wealth created by them has fallen significantly. A report by the Economic Policy Institutes (August 2018) states that:

“From 1973 to 2017, net productivity rose 77.0%, while the hourly pay of typical workers essentially stagnated – increasing only 12.4% over 44 years (after adjusting for inflation). This means that although Americans are working more productively than ever, the fruits of their labours have primarily accrued to those at the top and to corporate profits, especially in recent years.”

The rich have got steadily richer after the 2008 financial crisis. In 2012, the top 10 percent of earners took home 50 percent of all income. That is the highest percentage in the last 100 years. By 2015, America’s top 10 percent already averaged more than nine times as much income as the bottom 90 percent. And Americans in the top 1 percent averaged over 40 times more income than the bottom 90 percent.

Since the rich got richer faster, their share of the pie grew bigger. The wealthiest 1 percent increased their share of total income by 10 percent. Everyone else saw their piece of the pie shrink by 1–2 percent. Even though the incomes of the poor improved in absolute terms, they fell further behind when compared to the richest. As a result, inequality is steadily worsening.

Occupy SF October Image lexicon10055805The rich have got steadily richer after the 2008 financial crisis / Image: lexicon10055805

Obscene profits are being made by the big capitalists. The CEO of Marathon petroleum made $19.7 million, 935 times that of one of the company’s median workers ($21,034). Whirlpool's CEO made $7.1 million, 356 times that of its average employee pay of $19,906. Honeywell's average worker pay is $50,000. Its CEO made $16.8 million, or 333 times that.

This trend is not confined to the USA. There is, in fact, a global trend towards increasing income inequality across developing and developed economies. First, real wages have stagnated for the majority of the population despite increasing productivity due to anti-labour policies, which undermine collective bargaining. Second, there has been an increasing accumulation of wealth at the top through decreasing taxes for corporations and people with high incomes.

David Autor, an economist at M.I.T., produced a paper together with four other economists entitled “The Fall of the Labor Share and the Rise of Superstar Firms.” In it we read:

“Industries are increasingly characterized by a ‘winner take most’ feature where a small number of firms gain a very large share of the market.”

Among economists, one of the most-discussed developments is the precipitous decline in the percentage of total economic output flowing to labour. In a 2016 paper, “Declining Labor and Capital Shares,” Simcha Barkai, a professor of finance at the London School of Business, found that the decline in labour share produced a big winner, the profit share, which rose from 2 percent of gross domestic product in 1984 to 16 percent in 2014. Barkai writes:

“To offer a sense of magnitude, the combined shares of labor and capital decline 13.9 percentage points, which amounts to $1.2 trillion in 2014. Estimated profits in 2014 were approximately 15.7%, which is equal to $1.35 trillion or $17,000 for each of the approximately 80 million employees in the corporate nonfinancial sector.”

In other words, shareholders and business owners amassed profits amounting to $1.35 trillion or $17,000 per employee as a result of the increase in profit share. In fact, the gap separating workers and capitalists, rich and poor, is greater now than at any time in the last one hundred years – that is, since the time when Teddy Roosevelt denounced the rapacious rule of what he called the Robber Barons.

What economists’ technical language can mask is that this amounts to a lot of pain for a lot of people. The inexorable growth of inequality between rich and poor in the United States is by no means an invention of the left. It is an empirically verifiable fact that is causing increasing alarm by the staunchest defenders of the capitalist system.

This explains to a large extent why the ideas of socialism are gaining an ever-growing audience in the United States of America. It also exposes the lie that the interests of workers and capitalists are identical and underlines the fact that the fundamental fault line in society is the antagonism between wage labour and capital.

No incentive?

Now for the little matter of motivation. The document informs us that:

“In assessing the effects of socialist policies, it is important to recognize that they provide little material incentive for production and innovation and, by distributing goods and services for ‘free,’ prevent prices from revealing economically important information about costs and consumer needs and wants. To this end, as the then–prime minister of the United Kingdom, Margaret Thatcher (1976), once argued, ‘Socialist governments… always run out of other people’s money,’ and thus the way to prosperity is for the state to give ‘the people more choice to spend their own money in their own way.’”

So now we know: “socialism takes away private initiative and inhibits innovation,” Yes, we know the song, and we know the lyrics too. They have been familiar to us for a long time. But this tedious drone does not become more mellifluous with the passing of time.

But hang on a second! You say that socialism does not provide any initiative for workers. But what initiative do workers have under your system?

Workers in the USA work long hours, often in very bad conditions, and all too often have to take several jobs in order to survive to the end of the month. A worker gets up early in the morning, struggles into work, works right around-the-clock, comes home mentally and physically exhausted, falls asleep in front of the television, then wakes up in the morning and starts the whole wretched routine all over again. Surely people must ask themselves whether this can be described as really living life?

There is a story circulating about Donald J. Trump, which may or may not be true, but is certainly enlightening. The president was invited to a dinner by some of his fellow billionaires in Manhattan. During his after-dinner speech, he boasted in his customary, overblown manner: “I have created a million new jobs.” The waiter – probably a poor Latino immigrant – was heard to remark: “I know, Mr President. I’ve got three of them!”

The capitalists have plenty of material incentives: to acquire huge fortunes by squeezing surplus value out of the sweat of the workers. The latter, by contrast, are only ‘motivated’ by the need to survive, to earn enough to pay the monthly bills and the rent, to stop them and their families being thrown onto the streets. Only in the latter case, the word ‘motivation’ must be replaced by another word: compulsion.

End of the American dream

In the past, we had the so-called American dream. Many people believed that if they worked hard enough, sacrificed, and saved money, one day they might be able to climb out of the working class and become a wealthy businessman or woman. No longer! The American dream has turned into the American nightmare. No matter how hard you work, you never save enough money to change a life. Things always seem to remain the same. In fact, things seem always to be getting worse.

In the past, even poor people could hope that things would be better for their children. Every generation of young Americans could look forward to a life that was better than that of their parents. No longer! Facts and figures prove that the present generation of young Americans cannot expect a better life than their parents. On the contrary, life will get tougher, meaner, more unequal, more unjust and more uncertain than ever before.

On all these facts, the authors of the document have nothing to say. The sum total of their wisdom is to warn the American workers and youth that socialism provides them with no incentive. What possible incentive they have under the present system, they do not say.

“This is an empirical report about socialism that takes as its benchmark current US public policies. This benchmark has the advantage of being measurable, but it necessarily differs from theoretical concepts of ‘capitalism’ or ‘free markets’ because the US government may not limit its activity to theoretically defined public goods.”

It is impossible to understand the meaning of this paragraph – even if one could cut one’s way out of its tangled jungle of grammar and syntax (which in itself would be a considerable achievement). Let us first point out, that, far from being an “empirical report,” there is absolutely nothing empirical about it. Not a single fact is cited to back up a series of unsubstantiated claims and allegations. Yet they have the audacity to claim that this “empirical report,” which is not based on any identifiable facts, has the advantage of being “measurable.”

Never mind measurable! It would be a big advantage if it were at least intelligible.

But that is perhaps asking too much of a White House that follows the mental meanderings of one Donald J. Trump. What is certainly measurable is that in the United States of America, the rich are getting obscenely richer, while the poor are getting continuously poorer. That is a benchmark that is very clear even to the blindest of the blind. Sadly, it does not appear to be clear to the intellectual elite of the White House.

