Capitalism or Socialism

Socialism or Capitalism                          Gerry OShea

When John Healy, the great journalist of a past era from County Mayo, was  faced with a conundrum that wasn't open to any easy explanation he would challenge his readers by asking "Riddle me that!" I thought of Mr. Healy recently as I tried to understand the policy differences  between two of the prominent candidates for the Democratic nomination for president, Senator Bernie Sanders and Senator Elizabeth Warren.

Senator Warren defines herself as a capitalist "to my bones."  She says that her goal is to radically reform the economic system and make it work for ordinary people.

However, Senator Sanders always presents himself as a socialist and points to his commitment to that philosophy as setting him apart from his opponent on the left from Massachusetts.

A perusal of the positions of both candidates on the major issues is revealing.

Healthcare   Both Sanders and Warren strongly support a public healthcare system that covers all citizens and legal residents. They decry the current approach where private companies charge high premiums while leaving about 27 million outside of the coverage loop and an additional 60 million struggling to pay medical bills. They both propose to ease out all private company coverage in favor of providing  medicare-for-all, paid for from the public purse.

Most of the other Democratic candidates, led on this issue by Vice-President Biden, propose extending the Affordable Care Act(ACA), better known as Obamacare, to offer a Public Option which would give people a choice between continuing in their current private policies or changing to an expanded ACA.

Critics of the Sanders/Warren approach point to two major problems with their medicare-for-all proposal. First, they query the cost and look for details on how it will be paid for, and, more crucially, they question whether millions of voters who are happy with their present private policy will agree to part with it for an unproven public  plan. Polls indicate that people have no problem with an expanded ACA, but Sanders and especially Warren supporters are struggling  to explain why people should be mandated to give up a healthcare policy which they like.

Income Inequality  The top 1% of Americans own more wealth than the bottom 95%. Dealing with this vast inequality has become a pivotal issue for many voters, a litmus test for workers and  especially for people who identify with the progressive wing of the Democratic party. The last half century has seen huge growth in company profits, mainly due to the impact of new technologies, but in most cases these extra millions have gone to the top bosses and shareholders. Millionaires and billionaires have multiplied in America while shop floor workers have barely held their own.

Warren is pushing the Accountable Capitalism Act which would mandate that 40% of members on the board of a corporation would be chosen by the workers. This coherent proposal would surely end the board meetings where profits are divvied up in favor of the top executives  and their cronies with little left for the workers who are mostly responsible for creating the positive results.

A similar law in Germany goes by the name of "codetermination" and it works well in balancing all the interests - including workers' - when company profits are distributed.

Her taxation policies are very progressive - a 15% social security levy on those earning over $250,000, a 2% annual wealth tax on people with assets over $50m, a 7% extra levy on corporate profits and so on. No doubt about who she thinks should be paying far more of the bills.

Bernie Sanders'  economic policies also call out the rich and big corporations. He proposes a law that would penalize companies where workers' median salaries are highly-disproportionate compared to the payments to top executives. He advocates for a minimum wage of $15 an hour, a proposal that is also high on the Warren agenda.

Overall, the two candidates' economic policies mesh well together. Either one would have no problem voting for a policy position of the other.

Third-Level Education  In the vital area of Third-Level education, they both strongly favor tuition-free public colleges and Sanders proposes an outlay of 1.3 trillion dollars to pay off student loans which are so crippling for many young people. The only minor difference on this issue centers on Senator Warren limiting the benefit to families with incomes under $250,000.

Global Warming    Probably the most immediate issue facing the electorate with President Trump denying that there is even a problem. Both candidates have pledged to replace the current policies of denial with wide-ranging and costly programs to deal with what they correctly see as a cascading environmental crisis.

Back to my riddle: Where are the policy differences between the avowed capitalist and the proud socialist?

Perhaps they don't exist and both should be seen as social democrats. The Social Democracy(SD) label is frequently used by political parties in Western Europe. It represents an ideology that favors  active  state intervention promoting policies that openly stress social justice. One could view it as capitalism with a conscience.

Countries like Sweden, Norway, Canada and Belgium, all firmly capitalist countries, often follow policies that are designed to reduce poverty in all its manifestations by marshalling planning and taxation laws to help people at the middle and bottom of the socio-economic spectrum. For instance, social democrats  always insist on a public healthcare system that covers all citizens, and, under their leadership, parents can avail of generous family leave arrangements and early education programs. High-quality care for the aging population is also stressed.

In an SD country taxes are high, but the majority of the people accept the social contract because it benefits citizens from cradle to grave and thus is deemed worthwhile.

Unfortunately,  up to now, America has no history of social democracy, although FDR's New Deal and Lyndon Johnson's War on Poverty could be seen as coming from the same stable. Perhaps credible progressive leaders like Warren and Sanders should drop the old and inadequate labels  in favor of policies that highlight fairness and the need for radical changes that uplift workers and the unemployed. Call it socialism or capitalism - or a sensible mixture of both!