Capitalism Vs Socialism is Gibberish

One of the Republican Party’s main strategies for 2020 is to campaign against “socialism” and for “capitalism.”  The reality in 2020 is that neither of those words has any semantic meaning.  They’ve become expletives to be hurled at enemies and gang colors to rally trolls.  The entire conceptual framework behind those words has become hopelessly encrusted with bad history, rhetorical abuse and the gradual decay of a set of imperfect ideas over the course of centuries.  Whatever useful relevance those terms had in the 18th and 19th centuries eroded steadily as the 20th century blurred the lines, winnowed out proven failures and blended mixtures of public and private sectors all over the world. In fact, the assumption that there’s a clear and stark distinction between public and private requires one to ignore the impossibly intertwined fabric of how our actual social governance functions.  The real world isn’t black and white, it’s all shades of grey.

 

Journalists now regularly ask politicians whether they’re capitalists or socialists a question that is utter gibberish.  No two people share the same definition of the words and for many people the words change meaning from one context or conversation to the next.  It’s becoming the topic of the day which unfortunately creates a useless framing designed by trolls to minimize our ability to have a constructive discussion about the nature of our society and what we want it to become.

 

And, that’s the real topic on the table.  What do we want to become in the 21st century?  Over the course of our history we’ve had four very distinct socioeconomic paradigms.  The first held sway from our founding to the end of the Civil War.  We were primarily an agrarian society with two models – family farms organized around small communities and plantations worked by slaves.  The abolition of slavery and the growth of industrial production fueled by the labors of immigrants arriving from Europe led to the second paradigm.  It was an era dominated by ruthless monopolies backed by government forces.  Efforts to improve working conditions or wages were met with military operations that often killed those who expected to be able to feed a family on the wages of a 60-70 hour work week.  That paradigm lasted until it collapsed in the early 1930s.  The New Deal redesigned the economy using government resources and laws to create a more sustainable economic growth environment.  That economic paradigm lasted until the early to mid 1970s when it was replaced with a paradigm that grew out of the Austrian School of economics and became known as neoliberalism.  The neoliberal paradigm has prevailed to this day and has dominated the beliefs and policies of both parties.

 

I defy anyone to use the words “socialism” or “capitalism” in a way that usefully describes the similarities and differences across those four paradigms.  They were enormously different and produced dramatically different economic patterns.  But, those words serve to obscure the important realities of those periods rather than elucidate them.

 

The real issue of the day is that essentially every material aspect of the neoliberal paradigm has proven false, socially harmful, or economically destructive.  Its days are coming to an end and the question is what will replace it.  That’s the real topic for 2020 – what’s our next socioeconomic paradigm?

 

It’s worth observing that all our prior transitions were born amidst crises.  The first paradigm was born from the revolution that founded our nation.  One can argue whether Madison, Hamilton or Jefferson is most associated with the establishment of our original framework, but government leadership was its very essence.  The second grew out of the Civil War and it was largely the leadership of Lincoln that set us on our new path.  The third arose from the Great Depression and WWII through the leadership of Franklin Delano Roosevelt.  The fourth was born out of Vietnam, Watergate and our failures to deal with oil shocks and stagflation.  The leader who cemented the fourth paradigm was unquestionably Ronald Reagan.  It’s no coincidence that the leaders who were able to shift the country from a failing paradigm to a new one are among our most revered.  Change on that scale isn’t easy.

 

One of the favorite phrases of consultants who help CEO’s implement large scale change is “a crisis is a terrible thing to waste.”  When Obama took office, he was confronted immediately with an economic collapse that brought with it the peril of another Great Depression.  In an odd way it was a gift.  It was the perfect crisis to use to put us on a path out of the failing neoliberal paradigm and into whatever name historians will eventually use for our fifth paradigm.

 

Obama avoided another Great Depression but completely failed the leadership challenge of putting us on that new path.  He was a believer in neoliberalism and was effectively blind to its many profound failings.  That set the stage for Trump who capitalized on the widespread resentment that inevitably spreads as a socioeconomic paradigm breaks down for most citizens.  Trump’s failure to see the real problems, let alone offer leadership out of the crisis, is far deeper and more cynical than Obama’s.  In fact, Trump seems to be doing everything in his power to make the situation far, far worse.

 

The crises of 2020 may not be as clear cut as the financial collapse Obama was handed, but if anything, it is far more pervasively felt.  What’s needed is the leadership to help everyone understand the real sources of our problems and then to begin guiding a process to redefine how our economy works.  That won’t come from “unifying” different factions, most of whom are hopelessly lost, and it certainly won’t come from babbling on about archaic 19th century “isms.”

 

This needs to be the real criteria for our next President.  Not whether he or she can “beat Trump,” but whether they have the vision, conviction and leadership skills to systematically address the failures of the neoliberal paradigm.  There are important lessons we can learn from the redesign of the economy in the 1930s, but we can’t simply go back to the same solutions.  The 21st century is a very, very different beast.  Today’s technology, socioeconomics, industry maturity and global context are all radically different and will need solutions relevant to the 21st century not the early to mid 20th century.  This is both our challenge, and, I believe, our enormous opportunity – to reshape our socioeconomic paradigm so our entire nation can thrive in the future not wallow in the past nor cringe in fear.  Anybody up for the task?