Having struggled with some difficulty to cut through the syntactical and grammatical jungle, we at last reach a clearing. With an audible sigh of relief, the authors of the document have finally arrived at the conclusion:

“Relative to the US benchmark, we find that socialist public policies, though ostensibly well-intentioned, have clear opportunity costs that are directly related to the degree to which they tax and regulate.” (My emphasis, AW)

Our friends in the White House kindly inform us that, although socialists may be well-intentioned, they cannot possibly compete with the huge successes and opportunities presented by the free market economy (referred to here as the “US benchmark”). Why not? Because of the degree to which they tax and regulate.

Now, everybody knows that if there are two words guaranteed to bring dedicated Republicans into a state of apoplectic rage, those words are taxation and regulation. To even utter such words is regarded by them as approximately equivalent to swearing in church on Sunday.

Taxation and regulation are the death of free-market economics, as we all know. The markets work best when there is no government involvement at all. When left to themselves, the markets will solve all the problems. There will be no crises and we will all live happy, productive, and above all, profitable lives.

This comforting theory, which was enthusiastically embraced by Margaret Thatcher, who is warmly quoted in the document, used to be contained in every school textbook. It was repeated ad nauseam in every university seminar room. It occupied a similar place in the shibboleths of political economy as the Ten Commandments in the Bible.

2889974614 df407e1e28 bIt seems the intellectual elites of the White House have learned nothing since 2008 / Image: Flickr, Teri Tyles

Nowadays, a growing number of economists – not necessarily left-wing – have concluded that some degree of regulation is absolutely necessary to prevent the appalling mess that we saw in 2008. They realise that a new crisis is inevitable. And they are quite correct, because such crises are inherent to the capitalist system and quite unavoidable in it.

But our White House intellectuals cannot bring themselves to agree with his. They cannot stomach the idea of regulating the capitalist economy, which, according to them, works perfectly well on its own. The lessons of 2008, or for that matter 1929, are for them a book that is sealed with seven seals.

As for taxation, that is an unforgivable interference in the fundamental motor force of capitalism. It interferes with the holy of holies: profits. Never mind that many schools in the richest country on earth are falling to pieces. Never mind that America’s health system is failing millions of people, and is regarded with horror by the citizens of other countries. Never mind all these things, as long as the profits of the big banks and Wall Street sharks are safeguarded.

Actually, in the US and all other capitalist countries, the bankers and capitalists pay little or no taxes. They pay smart lawyers to find loopholes in the laws, which allow them to salt away billions of dollars in tax havens in the Caribbean and elsewhere. Their continuous harping on the burden of taxation is entirely phony.

In reality, it is the working class and the middle class who pay the lion’s share of the taxes. But that did not prevent Trump from introducing legislation to drastically reduce the taxation of the rich, while giving a few crumbs to the rest. So here we have the real benchmark of US economic policy: rob the poor to help the rich. That is a very fine incentive – to the richest 1 percent of the population, but not at all to the remaining 99 percent.

The “efficient market hypothesis”

The economists present us with a beautiful picture, whereby the free market would solve all our problems without any regulation or interference from the state. According to this theory, supply and demand always balance each other out in the end, so that the market acts as a kind of pendulum, swinging smoothly from one point to another, but always returning to a perfect equilibrium.

The wonderful idea that the capitalist market economy will automatically regulate itself without any interference from the state was enshrined in a theory known as the efficient market hypothesis. This was supposed to be a new idea. As a matter of fact, it was a very old idea. It used to be known as Say’s Law – a piece of nonsense that was systematically demolished by Karl Marx about a 150 years ago.

Unlike the theoretical economists of the university seminar room, the billionaire George Soros has a fairly good understanding of how markets work in practice, since he has made a lot of money out of them. He said the market was not like a pendulum but a wrecking ball – the kind used on construction sites to demolish buildings. He was shown to be correct in 2008, when overnight, the free market economy collapsed like a house of cards.

What did the bankers and capitalists do at that time? Did they say: “The state must not interfere. The markets will sort themselves out in the end.”  No, they did not! They came running to the state with their arms outstretched, demanding large amounts of public money to save them. And then something extraordinary occurred. George W. Bush, a Republican president and a firm believer in free-market economics and no state intervention, came running with an open chequebook. “How much d’ya want, boys? A billion? Take a billion! Ten billion? Here, take it all! After all, it’s only public money.”

And the bankers took it – all of it. That, and the colossal expense of the Afghanistan and Iraq Wars is the origin of the infamous deficit – about which the authors of this document have absolutely nothing to say. The fact of the matter is that in the Year of Our Lord 2008, the capitalist system was bailed out with eye-watering amounts of public money.

Soros Image World Economic ForumGeorge Soros said the market is not like a pendulum but a wrecking ball / Image: World Economic Forum

In the Communist Manifesto, Marx and Engels wrote that “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.” That is precisely what we see here. In 2008 the capitalist system was saved by the intervention of the state – that very same state that was not supposed to play any role in the economy. The private banks and corporations were propped up by the state like a sick man on crutches. Without that, they would have collapsed.

The priority of the capitalist state is to preserve the present order. Its overriding concern is to guarantee the profits of the private sector, that same private sector that wrecked the world economy in 2008. Naturally the boys of the CEA have nothing at all to say about all this. It is too embarrassing to admit that their much-vaunted market economy showed that it was (quite literally) bankrupt and had to be bailed out by the American taxpayer. Nor are they anxious to tell us what the opportunity costs of this operation were, or how the generosity of the US taxpayers was rewarded.  

Let us spell this out in simple language, so that even the members of the CEA can understand it. The private banks and corporations received the equivalent of a huge blood transfusion that drained the public finances dry, leaving them in a state of chronic and life-threatening anaemia. An immense black hole in the private finances of the big banks was miraculously transformed into a gigantic black hole in the public finances. Ever since that time, we have been told that there is no money for schools, health, pensions, roads, houses, or anything else that is not considered a priority by the capitalist system.

Now, if a worker wrecked a machine in a factory, he would be immediately sacked and possibly sued for damages. But if a gang of highly-paid bankers wreck the entire world financial system, they are not sacked, they are not sued, they are not sent to prison for fraud, as they richly deserved. Instead, they are rewarded with vast quantities of public money – money stolen out of the pockets of the poorest, most vulnerable layers of society. It is austerity for those at the bottom and handouts for those at the top. This is Robin Hood in reverse!

Scandinavian socialism?

“Although they are sometimes cited as more relevant socialist success stories, the experiences of the Nordic countries also support the conclusion that socialism reduces living standards. In many respects, the Nordic countries’ policies now differ significantly from what economists have in mind when they think of socialism. For instance, they do not provide healthcare for ‘free’; Nordic healthcare financing includes substantial cost sharing. Marginal labor income tax rates in the Nordic countries today are only somewhat higher than in the United States, and Nordic taxation overall is surprisingly less progressive than US taxes. The Nordic countries also tax capital income less and regulate product markets less than the United States does. However, the Nordic countries do regulate and tax labor markets somewhat more; thus, American families earning the average wage would be taxed $2,000 to $5,000 more per year net of transfers if the United States had current Nordic policies. Living standards in the Nordic countries are at least 15% lower than in the United States.

“It may well be that American socialists are envisioning moving our policies to align with those of the Nordic countries in the 1970s, when their policies were more in line with economists’ traditional definition of socialism. We estimate that if the United States were to adopt these policies, its real GDP would decline by at least 19% in the long run, or about $11,000 per year for the average person.”

