People over profit: What Socialism is not

By Mike Tudoreanu

In my previous column of this three-part series, I tried to sum up the problems and injustices at the heart of capitalism, and wrote about the socialist alternative and how it differs from capitalism. In this present column, I wish to explain how socialism differs from some of the things commonly labeled as “socialism” in the U.S. Before describing what socialism is, it may be useful to talk about what it isn’t.

Socialism is not the type of society that exists in Sweden, Norway and Denmark, or to a lesser extent in France and Germany. Those countries (particularly the ones in Scandinavia) follow a model called the “social market economy,” and this represents the liberal ideal, not the socialist ideal. When they get called “socialist,” it is due to confusion between liberalism and socialism.

The social market economy is a model where the rich are taxed very heavily and this money is used to provide things like universal health care, free higher education, generous pensions for the elderly and welfare for the unemployed. In other words, it is an economic model that contains a large degree of wealth redistribution. But in all other respects it is still identical to the standard form of capitalism. The economy is still based on markets and profit, and it is still dominated by corporations. The majority of people are still employed by profit-seeking companies, and still do not have control over their workplace or the products of their labor. Decisions about what to produce and where to invest are still made on the basis of profitability and not human need. You can still lose your job to downsizing or outsourcing, or get fired for no fault of your own. The economy still goes through periodic recessions. And the rich still get rich by exploiting the labor of others (higher taxes mitigate this problem to an extent, but they do not fix it).

That is not socialism. That is capitalism with a Band-Aid. It is better than what we currently have in the U.S., but it is also a very vulnerable system. The wealthy are still in control of politics and government, and they are always trying to destroy as many progressive policies as they can get away with. Sweden, for example, has been gradually shrinking its welfare state since the 1980s. Practically all countries in Europe and North America have deregulated their banking systems in recent decades, which yielded disastrous results in the crash of 2008. The rich are always demanding lower taxes, but it is unpopular to cut government services. Thus, politicians are pressured to cut taxes without cutting spending, leading to budget deficits. In short, the social market economy is a very difficult balancing act between the interests of the capitalists and the interests of working people. You can walk that tightrope for a while, but sooner or later you will fall. The progressive dream is only possible as a short-lived compromise.

What about the other thing that sometimes gets called socialism – the kind of economic system that existed in the Soviet Union and Eastern Europe before 1989, and continues in Cuba today? It’s certainly a very different system from what we are used to. There are no private firms or corporations, the economy is not driven by profit-seeking (in fact, profits are officially abolished), all industries and workplaces are owned by the state, there is no unemployment, and, at least officially, people are provided things like free health care, education and pensions. But there is no democracy. The people don’t control the state, they don’t control their workplaces and they don’t control what happens with the products of their labor. The state is supposed to serve them, but, in practice, it can do whatever it wants. With no democratic accountability, there are no consequences for the heads of state companies if they only make low-quality products, or if they don’t make enough. There are no consequences for the government if the services it provides are sub-par. In fact, the government can even decide to return to capitalism, as it has done in China, without asking anyone’s opinion.

That is not socialism, either. The whole purpose of socialism is to have a society where the workers control all the wealth and decide what to do with it. Obviously, this doesn’t happen when the economy and society is controlled by a government which doesn’t have to answer to anyone. The main reason why socialists oppose capitalism is because capitalism puts power and wealth in the hands of a small ruling class who did nothing to earn it. The last thing we want is to do the exact same thing, but with a different ruling class. It is true that countries like the Soviet Union had important things in common with socialism — for example the fact that their economy was planned, not market-based — but they missed the most important aspect of socialism: workers’ control. Just like a dolphin is not a fish, an undemocratic planned economy is not socialism.

Other things have been called “socialism” as well. In many parts of the world, “socialism” is a buzzword with very positive — similar to the word “freedom” in the U.S. — and therefore many political groups are tempted to jump on the bandwagon of calling themselves “socialists.” There is not enough space to address them all, except to say that they share one common theme. They all claim to want to help working people, or the poor, from above. But socialism is not about getting help from someone else. Socialism rejects the idea of a political hero coming along to save us. Socialism is about people helping themselves, saving themselves, and collectively taking control of their own destinies. Someone who says “support me and I will help you” is not a socialist. The socialist is the one who says “join me, and let me show you how to organize and help yourselves.”

In my third and final column of this series, I will attempt to describe in more detail what socialism actually is, rather than what it is not.

Mike Tudoreanu is a Collegian contributor. He can be reached at [email protected]