A short guide to Obama and socialism Andrew Koppelman President Obama’s opponents have been so persistent in tagging him with the label “socialist” that it has gotten under his skin. Yesterday it was reported that, after the question of socialism came up in an interview with the New York Times, he called the reporter back to expand on his explanation of why he wasn’t a socialist.



Obama properly belongs in a specific anti-socialist movement on the left, Social Democracy, which accepts a capitalist economy but demands a state strong enough to moderate its failures and excesses. Today there are no Leninists left in American politics, and almost no Democratic Socialists, who hope to use electoral means to abolish capitalism. The principal rivals to Social Democrats today broadly fall into two categories, whom I will broadly denominate Market Fetishists and Sentimental Fools. The following, then, is an anatomy of contemporary politics that will help to understand Obama and his adversaries.



The intellectual history of the left is laid out with great compression and wonderful clarity in this piece by Sheri Berman in the Winter 2009 issue of Dissent. Berman writes:



“The emergence of capitalism in the eighteenth and nineteenth centuries led to unprecedented economic growth and personal freedom, but it also brought dramatic inequality, social dislocation, and atomization. Accordingly, a backlash against the new order soon began. During the early to mid nineteenth century, a motley crew of anarchists, Lassalleans, Proudhonians, Saint Simonians, and others gave voice to the growing discontent. Only with the rise of Marxism, however, did the emerging capitalist system meet an enemy worthy of its revolutionary power. By the late nineteenth century an orthodox version of Marxism had displaced most other critiques of capitalism on the left and established itself as the dominant ideology of the international socialist movement.”



Marx predicted that capitalism would soon collapse from its own internal contradictions. But by the late nineteenth century, capitalist regimes had not only survived a long depression in the 1870s and 1880s, but enacted reforms that made life better for most of the public. The response to this, Berman argues, split the left into three camps.



“The first, best symbolized by Lenin, argued that if the new social order was not going to come about on its own, then it could and should be imposed by force—and promptly set out to spur history along through the politico-military efforts of a revolutionary vanguard. Many other leftists were unwilling to accept the violence and elitism of such a course and chose to stick to a democratic path. Standard narratives of this era often leave the analysis here, focusing on the split between those who embraced and those who rejected violence. In fact, however, an additional split within the democratic camp was crucial as well, centering on the future of capitalism and the left’s proper response to it.”“One democratic faction believed that Marx may have been wrong about the imminence of capitalism’s collapse, but was basically right in arguing that capitalism could not persist indefinitely. Its internal contradictions and human costs, they felt, were so great that it would ultimately give way to something fundamentally different and better—hence the purpose of the left was to hasten this transition. Another faction rejected the view that capitalism was bound to collapse in the foreseeable future and believed that in the meantime it was both possible and desirable to take advantage of its upsides while addressing its downsides. Rather than working to transcend capitalism, therefore, they favored a strategy built on encouraging its immense productive capacities, reaping the benefits, and deploying them for progressive ends.”“The real story of the democratic left over the last century has been the story of the battle between these two factions, which can be thought of as the battle between democratic socialism and Social democracy.”



The issue was joined within the German Social Democratic Party before World War I, when Eduard Bernstein declared: “With regard to reforms, we ask, not whether they will hasten the catastrophe which could bring us to power, but whether they further the development of the working class, whether they contribute to general progress.” Thus Bernstein concluded: “What is usually termed the final goal of socialism is nothing to me, the movement is everything.” This led Rosa Luxembourg to protest that Bernstein wasn’t a socialist at all: either “socialist transformation is, as before, the result of the objective contradictions of the capitalist order . . . and at some stage some form of collapse will occur,” or capitalism itself could be changed into a humane system that could meet the needs of the working classes, in which case “the objective necessity of socialism . . . falls to the ground.”



Berman shows how the Social Democratic faction triumphed after World War II. “Western European states explicitly committed themselves to managing capitalism and protecting society from its more destructive effects. The prewar liberal understanding of the relationship among capitalism, the state, and society was abandoned: no longer was the role of the state simply to ensure that markets could grow and flourish; no longer were economic interests to be given the greatest possible leeway. Instead, after the war the state was generally seen as the guardian of society rather than the economy, and economic imperatives were often forced to take a back seat to social ones.” The New Deal represents a similar settlement.



Berman worries that the left doesn’t fully appreciate what they had accomplished. “Some forgot that the reforms, while important, were merely means to an end—an ongoing process of taming and domesticating the capitalist beast—and so contented themselves with the pedestrian management of the welfare state. Others never made their peace with the loss of a post-capitalist future.”



If we use Berman’s taxonomy, Obama is firmly in the Social Democratic camp, and the label “socialist,” when applied to him, rests on a confusion (willful or otherwise varies, I suspect, with the speaker) about the distinctions on the left just enumerated. Rosa Luxembourg understood almost a century ago why Obama is no socialist. He has no interest at all in dismantling capitalism. He told the Times: “the thing I constantly try to emphasize to people if that coming in, the market was doing fine, nobody would be happier than me to stay out of it. I have more than enough to do without having to worry the financial system. The fact that we’ve had to take these extraordinary measures and intervene is not an indication of my ideological preference, but an indication of the degree to which lax regulation and extravagant risk taking has precipitated a crisis.”