This document, which masquerades as a piece of independent, scientific and “empirical” research, is no such thing. The authors have carefully selected pieces of “evidence” in order to show that socialism is a “bad idea.” In reality, however, the very fact that they felt compelled to produce such a document, shows that they are worried about the growing interest in socialism.

Under the pressure of the working class and the labour movement, the capitalist class of certain countries has carried through certain measures in the interest of the workers, such as public health services. That was the case in the Nordic countries in the decades of economic upswing after World War II.

At that time, the capitalists could afford it. But the crisis of capitalism has hit Scandinavia as hard as everyone else, and instead of reforms, we now see cuts and austerity measures. As is stated in the document, it is not true that healthcare is provided as a ‘free’ gift of the state in most Nordic countries. Health care is only free in Denmark. In Norway, Sweden and Finland, it costs money, although there is only a nominal charge of $25–$76, which is intended to deter overuse. But this would be considered an enormous advance by most American workers, compared to the prohibitive costs of healthcare in the States.

Entrance to Amtssygehuset in Aarhus Image Villy Fink IsaksenNordic workers have more benefits than their US counterparts, such as healthcare, education, and housing regulation. However, Scandinavia has joined the rest of the capitalist world in a rapid and never-ending race to the bottom / Image: Villy Fink Isaksen

The dismissive attitude of the authors of the document towards Scandinavia, in any case, is very dishonest. They attempt to present living standards in the USA as superior to the Nordic countries. This is profoundly misleading. Although these countries are very far from being socialist, they are ahead of the USA in many respects, thanks to the conquests made by the labour movement in the past.

The Human Development Index, which includes things such as life expectancy, places the US at number 13 in the world, while Finland is 15. But Denmark 11, Sweden is 7, Iceland is 6, and Norway is number one. Sweden, Norway, Iceland, Denmark and Finland all have a higher life expectancy than the USA.

What is very clear is that Nordic workers have more benefits, such as healthcare, education, and housing regulation. And although the average wage in the US is high, that masks the fact that it is very unequal, with low-paid workers having very little money compared to their Nordic counterparts. In addition, US workers have to work many more hours, or have more than one job, to stay afloat.

But let’s not get too starry-eyed about the so-called Swedish model of “socialism.” The countries of Scandinavia, like all the other European countries, have nothing to do with socialism. They are fundamentally based on private ownership of the means of production and function according to the laws of the free market economy. Certain consequences inevitably flow from this fact.

The welfare state, particularly in Sweden but also in the other Nordic countries, has been severely cut back since the mid-80s. That includes making taxation less progressive and ending subsidies of dental care, etc. Income inequality has also increased dramatically. The Gini coefficient (which measures inequality) in Sweden rose from 0.2 in 1980 to 0.33 in 2013. Homelessness, mental health, stress at work, etc. have become serious problems.

In other words, Scandinavia has joined the rest of the capitalist world in a rapid and never-ending race to the bottom. And this has nothing whatsoever to do with socialism.

Capitalism can seriously damage your health

Relentlessly pursuing their vendetta against Scandinavia—and any other country that shows the slightest leaning in the direction of “socialism”—the document continues:

“The Nordic and European versions of socialized medicine have been viewed as so desirable by modern US socialists that they have proposed nationalizing payments for the healthcare sector (which makes up more than a sixth of the US economy) through the recent “Medicare for All” proposal. This policy would distribute healthcare for ‘free’ (i.e., without cost sharing) through a monopoly government health insurer that would centrally set all prices paid to suppliers such as doctors and hospitals. We find that if this policy were financed out of current Federal spending without borrowing or tax increases, then more than half the entire existing Federal budget would need to be cut. Or if it were financed through higher taxes, GDP would fall by 9%, or about $7,000 per person in 2022, due to high tax rates that would reduce incentives to supply the factors of production. Evidence on the productivity and effectiveness of single-payer systems suggests that ‘Medicare for All’ would reduce both short- and long-run longevity and health despite increasing somewhat the population with health insurance.”

It would appear that the whole of the American Right views the very idea of a free public health service like something out of a horror movie. The very mention of it is sufficient to send good Republicans reaching for their Colt .45s. If the capitalists could bottle the air they would charge us to breathe! Yet a public health service is considered by the overwhelming majority of Europeans—not just in Scandinavia—as a fundamental precondition for a civilised life.

The CEA carefully avoids mentioning the exorbitant profits of the big pharmaceutical companies and HMOs in the USA. They never mention the terrible misery suffered by those millions of Americans without healthcare. They try to conceal the facts by generalising everything, citing GDP averages and income per-capita, instead of looking at the class basis of the unequal distribution of wealth in America. The lack of a decent system of public health remains a gaping hole that disfigures American society.

The authors of the document paint a frightening picture of a monster state crushing American citizens under a mountain of taxation. But if we are to finance decent public services, an adequate level of taxation is clearly necessary. The question is: who should pay the bill?

We have already pointed out that in America, as in every other country, the rich do not pay much in taxes. Almost the entire burden of taxation is placed on the shoulders of the working class and small businesses. That is why the Republican battle cry of “no taxes!” gets a certain amount of sympathy from the public. But there is no reason why taxes should hit the poor harder than the rich.

The very notion that the richest country on earth cannot afford to look after the health and welfare of its citizens is an affront to their intelligence. The question is not whether America can afford to provide good healthcare. The question is: can America afford not to do so? Quite apart from the human cost in suffering, pain and death, there is a very high economic price to be paid for neglecting the health of the population in lost hours, days, weeks and years of labour.

Good healthcare should not be a luxury available only to people on high incomes. It is a necessary investment in the future of society. The American Declaration of Independence put forward the idea that life, liberty and the pursuit of happiness are inalienable human rights. But how can human life be protected if there is no guarantee that the health of the human species will be maintained? And what does the pursuit of happiness amount to if men and women are constantly dogged by the fear of illness or healthcare-related financial ruin?

Freedom from fear is surely also an inalienable right. And it is a condemnation of the priorities of US society today that it places more stress on the right to make profits than it does on the preservation of the health of its citizens. We are in favour of taxing the wealthy and nationalising the healthcare sector in order to pay for free healthcare for all. For a start, all indirect taxation should be abolished as unjust and falling on the shoulders of the people who can least afford it. Instead, this should be a heavily progressive income tax imposed on the people who can most afford to pay—the rich.

But what about Russia?

The defenders of capitalism have been using the scarecrow of Stalinism to frighten people away from the idea of socialism, just as parents try to frighten their naughty children by referring them to the bogeyman. The people of America are not little children, and are not so easily frightened as perhaps they used to be. But that does not stop the defenders of capitalism from dragging in the bogeyman at every available opportunity:

“We begin our investigation by looking closely at the most highly socialist cases, which are typically agricultural economies, such as Maoist China, Cuba, and the Union of Soviet Socialist Republics (USSR). Their nondemocratic governments seized control of farming, promising to make food more abundant. The result was substantially less food production and tens of millions of deaths by starvation.”

Is it really true that the nationalised economy in the Soviet Union never produced anything except a collapse in production and living standards? Let us look at the facts. In 1917, tsarist Russia was a tremendously backward country. In many ways, it was more backward than Pakistan today. Before 1917 there were only around four million industrial workers in a country of 150 million, mostly-illiterate people. In other words, tsarist Russia was substantially more backward than Bolivia or Peru are today. So how did it go from being an extremely backward country to becoming the world’s second power after the United States?

