The candidacy of Bernie Sanders in 2016 and the election of Alexandria Ocasio-Cortez in 2018 have demonstrated that Americans are reconsidering Socialism carefully, and that Socialist candidates can get elected. The problem for Americans is that Socialism is an ambiguous term. It can mean political economies ranging from Denmark and Sweden to the USSR and Venezuela. The first two are called “Democratic Socialist” and the latter two are called “Totalitarian Socialist,” at least by American political scholars. But the confusion remains because many totalitarian countries actually put the word “Democratic” in their names, including the former East Germany and the present North Korea.
I propose a new term, to identify a specific type of Socialism that the United States needs: Answerable Socialism.
Why “Answerable” instead of “Democratic”?
I am certainly in favor of democratic government. Regular elections usually hold political leaders answerable to the people they govern. However, populist leaders can abuse supposedly democratic processes and act with impunity. Abuse can happen through forcing certain candidates out (such as Bernie Sanders in 2016), or through purchase of the election through massive campaign-funding, through distortions of facts, and through appealing to fears rather than aspirations of the voters. So democracy alone is insufficient to maintain answerability of leaders. It is a mistake to assume that periodic elections automatically equal rule-by-the-people. Democracy is a means towards that goal, but not the goal itself.
What other practices and institutions keep leaders answerable to the people? An uncensored, independent press, and taxation. The role of a free press in maintaining answerability was clearly articulated at the time of the American Revolution. However the link between taxation and political answerability only became apparent when some countries found that they could abolish taxes and fund their governments through revenue from resources such as oil or diamond exports. This phenomenon is now called the “Resource Curse” because countries that rely on resource-exports for revenue have a strong tendency to treat their own people badly. The reason can be summed up in a simple maxim: “If the people do not fund the government, the rulers will come to believe that they owe the people nothing.”
Conversely, paying high taxes is a constant irritant. I will not pretend that anyone actually likes doing that. But it is a mistake to think that the only solution is to therefore cut taxes and seek other sources of government revenue (like export-revenues, or borrowing from the future and going into deep debt). Instead, promote an understanding of how the irritation of taxation is a prod towards answerability. It seems that people feel much more strongly about having the government explain what it is doing with their money, compared to what the government is doing with their occasional vote. With the adoption of the Internet in the 1990s, governments now have an efficient, inexpensive means to explain how they are investing tax revenue. An independent press can cross-check whether rulers are being honest with those explanations.
A Competitive-Market Socialist system
Answerability is a call to set up and maintain political mechanisms that will hold leaders answerable even more than technical democracy by itself. This is the opposite of totalitarianism, and tyranny by a thug-like populist leader who plays on fears and phobias rather than hopes and aspirations. However, Americans also question whether Socialism means abolishing a market economy and the financial incentives for productivity and innovation.
Actually, a Socialist political economy is more suitable for maintaining a competitive market economy. Why? Because a de-regulated “free” market slides very quickly into an economy controlled by cartels and oligopolies, if not outright monopolies. As Adam Smith argued, such economies are market failures. Smith argued that the role of regulation is to maintain competitiveness.
In practice, there are actually only two types of market: a competitive market (maintained by regulations and enforcement) and a dominated weak market. There are a few ways a market can become weakened by domination: excessive government interference (such as in the USSR under Brezhnev and China under Mao) or by private oligarchies. De-regulation leads to private domination of the market, so a supposed “free” market is actually a path to market failure. Either type of dominated market stifles innovation, and stifles new competitors from coming in and keeping prices low and quality high.
Why not just call it Capitalist, then?
A Competitive-Market Socialist system certainly allows for inequality, but it balances inequality against the need to maintain the welfare of the whole population. The United States (and all wealthy countries) implemented many socialist programs decades ago, such as universal primary and secondary education, publicly-funded civil courts, public health agencies, and municipal infrastructure. Using tax revenue for human investment in both education and health are the most effective ways that governments can promote both well-being and competitive economies. A capitalist system alone does not do this. Technically, Somalia and the Democratic Republic of the Congo are capitalist, and almost completely de-regulated because their governments are mostly collapsed. “Pure” capitalism where there is no government regulation and no enforcement is clearly disastrous. However, a well-taxed and well-regulated capitalist economy is productive. In other words, Socialism and Capitalism are not mutually exclusive. The most effective Socialist political systems are those which regulate and promote Capitalist wealth.
Not against Capitalism, but thinking beyond Capitalism
In the 19th century, Socialist thinkers assumed that the central problem was to manage social inequality to prevent popular revolt against the elite. In the 21st century, that problem persists but a completely new problem has emerged: the question of ecological sustainability. As Naomi Klein and others have argued, Capitalist political economies are running up against a fundamental system design flaw. Capitalism requires economic growth in order to remain viable. However human population growth is declining in wealthy countries, and we are destabilizing many ecosystems through the scale of our collective economic activities.
The problem of sustainability provokes a very different question: How do we enable all humans to live well without exhausting natural resources and destabilizing the climate? Whatever answer we find to this question, it will force a fundamental design-change in the market system. The difference between mercantilism and capitalism was that Mercantilists believed that the “resource pie” was essentially land, and that it was a fixed quantity. With the invention of intellectual property, Capitalism assumes that the “wealth pie” can be grown without limit. This assumption has worked extremely well for 200 years, resulting in massive growth of wealth and human population. Inequality, discrimination, and injustices have tainted that success, and the way to address those problems seems clear: make governments more answerable.
However we are back up against the limit of natural resources again, in a more complex way. We need to adjust the market system to address this limit. So this is not a 19th-century argument for a revolutionary overthrow of Capitalism, nor an argument against markets, nor an argument against living well. Rather, it is an observation that we need to shift our attention towards revising the design of our market system to address three core goals: to achieve and maintain a good quality life for all people; to balance inequality with justice; and to coexist well with all the life and processes of the earth. I see no clear answer about how redesign markets to achieve these goals; it is a very complex problem which might require very refined solutions. However, the process for getting to that answer is clear: we need a political system that responds to the people, invests heavily in their education, and rests its credibility on the argument that its purpose is to maintain their long-term well-being.