Social Democracy aims to deploy the state for two central purposes. One is to correct capitalism’s operational failures, where capitalism wastes wealth instead of producing it. The current market collapse is an example: many well-functioning businesses that were competently producing goods and services have been destroyed, in a spreading cycle of depression. Obama’s stimulus measures and bank bailouts aim to stop this downward spiral.



The other big aim of Social Democracy – and this is what the accusation of “socialism” is really about - is to ameliorate the market’s distributive consequences by spreading around the wealth that capitalism produces. That was Obama’s big theme in his campaign, before the economic crisis hit, and it is embodied in his tax and health care reforms. The second aim of Social Democracy is more controversial than the first. Bush and McCain were both willing to do whatever was necessary to keep the recession from becoming a depression, but neither had any interest in redistributing wealth.



So the real question isn’t socialism, because Obama isn’t a socialist. The question is Social Democracy. And to see what this question involves, we have to contemplate the alternative – a government that gives the market its head, and does not intervene to ameliorate its systemic or distributive consequences. That minimal government is what is implied by the denunciation of any government intervention as “socialism.”



Who is drawn to this vision of minimal government? In contemporary American politics, its proponents fall into two broad camps. Both claim that absent government intervention, markets will function well. But they have very different accounts of what it means for markets to function well.



One view holds that whatever an unregulated market produces is appropriate. There is no external standard to judge what the market produces. It is itself the standard for distributive justice. Those who take this position understand that an unregulated market will produce booms and busts, and will leave some people impoverished. But they can live with that. It’s a heartless view, and the most one can say by way of excuse is that its proponents are so enchanted with the market’s undoubted virtues that they find it hard to focus on anything else. Call them Market Fetishists.



A good illustration of Market Fetishism is the argument that was typically made on behalf of George W. Bush’s proposed (and ultimately rejected) Social Security “reforms” of 2005. Bush wanted to allow people to invest their Social Security contributions in the stock market. This was touted as making much larger retirement income possible for many Americans by giving them market returns. Proponents laid less emphasis on the fact that those who do not make good investment choices (or who are unlucky enough to retire during a recession) would no longer be able to rely on present levels of Social Security income, and instead would be reduced to absolute destitution.



Not all opponents of Social Democracy are Market Fetishists, though. Some of them care about the same things that Social Democrats care about. They want all Americans to have a decent standard of living. They don’t like children going without health care, or urban schools falling apart, or people starving. But they think that these conditions can be ameliorated without massive government programs.



Medical care is a salient illustration of just how silly this is. Health care for the poor would be far worse than it is without Medicaid, but Medicaid only covers about 40 percent of poor Americans, and there’s no way the rest are going to get decent insurance unless the state somehow intervenes in the market to see that it is provided. (The state already does this, in a spectacularly clumsy and inefficient way, by mandating that emergency rooms service all comers regardless of ability to pay.)



Opponents of expanded health care who aren’t callous enough to qualify as Market Fetishists either try not to think about this or else convince themselves that the market is helping these people as much as they can be helped. Call them Sentimental Fools.



The Republican Party today, at least with respect to economic policy, is a coalition of Market Fetishists and Sentimental Fools. Bush was an incoherent combination of both. (I won’t here discuss the religious right, who tend to be Sentimental Fools on matters of economic policy, to the extent that it concerns them at all.) Even the Republicans can’t resist the draw of Social Democracy altogether. They don’t dare propose the abolition of Social Security or Medicaid, though they would certainly denounce both as “socialism” if they were proposed today. (The Market Fetishists grit their teeth and tolerate these programs out of political necessity; the Sentimental Fools favor them just because they’re familiar and have good consequences.) They even will support Social Democratic measures when they seem likely to get votes, though what they produce will be influenced by a Market Fetishism that is wildly inconsistent with those measures. A notable mongrel is Bush’s prescription drug insurance plan, which was straight Social Democracy, but which as administered, in Market Fetishist fashion, told its beneficiaries to navigate through complex insurance markets with no help from the state. The tension between the worship of the market and the concern about social welfare can sometimes propel the coalition into complete disconnection from reality, as when the Senate Republicans recently converged around the idea that the remedy for the present economic crisis is tax cuts and nothing but tax cuts. Here the hybrid of Market Fetishism and Sentimental Foolishness produces a kind of intellectual olestra: not nourishing, and productive of results that are not pretty.



There is a legitimate place for a conservative party that is suspicious of social programs. Social Democracy has characteristic pathologies of its own: programs become entrenched beyond their usefulness, develop rent-seeking constituents, and so can become a wasteful and counterproductive burden on the economy. So its measures need shrewd and skeptical critics. The hypothesis that this or that area of the economy ought to be returned to market control is always worth considering. Who mourns the abolition of the Civil Aeronautics Board, which artificially raised airfares for years? Who can responsibly support farm subsidies? But these criticisms amount to tinkering with the Social Democrat program rather than abolishing it.



The Market Fetishists dare not allow their views to be fully understood, because the consequences would be so cruel that most of the country would not stand for them. That is why they need the Sentimental Fools to cloak them with a patina of reasonableness. To the extent that the Sentimental Fools shrink from dismantling the regulatory state, the Republican party is as “socialist” as Obama. They are simply haggling about how much regulation is appropriate. To whatever extent Obama is a socialist, we are all socialists now.

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