The truth is that the Soviet Union’s transformation is one of the most remarkable phenomena in world history. For all the bourgeois lying, twisting and slandering to try at all costs to underrate and deny the Soviets’ impressive accomplishments, this transformation – with no historical precedent – highlights the superiority of the nationalised planned economy over capitalist anarchy.

Soviet Space Program Image Flickr Iván AbregoThe Soviets’ impressive accomplishments highlight the superiority of the nationalised planned economy over capitalist anarchy. In the 1950s and 1960s, the US Central Intelligence Agency admitted the Soviets had a definite edge in many fields, including space exploration / Image: Flickr, Iván Abrego

In a couple of decades, the Soviet Union built a powerful industrial base, which paved the way for educational, scientific and cultural progress. No less important were their breakthroughs in healthcare and medical science. World War II revealed the Soviet Union’s massive superiority in the military field. The war in Europe was reduced to a titanic struggle between the USSR and Hitler’s Germany, supported by resources seized from all over Europe. Both the Americans and the British were mere spectators up to the last minute.

After the war, and despite the loss of 27 million of its citizens—half the total number of casualties worldwide—and the destruction of most of its productive forces, so painstakingly created by the Soviet working class, the Soviet Union managed to rebuild its economy in just a few years. In the 1950s and 1960s, the US Central Intelligence Agency admitted the Soviets had a definite edge in many fields, including space exploration.

In the last analysis, the bureaucracy undermined and destroyed the nationalised planned economy. The great Russian Marxist, Leon Trotsky, explained that a nationalised planned economy needs democracy as much as the human body needs oxygen. It goes without saying that Trotsky wasn’t talking about the caricature of democracy that exists in the West, where a small minority of wealthy parasites own the land, the banks and the monopolies. He was talking about the real, Soviet democracy established in Russia after the victory in 1917.

What failed in the Soviet Union was neither socialism nor communism, but a bureaucratic, totalitarian caricature of socialism.

To the enemies of socialism, the collapse of the Soviet Union is the ultimate proof that Marxism failed and socialism is impossible. They spoke about the end of socialism and communism, and even the end of history itself. However, the bourgeoisie’s joy following the fall of the Berlin Wall was rather premature. The events of the last 26 years provide enough hard evidence that history is far from over. Everywhere, we witness the deep crisis of capitalism, characterised by wars, revolutions and counterrevolutions. This is the most unstable period since the end of World War II.

We might add that Francis Fukuyama, the man who coined the notorious phrase about the “end of history,” now says that “socialism” ought to make a comeback!

And Venezuela?

The old B-movies of the 1950s were often horror films about alien monsters from outer space or zombies rising from the dead. But nowadays, these monsters have lost their power to shock and actually seem rather cute. In the same way, through constant repetition, the old stories about Russia have lost a lot of their impact. So, the old scarecrow must be supplemented by a new one. Here we go:

“Even if highly socialist policies are peacefully implemented under the auspices of democracy, the fundamental incentive distortions and information problems created by large state organizations and the centralized control of resources are also present in industrialized countries, as is currently the case in Venezuela. Lessons from poorly performing agricultural economies under socialist regimes carry over to government takeovers of other modern industries: They produce less rather than more.”

It is interesting to note that, when dealing with Venezuela (which it mentions only in passing, without any pretence of a serious analysis) the document tacitly admits that the Bolivarian revolution was in fact “peacefully implemented under the auspices of democracy”. This makes a refreshing change when compared to the constant barrage of propaganda that for 20 years or more persisted in describing Hugo Chavez as a “dictator”.

As a matter of fact, Chavez won more elections and other democratic consultations than any other politician in the world. Nor can it be said that these elections were rigged, since they were scrutinised with microscopic precision by international observers, including former US President Jimmy Carter. Had the observers found even the slightest indication of electoral fraud, it would have been shouted from the rooftops by every newspaper and TV channel in the world. But no such evidence was ever found.

The USA has backed every vicious, blood-soaked dictatorship there ever was in Latin America: from Somoza to Batista and from Pinochet to Noriega. So whatever problem the gentlemen in Washington may have had with Hugo Chavez, you may be absolutely sure that the question of dictatorship or democracy had nothing to do with it.

Anastasio Somoza was well known to be a ruthless dictator, yet the United States continued to support his regime as a non-communist stronghold in Nicaragua. President Franklin D. Roosevelt (FDR) allegedly remarked in 1939 that, “Somoza may be a son of a bitch, but he's our son of a bitch.” The problem with Chavez—the only problem—was that, unlike Somoza, he was not the obedient servant of Washington.

The fact that Chavez was elected by landslide majorities cannot be explained by the authors of the document. They never mention the fact that Chavez used the money from the sale of oil to provide the Venezuelan people for the first time with free healthcare and education. The money was used to build houses, schools and hospitals. And Chavez gave the poor people a voice and a cause. He gave them hope for the future, which they never had before.

No-one can doubt the colossal popularity of Chavez, the reasons for which would be self-evident to any honest observer. In the beginning, he did not speak of socialism, nor did he nationalise anything, limiting himself to social reforms to benefit the people and a new and very democratic constitution. Despite this (or rather, because of it) the Venezuelan oligarchy denounced him as a “communist”. The USA and its agents in Caracas were determined to get rid of him and they organised a violent coup to oust him in April 2002.

That coup was organised with the active participation of the American embassy and the CIA, which has been a common feature of Latin American politics for decades. The coup was supported by the bankers and capitalists (it was headed by the president of the Venezuelan employers’ organisation), with the active participation of generals, police chiefs, the media (which played a key role in mobilising for the coup), and the Roman Catholic Church.

Chavez five years 6 Image chavezcandangaTrying to regulate capitalism instead of abolishing it leads to disaster. That is the real lesson of Venezuela, and of all other attempts to reform capitalism / Image: chavezcandanga

The coup was defeated by a spontaneous movement of the masses, and overthrown in the space of 48 hours. These facts were never explained to the US public, who for decades has been fed a constant stream of lies, distortions and falsifications intended to discredit the Bolivarian Revolution. This was, however, only the tip of a very large and ugly iceberg.

US imperialism saw in the Venezuelan revolution a deadly threat that had to be overthrown at all costs. It took steps to isolate Venezuela internationally and to wreck its economy by vicious sanctions. Together with the falling price of oil, which hit Venezuela’s main industry hard, the economy was seriously damaged. To a very large extent, the crisis we now see in Venezuela was the result of the aggressive policy of US imperialism. Economic sabotage was an important part of the attempt to overthrow a regime that it saw as inimical to its interests.

It is true, however, that the present economic collapse was also due to other factors. The problem of the Venezuelan revolution is not that it went too far in introducing socialist measures, but that it did not go far enough. It stopped short of expropriating key sectors of private industry. The Venezuelan capitalists were allowed to continue their policy (with the active involvement of the USA) of sabotaging the country through a strike of capital that crippled an already weakened economy, hoarding foodstuffs and other basic commodities in order to create shortages and increase inflation.

All history shows that it is impossible to carry out half a revolution. An economy can be run on capitalist lines or on socialist lines. But it cannot be a hybrid in which elements of nationalisation and state regulation co-exist with elements of a market economy. That is a finished recipe for chaos, which is what we now see in Venezuela.

A further factor that undermined the nationalised sectors of the economy was the elimination of workers’ control and the imposition of a bureaucratic regime modelled on Stalinism. This helped to strangle the nascent socialist economy, leading to massive corruption, waste and inefficiency. This is precisely what destroyed the USSR, and is also places the future of the Venezuelan revolution in question.

What all this shows, however, is not the superiority of capitalist market economics over socialist planning, but the need for genuine socialist planning, which must be conducted on democratic lines. It certainly does not provide any justification for reformist half measures. Trying to regulate capitalism instead of abolishing it leads to disaster. That is the real lesson of Venezuela, and of all other attempts to reform capitalism.

Socialism in the USA

Having presented a completely distorted and one-sided picture of the kind of “socialism” that has been introduced in Venezuela, Russia and China, the authors of the document then engage in a weird and wonderful piece of futuristic imagining. What would be the effects of socialist planning if it were introduced in the USA? The authors naturally have a ready-made answer to this intriguing question:

“These countries are examples of a more general pattern of socialism’s negative output effects. Such outcomes have also been observed in cross-country studies of the effect of greater economic freedom—quantified as an index of taxation and public spending, the extent of state-owned enterprises, economic regulation, and other factors—on real gross domestic product (GDP). This literature finds a strong association between greater economic freedom and better economic performance. It suggests that replacing US policies with highly socialist policies, such as Venezuela’s, would reduce real GDP at least 40% in the long run, or about $24,000 per year for the average person.”

So, there we have it! Socialism in the USA would mean a reduction in real GDP of at least 40 percent “in the long run,” and a resulting catastrophic collapse of living standards. We do not know how long “the long run” might be. But what we do know is that living standards in the USA have been falling, or in the best-case scenario stagnating, for the majority of the population for quite some time. As we have already pointed out, many families in the richest country in the world are living on the borderline of poverty, or below it. Many people are homeless. Many more have no health insurance, and are constantly faced with the fear of falling ill.

The authors of the document, like the present incumbent of the White House itself, are blissfully unaware of these facts. For them, to paraphrase the famous sentence from Voltaire’s Candide, everything is for the best in the best of all capitalist worlds. And anyone crazy enough to call this capitalist paradise into question is immediately invited to examine the situation in Venezuela, as a terrible warning of what socialism in the USA would signify.

On the basis of advanced technology, it would be possible to implement socialist planning in the USA on a democratic basis, involving the entire population. Not only the workers, but also the scientists, technicians, economists, managers and other professional people would be involved in drawing up a democratic plan of production, and also supervising its implementation.

The powerful democratic instincts of the American people, and that strong sense of individual rights and freedoms that have been inherited from its revolutionary past also provides a serious guarantee against any attempt to impose bureaucratic or totalitarian rule. On the contrary, from the very beginning, the people would be able to submit everything to a rigorous democratic scrutiny.

Do we want to nationalise everything?

The document states:

“The CEA does not expect that socialist policies would cause food shortages in the United States, because socialists are no longer proposing to nationalize food production. Rather, the historical experience with agriculture is relevant because it involved economic disincentives, central planning, and a state monopoly over a sector that was large when socialism was introduced—similar to healthcare today. The historical evidence suggests that the socialist program for the US would make shortages, or otherwise degrade quality, of whatever product or service is put under a public monopoly. The pace of innovation would slow, and living standards generally would be lower. These are the opportunity costs of socialism from a modern American perspective.”

We are greatly relieved to discover that the introduction of socialism in the United States will not immediately signify a famine of biblical proportions. Thank goodness for small mercies! However, we do not know which American socialists are “no longer proposing to nationalise food production,” since they are not named. Nor does the CEA define what exactly do they mean by “food production.”

If they mean that we do not advocate nationalising the property of small farmers, they are quite correct. But if they mean that we are not going to nationalise the big agricultural firms and the big companies that control things like transportation, chemicals and fertilisers, and above all, the big supermarkets and food monopolies, they are very much mistaken.

In arguing against socialism, the right-wing defenders of market economics frequently attempt to frighten the middle-class, the small farmer, the small shopkeeper, the small businessperson, that “the socialists want to nationalise everything,” they want to bring everything under the suffocating control of the bureaucratic state monopoly, and so on and so forth.

That is completely untrue. What socialists propose is the expropriation of the big banks and monopolies that oppress and exploit the people—not only the working class, but also the middle class and small producers. The banks, for example, rigidly control the supply of credit and charge exorbitant rates of interest and other charges that cripple small businesses. A nationalised banking system would provide a free flow of cheap credit to the small farmer and shopkeeper.

In fact, the proof that big business is profoundly hostile to private initiative and the interests of the small producer is precisely agriculture. The small farmer and his family work hard to produce the milk, butter, meat, fruit and vegetables that people need. But the farmers do not receive a fair return for their hard work. The big supermarket chains pay absurdly low prices for agricultural produce, while charging exorbitant prices to the consumer for the same produce.

But the robbery perpetrated against the small farmer does not stop there. The big transport companies take their cut, as do the big chemical and seed companies that charge high prices for the products they sell. In order to improve the position of the small farmer, it is necessary to eliminate the middleman. By expropriating the big banks and monopolies that suck the blood of small producers, it will be possible both to provide a decent standard of living for the farmers and at the same time lower the price of food for the consumer.

Paris May 1968 pbBy expropriating the big banks and monopolies, it will be possible both to provide a decent standard of living for the farmers and at the same time lower the price of food for the consumer. This was proved in Paris in 1968, where food supplies were arranged, with prices fixed by the workers and peasants / Image: public domain

We can give a concrete example of this by referring to the great general strike that occurred in May 1968 in France. The striking workers established contact with the peasant organisations in the rural areas, and food supplies were arranged, with prices fixed by the workers and peasants. To prevent profiteering, shops had to display a sticker in the window with the words: "This shop is authorised to open. Its prices are under permanent supervision by the unions." The sticker was signed by the unions. As a result, a litre of milk was sold for 50 centimes compared to the normal 80. A kilo of potatoes was cut from 70 centimes to 12; a kilo of carrots from 80 to 50, and so on.

By cutting out the middleman, everybody gains—except the fat cats on Wall Street. But their sorrows do not particularly concern us, or anybody else, for that matter. The fact of the matter is that the small producers are already oppressed and exploited by monopolies. The only difference is that, under capitalism, these monopolies are in private hands and only exist for the purpose of squeezing profits from the labour of the working class and the small producers. By substituting state monopoly for private monopoly, the profit motive is eliminated, and the producer and the consumer both gain a tremendous amount.

Socialists have no interest whatsoever in nationalising small businesses. Actually, small businesses can operate in certain sectors of the economy quite efficiently, for example, the small corner shop or bar. There would be absolutely no point in nationalising them. We need to nationalise the big monopolies and banks because, in so doing, we obtain control of the main levers of economic life—the commanding heights of the economy—as they have been called.

Once we have control of the banks and big monopolies, will be able to plan the economy in the interests of society at large. The fundamental difference is that whereas under capitalism the private monopolies only represent the interests of a tiny privileged minority, under socialism the state and the nationalised industries will be owned and controlled by the working class who constitute the overwhelming majority of society.

This is the difference between the caricature of democracy that now exists, where no matter who sits in the White House, it is always the 1 percent of super-rich parasites who decide what happens, and a genuine socialist democracy, which hands both economic and political power to the majority of people who really create the wealth of society.

It may be that, in the long run, small shopkeepers and farmers will decide that they are better off working in publicly owned enterprises, where they will undoubtedly work fewer hours with better conditions. But that decision must be taken voluntarily by them. In the meantime, the small farmer will be free to work the land as before, but will be sure of an infinitely better deal than was the case when he was enslaved to the big banks and monopolies.

The capitalist state

Just as in the field of economics, the idea that all consumers are equal and “free to choose” is a meaningless abstraction, so in the field of politics, the idea that, in a formal capitalist democracy, people can actually decide who rules their lives and destinies is an equally hollow abstraction. Politicians and presidents are bought and sold, just like any other commodity in the market economy. And this oligarchic control cancels out democracy, which is reduced to the level of an empty and meaningless farce.

In order to break the power of the oligarchy and place real control in the hands of the people, it is absolutely necessary to break the economic power of the ruling class. The prior condition for socialism is the expropriation of big capital—the big banks and corporations that really rule society. In order to control the economy, it is necessary to take these commanding heights out of private ownership altogether.

That is the only way to destroy the dictatorship of capital and create an economic system that is owned and controlled by the majority, not a privileged minority of obscenely rich families. Yet this extremely democratic and necessary measure is painted in the most sinister terms as somehow surrendering the rights and freedoms of ordinary citizens to some kind of monster totalitarian state.

This stands the truth on its head completely. It is the present system that is profoundly undemocratic. It is the rule of an irresponsible, un-elected and unaccountable minority that exercises a despotic and asphyxiating control over the lives of the people. Under the present system, it matters little who is elected to Congress and the White House, because Wall Street extends its tentacles into every level of political life.

The federal bureaucracy is a monster. It consists of roughly 2.6 million employees, plus many freelance contractors. Most of the bureaucracy is engaged in implementing the law. There are 17,985 police agencies in the United States, which includes college campus police, sheriff departments, local police and federal agencies. The repressive nature of the state is increasingly obvious, with numerous cases of police murdering people—more often than not, blacks and Latinos. And the prison population is exploding.

According to the US Bureau of Justice Statistics (BJS), 2,220,300 adults were incarcerated in US federal and state prisons and county jails in 2013. In October 2013, the incarceration rate of the United States of America was the highest in the world, at 716 per 100,000 of the national population. While the United States represents about 4.4 percent of the world's population, it houses around 22 percent of the world’s prisoners. The average cost of incarceration for federal inmates in 2015 was $31,977.65 per person ($87.61 per day).

This huge apparatus of repression is necessary because a tiny minority of exploiters rules over the overwhelming majority. It constitutes an enormous drain on the wealth and resources of society. The cost of maintaining this bloated army of federal bureaucrats was around $58 billion a year in 2015. That was about 14 percent of total government spending and around 16 percent of its revenues.

The true cost of militarism

Military expenditure is yet another colossal drain. Donald Trump has signed what his administration calls the largest military budget in US history: $717 billion, no less. Everything he says suggests he means to increase that figure in future. In fact, American taxpayers will send approximately $6 trillion to the Pentagon over the next decade, as military costs are projected to hit levels 20 percent higher than their Cold War peak, according to the Congressional Budget Office.

Nor does the matter end there. Constant involvement of the USA in foreign military adventures is a never-ending drain that puts a severe strain on the resources even of the world’s richest nation. And these figures do not include the cost of so-called “overseas contingency operations.” That is military slang for the billions of dollars spent off-budget every year on the never-ending “War on Terror”.

The US embarked on the so-called global war on terror following the 9/11 attacks that killed nearly 3,000 and were orchestrated by the Islamist militant group, Al Qaeda. Weeks later, the US led an invasion of Afghanistan, which at the time was controlled by Al Qaeda-ally, the Taliban.

9 11 Image Flickr Cyril AttiasIn the attacks on the Twin Towers, out of the 19 hijackers, 15 were Saudi citizens. Yet it was not Saudi Arabia that was invaded, but Iraq. What followed was an expensive orgy of bloodshed / Image: Flickr, Cyril Attias

In March 2003, Washington overthrew Iraqi President Saddam Hussein, accusing him of developing weapons of mass destruction and harbouring US-designated terrorist organisations. Both claims were false. Despite oft-repeated claims that the US possessed “irrefutable evidence” that Iraq possessed “weapons of mass destruction”, no such weapons were ever found. It was a blatant lie designed to deceive the US public and justify the invasion and occupation of a sovereign state.

The claim that Iraq was harbouring jihadi terrorist organisations such as Al Qaeda, and was somehow linked to the attack on the Twin Towers was another lie. It is conveniently forgotten that, in the attacks on the Twin Towers, out of the 19 terrorists who hijacked the planes, 15 were Saudi citizens. There was not a single Iraqi among them, and in fact, Saddam Hussein was a bitter enemy of Al Qaeda, which had no base in Iraq. Yet it was not Saudi Arabia that was invaded, but Iraq.

Whatever may be said about Saddam Hussein, he was a secular ruler and implacably hostile to Islamist extremism. He ruthlessly suppressed all opposition—including the jihadi kind. Only after the US invasion had destroyed the Iraqi state did Al Qaeda manage to build a strong base (morphing into the “Islamic State”) and, despite setbacks, it still represents a menace today.

Somebody calculated that the “War on Terror” added $2.1 trillion to the huge US debt: around 10 percent of the total. Taxpayers spent more than $800 billion on the Iraq War alone. The $2.1 trillion spent on the War on Terror is said to have created 18 million jobs. But if it had gone toward education instead, it would have created almost 38 million jobs. That gives you an idea of the colossal waste caused by arms expenditure.

However, it now seems that even this eye-watering estimate understates the total amount. The Costs of War Project at Brown University’s Watson Institute recently published an estimate of the taxpayer dollars that have gone into the so-called War on Terror. From 12 September 2001, through to the fiscal year 2018, the bill stood at almost $6 trillion (including the future costs of caring for veterans). On average, that’s at least $23,386 per taxpayer.

This study includes both the Pentagon’s spending and its Overseas Contingency Operations account; and “war-related spending by the Department of State, past and obligated spending for war veterans’ care, interest on the debt incurred to pay for the wars, and the prevention of and response to terrorism by the Department of Homeland Security.”

“The United States has appropriated and is obligated to spend an estimated $5.9 trillion (in current dollars) on the war on terror through Fiscal Year 2019, including direct war and war-related spending and obligations for future spending on post 9/11 war veterans.”

The report concludes:

“In sum, high costs in war and war-related spending pose a national security concern because they are unsustainable. The public would be better served by increased transparency and by the development of a comprehensive strategy to end the wars and deal with other urgent national security priorities.”

In 2014, the US gathered an international coalition to combat ISIS, which has spread from Iraq to neighbouring Syria and beyond. The US-led, NATO Western military alliance intervened in Libya and helped insurgents overthrow Muammar Gaddafi, leaving the nation in a state of unspeakable chaos, anarchy and civil war. Under Gaddafi, Al Qaeda was not a serious force in Libya. Now it thrives there and is spreading its tentacles into Sub-Saharan Africa.

The report also found that the “US military is conducting counterterror activities in 76 countries, or about 39 percent of the world's nations, vastly expanding [its mission] across the globe.” In addition, these operations “have been accompanied by violations of human rights and civil liberties, in the US and abroad.”

The human cost of these foreign adventures has been huge. Overall, the report estimated that “between 480,000 and 507,000 people have been killed in the United States’ post-9/11 wars in Iraq, Afghanistan, and Pakistan.” This toll "does not include the more than 500,000 deaths from the war in Syria, raging since 2011” when a West-backed rebel and jihadi uprising challenged the government, an ally of Russia and Iran.

The number of deaths may be much higher and is also compounded by hundreds of thousands killed by the side effects of such conflicts. The Watson Institute also calculated that the combined human cost for the US throughout its actions in Afghanistan, Iraq and Pakistan was 6,951 troops, 21 civilians and 7,820 contractors.

The report states:

“While we often know how many US soldiers die, most other numbers are to a degree uncertain. Indeed, we may never know the total direct death toll in these wars. For example, tens of thousands of civilians may have died in retaking Mosul and other cities from ISIS but their bodies have likely not been recovered.

“In addition, this tally does not include ‘indirect deaths.’ Indirect harm occurs when wars’ destruction leads to long term, ‘indirect,’ consequences for people’s health in war zones, for example because of loss of access to food, water, health facilities, electricity or other infrastructure.”

Saddam Hussein and Muammar Gaddafi were brutal dictators and no friends of the oppressed masses. But can anyone honestly say that Iraq and Libya are safer and more stable since imperialism devastated these countries? And what about Afghanistan? After 17 years (longer than the Vietnam War), the expenditure of trillions of dollars and terrible loss life, the country is a bloody quagmire in which the Taliban threaten 70 percent of the territory.

800px Muammar al Gaddafi 12th AU Summit Image Jesse B. AwaltSaddam Hussein and Muammar Gaddafi were brutal dictators. But are Iraq and Libya safer and more stable since imperialism devastated these countries? / Image: Jesse B. Awalt

Despite the initial quick victories in Iraq and Afghanistan, the US military has been plagued by ongoing insurgencies—and not only in these countries. The invasion of Iraq destabilised the whole region. This forced the USA to expand its “counterterrorism operations” way beyond the Middle East, to Libya, Pakistan, Somalia and Yemen.

These endless military adventures do not make America any safer or stronger. Nor do they make the terrorist threat any weaker. On the contrary, the terrorist mad men grow more numerous by the day. They thrive on the instability caused by US military intervention. The world is now a far more unstable and dangerous place than what it was in 2001. The invasion of Iraq generated a huge wave of resentment and hatred that will have to be paid for by countless more victims in the future—both outside America’s borders and within them.

The Nazi Hermann Göring once said: “Guns before butter! Guns will make us great. Butter will only make us fat.” But America’s colossal arms expenditure, which makes Hitler’s rearmament programme seem Lilliputian by comparison, has done nothing to restore America’s greatness. In a world torn apart by constant wars that are a reflection of the crisis of capitalism, it is dragging the US ever deeper into a bloody quagmire.

In February, President Trump complained that “we have spent $7 trillion in the Middle East,” adding “what a mistake”. Weeks later, he reportedly told his military advisers to prepare a plan to withdraw from Syria, as the war against ISIS entered its final phase. But since then, the US military intervention in Syria has been continued and even stepped up, dragging out a senseless conflict that has already cost too many lives.

All this reminds one of the famous words of the Roman historian Tacitus:

“And when they have created a wilderness, they call it Peace.”

The workers must take power!

Socialism is democratic or it is nothing. It means taking control of society out of the hands of a greedy, irresponsible and corrupt elite and placing it in the hands of the overwhelming majority. This means the overthrow of the existing state and its replacement with a new kind of state. Engels describes the state as “a power, seemingly standing above society […] but placing itself above it, and increasingly alienating itself from it.”

These words are an accurate description of the present situation. The Pentagon, the Department of Homeland Security, the US nuclear and arms industry, and the rest of what used to be called the Military-Industrial Complex has become a state within a state, with its own interests, enjoying colossal power and leverage over the central government. Trump has found out to his cost that the intelligence agencies that are supposed to be the servants of the people, in reality serve nobody but themselves and the capitalist establishment whose interests they represent.

The defenders of capitalism used to point to Russia and China and say to the citizens of the USA: “you want socialism? That is socialism for you! The gulag, the KGB, dictatorship, spies on every street corner, standing in line for hours for a loaf of bread or a bar of soap. Do you really want that?” And the terrified citizen would shake his or her head and say: “No, thanks! That’s not for me!”

Of course, no one in their right mind wants the things described above. But these things are not at all necessary byproducts of a socialist plan of production. They are precisely the products of economically backward countries where the material conditions for socialism were absent. And that is very different from the situation in the USA.

Whereas in Russia and China, the productive forces were at a very low level when their revolutions took place (and that was also the case of Venezuela, with the partial exception of the oil industry) in the USA, the productive forces have been raised to a very high level. The American population enjoys a high level of literacy and a strong tradition of democracy—all of which was absent in the above-mentioned countries.

We stand for the control of the banks and industries by the state, but we also stand for the democratic control of the state by the whole people. Under a regime of workers’ control and management, all the levers of economic power would be in the hands of the workers themselves. The people who really produce all the wealth of society must own and control the productive forces.

In the first place, this means transferring the wealth of society and the productive forces from private hands to the hands of the state. But the future proletarian state will have nothing whatsoever in common with the present bureaucratic monster that is the state power of the bankers and capitalists. The socialist revolution will do away with the old state of the exploiters and oppressors and create a new, genuinely democratic state power, which will be smaller, more accountable, and infinitely more economical to run.

What will a workers’ state look like? Just over a century ago, Lenin answered that question in a famous work entitled State and Revolution, in which he explained the fundamental conditions, not for socialism or communism, but for the very first days of workers power. These conditions may be summarised as follows:

  1. Free and democratic elections, with right of recall of all officials.
  2. No official to receive a higher wage than a skilled worker.
  3. No standing army or police, but the armed people (a popular militia).
  4. Gradually, all the tasks of administering the state of society to be performed in turn by the whole people. When everyone is a bureaucrat, nobody is a bureaucrat.

Measures such as these will ensure that the American workers’ state would be genuinely democratic and representative. It would be the true realisation of the democratic aspirations that have inspired the American people ever since the American Revolution and the Civil War, which was really a second American Revolution.

This is the real face of socialist revolution. It has nothing whatsoever in common with the bureaucratic totalitarian state of Stalinism. On the contrary, it is a democratic conception of society that is fully in line with the basic revolutionary-democratic traditions of the country—traditions that have been systematically whittled away and reduced to nothing under the present system of capitalist oligarchy.

The transition to socialism

The White House document states:

“The proposed solutions include single-payer systems, high tax rates (‘from each according to his ability’), and public policies that hand out much of the Nation’s goods and services ‘free’ of charge (‘to each according to his needs’). Where they differ is that contemporary democratic socialists denounce state brutality and would allow individuals to privately own the means of production in many industries.”

Karl Marx Image public domainIt is impossible to jump from capitalism to communism. There must be a transitional period, which Marx described as the lower phase of communism. The length depends of the level of the productive forces / Image: public domain

Here we have confusion piled upon confusion. The authors have some vague recollection that socialism is something to do with “from each according to his ability, to each according to his needs.” But to begin with, this formula has nothing whatsoever to do with taxation. As a matter of fact, this formulation was used by Marx to describe the situation that would exist in a completely classless society. In such a society, on the basis of a very high development of the productive forces, with the consequent increase in wealth and culture, we would arrive at a situation where each individual would contribute to society to the degree that his or her physical and mental potential permitted. In return, he or she would receive all that is required to live a fruitful, genuinely human life.

Marx was no utopian. He was well aware that not everybody has the same potential. Not everyone is a potential Darwin, Einstein or Rembrandt. Nevertheless, every human being has some potential and should have the possibility to develop that potential to the full. Every man and woman should be able to contribute to society to the best of their ability. In return, they can expect to receive the right to live a civilised existence.

During the transitional period, as Marx explained very clearly in The Critique of the Gotha Program, there could be no question of immediately introducing the principle of “from each according to his ability, to each according to his needs.” This is what he writes:

“But one man is superior to another physically, or mentally, and supplies more labour in the same time, or can labour for a longer time; and labour, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labour. It recognises no class differences, because everyone is only a worker like everyone else; but it tacitly recognises unequal individual endowment, and thus productive capacity, as a natural privilege. It is, therefore, a right of inequality, in its content, like every right. Right, by its very nature, can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable only by an equal standard insofar as they are brought under an equal point of view, are taken from one definite side only—for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labour, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal.

“But these defects are inevitable in the first phase of communist society as it is when it has just emerged after prolonged birth pangs from capitalist society. Right can never be higher than the economic structure of society and its cultural development conditioned thereby.

“In a higher phase of communist society, after the enslaving subordination of the individual to the division of labour, and therewith also the antithesis between mental and physical labour, has vanished; after labour has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!” (Marx-Engels Selected Works, 1970, vol.3, pp. 18-19)

It is impossible to jump straight from the capitalist jungle into the higher form of socialism without a transitional period, which Marx described as the lower phase of communism. During this period, inequality of income would exist, although the differential would be far less than the obscene inequality that exists today, and will tend to be reduced still further as unskilled and unqualified labour becomes a thing of the past.

The length of this transitional period would be determined by the initial level of development of the productive forces, technique, culture etc. in a given society. In Russia in 1917, the Bolsheviks took power in an extremely backward country, with a narrow industrial base and a largely illiterate population. Therefore, in Russia, the transitional period assumed a particularly difficult and painful character.

Lenin and Trotsky understood very well that the material conditions for building socialism were absent in Russia, and that it would require the victory of the socialist revolution in one or more advanced countries (Germany, for example) in order to advance in the direction of genuine socialism. The problems faced by the young Soviet Republic were the products of extreme economic and cultural backwardness. It was these objective conditions that led to the bureaucratic degeneration of the Russian Revolution, which ended in the abomination of Stalinist totalitarianism.

But in an advanced capitalist country like the United States, with its colossal productive potential, its educated population, and its democratic traditions, the advance towards socialism would be achieved far more easily, far less painfully and far more swiftly than was the case in backward Russia.

The superiority of a socialist planned economy

What effect would the nationalisation of the banks and monopolies have on production? Our friends in the White House speak of a collapse of maybe 40 percent “in the long run.” This is once more a figure somebody has sucked out of their thumb. Nowhere do they produce the slightest proof to back it up. But we believe we are in a position to demonstrate the precise opposite. Let us refer once more to a concrete example of what a planned economy could achieve.

Under frightful conditions of economic, social and cultural backwardness, the Bolsheviks began the titanic task of dragging Russia out of backwardness on the basis of a nationalised planned economy. Within the space of two decades Russia had established a powerful industrial base, developed industry, science and technology and abolished illiteracy. In a period of 50 years, the USSR increased its gross domestic product nine times over.

By the late 1970s, the Soviet Union was a formidable industrial power, which in absolute terms had already overtaken the rest of the world in a whole series of key sectors. The USSR was the world’s second-biggest industrial producer after the USA and was the biggest producer of oil, steel, cement, tractors and many machine tools.

Nor is the full extent of the achievement expressed in these figures. Moreover, unemployment like that in the West was unknown in the Soviet Union. The USSR had a balanced budget and even generated a small surplus every year. Not a single Western government has succeeded in achieving results like these. The federal budget deficit of the USA was $665 billion in the financial year 2017, versus $587 billion in 2016, an increase of $82 billion, or about 13 percent. Right now, US public debt is about $20 trillion, having increased by an astonishing 115 percent over the last decade.

Moreover, for most of the postwar period, there was little or no inflation in the USSR. This was particularly the case with the price of basic items of consumption. In the early 1980s, the price of bread, sugar and most food prices had not been increased since 1955. Rents were extremely low, almost free in fact, and included unlimited free electricity and gas. Just compare this to the West, where most workers have to pay a third or more of their wages on housing, and the high cost of housing puts home ownership beyond the reach of millions and condemns millions more to homelessness.

In the 1980s, the USSR had more scientists than the USA, Japan, Britain and Germany combined. Only recently was the West compelled to admit grudgingly that the Soviet space programme was far in advance of America’s. The Western critics of the Soviet Union kept very quiet about this, because it demonstrated the possibilities of even a transitional economy, never mind full-blown socialism.

Now, if these results were possible on the basis of an extremely backward, semi-feudal economy with an illiterate population, it does not take a genius to understand that far greater results would be achieved by the application of democratic socialist planning to an advanced, industrialised economy like that of the USA. All the vast, unused productive potential of this mighty land would be mobilised for the satisfaction of human needs. Every able-bodied man and woman would be invited to participate in the socialist reconstruction of America. A crash programme of house building would eliminate the scourge of homelessness and rebuild the country’s crumbling infrastructure.

Freed from the control of the parasitic oligarchy of bankers and capitalists, on the basis of democratic workers’ control and management, the American economy would advance by leaps and bounds. Under a democratic socialist plan of production, an annual rate of growth of 10 percent would be quite a modest objective. This would mean the doubling of America’s collective wealth in the space of two five-year plans. Far from collapsing, living standards would be raised to a level never seen before in history. The hours of work could be drastically reduced, giving people time to develop themselves mentally, physically and spiritually.

Far from being an impossible utopia, we already have in our hands the productive potential, based on modern science and technology, to guarantee a future based upon a level of prosperity that can satisfy all human needs, without the necessity of an animal struggle for existence. Is this really an aim that is beyond the capacity of the human race to attain? Only an ignorant and narrow-minded misanthrope would dare to say so.

Once the powerful American economy is freed from the stranglehold of the private banks and monopolies, it would be possible to reorganise the productive forces in a harmonious and planned manner, which would guarantee every man, woman and child a far higher living standard than what they have at present.

White House protest Image Ted EytanOnce the American economy is freed from the stranglehold of the banks and monopolies, it would be possible to reorganise the productive forces in a harmonious and planned manner, which would guarantee every man, woman and child a far higher living standard / Image: Ted Eytan

The democratic participation of the working class, which is the prior condition for the building of socialism, would be a very simple matter, given the fact that the US possesses an educated population. The general application of modern technology—computers, calculators, smartphones and other wonders of modern science—would render the tasks of accounting and control accessible to everybody, providing a solid basis for the introduction of workers’ control and management at all levels of industry and the economy.

Freed from the need to fight for a bare living, the people would be free to pursue their interests and to develop their potential to the maximum. The schools and universities would be open for every citizen that wished to improve their knowledge of science, culture and the arts. Access to learning and culture would be provided free by the state, laying the basis for a new Renaissance of art, painting, music, literature and architecture. That would be a giant first step in the achievement of the final goal: a socialist federation of the entire world.

However, such a world will be possible only after humanity rids itself of the parasitic yoke of capitalism. And this is precisely why the gentlemen of the Council of Economic Advisors are so keen to warn the American people against such a perspective.