Defining Definitions in our Election Discourse

This post’s main purpose is to serve as an outlet of frustration over the muddling of definitions that is particularly prevalent in this election cycle. Prior to 2015, Americans’ understanding of the meaning and beliefs of different political ideologies already seemed confused (in my opinion). However, the rhetoric of political candidates has not helped. In particular, my complaints lie mainly with Bernie (who, for some inexplicable reason, has still not conceded to Clinton’s insurmountable delegate lead in the Democratic nomination). People seem to think he has done a service for the country by helping to “de-stigmatize” the word socialism, which is considered to be a much more prevalent ideology and economic system in Western European countries. However, I think that he has actually made things worse for political discourse by 1) confusing people about what pure, traditional economic socialism really is 2) by confirming the false belief among many that American liberals are actually best defined as socialists, when I’d argued they’re much more pro-capitalism than pro-socialism and 3) Potentially de-emphasizing needed attention on the very real destructiveness that pure socialist economics has historically wrought on societies and the many lessons that they entail. I will begin by laying out the different terms and what I think the definitions truly are before proceeding to the other arguments noted above.

  1. Socialism: Bernie Sanders likens himself as a socialist at heart. But is he really best described as that? My definition of socialism falls along with the economic, traditional definition of socialism. Particularly, it entails the “common ownership and control of the means of production”, typically by the state (although historically, many variations of socialism have appeared in which other entities, institutions, or the masses themselves own and control the means of production). The means of production are any economic inputs (typically tangible and physical) used to create economic value or output. They can include machinery, factories, roads, infrastructure, educational institutions, etc. In my mind, if Bernie Sanders was truly a socialist, he would advocate for the government to both own and control virtually all of the means of production (including businesses, factories, etc.) This would entail a program of large-scale nationalizations of industry. Aside from “nationalizing” (better termed as a national replacement) of health insurance and 100% public funding/control of tertiary education, however, he has no such program, and largely keeps in place private ownership and control of the means of production (e.g., he allows for businesses to continue to be privately owned and operated). Consideration of the fact that all societies have different ratios of private and public ownership of the means of production leads to the important point that these ideologies and policies do lie along a spectrum. But in describing whether he better fits a socialist mold or a capitalist mold, he’s arguably more pro-capitalism than pro-socialism in general. Only his advocacy of nationalized health insurance and tertiary education would make him truly relativelymore socialist than other candidates, per my definition. Instead, his policies reflect interventionism within the confines of a predominantly capitalist economic framework that he’d like to keep intact (e.g. the taxation and regulation of a capitalist economy, with other interventions in the form of government spending). As a result, he’s much better described as a social democrat or an American liberal than a socialist…
  2. Social Democracy/American Liberalism: First, it’s important to note that these two terms are not the same. But they are quite similar. Essentially, both argue, in consideration of my definition of socialism, in a capitalist mixed economy with heavy amounts of government intervention (taxation, spending, regulation). Although these ideologies do entail some elements of pure socialism (e.g. public roads, public schools, national health insurance, etc.), they are far from pure USSR-style socialism, as private industry is still prevalent (indeed, dominate) within their prescribed economic systems. Now, granted, the taxation and regulation of capitalist institutions that they advocate for entails some control of these private means of production by the state. But not full control by any means, and certainly not actual ownership, as pure, traditional socialism would entail. It is also true that social democracy did start out as an ideology of gradual reform of capitalism into a system of socialism via democratic means over time. Now, however, like American liberalism, it’s essentially the definition stated above, with an emphasis on income redistribution and social justice. Therefore, in social democracy and American liberalism, capitalism still reigns, and given Bernie’s proposals, he best fits within these categories (which, by the way, I’m far from the first person to notice or argue).

A few things to derive from above:

1) These terms are all pretty vague and overlapping, even utilizing the narrowest of definitions. There’s technically no 100% correct description to be found for different candidates and economic systems.

2) Economic systems typically contain a mixture of capitalist and socialist elements. In my view, it’s the extent that some elements dominate that truly characterizes systems and people’s political ideologies (e.g., if more common ownership of the means of production prevails in an economy or a person advocates for mostly common ownership, it’s a socialist economy or the person is socialist, respectively). This observation of non-purity can also lend support for a dialogue of relativity (e.g., someone or some economy is relatively more socialist or relatively more capitalist than another).

3) In my opinion, the taxation, regulation, and spending of social democratic and American liberal policy aren’t exactly socialist elements (at least, not pure elements; perhaps quasi-elements). Rather, I would argue they are forms of interventionism within a fundamentally/overwhelmingly capitalist framework (private ownership of the means of production). Thus, Bernie is a social democrat/American liberal, and American liberals are not truly socialists.

4) It should be clear that, even in overwhelmingly capitalist America, true socialist elements do exist that actually serve useful functions. Public roads, public schools, public infrastructure, etc. are indeed prevalent in all overwhelmingly capitalist economies and can technically be characterized as true examples of socialist ownership and control. What really matters is what economic means of production are private versus public and balance of the ratios in determining economic and societal well-being.

All of this is also not to say that the taxation, spending, and regulation advocated for by social democrats and American liberals do not have some negative consequences, even if such interventions are not really “socialism” (e.g. system is still mostly privately owned/controlled). And it’s especially not to say that purely applied, across the board economic socialism is not destructive, when it clearly has been in the past (USSR, China, Vietnam, etc.) The economic misallocation of resources stemming from predominate state socialist ownership and control (and the ensuing incentive and signalling problems) brought upon massive economic hardship and destruction of human well-being in multiple countries throughout the 20th century. That’s what’s truly concerning to me. Although socialism shouldn’t be the taboo word it has been, considering it is found to be functioning within American society at this very moment, people should be very weary of the extent of its application and for which segments of the economy it is applied to. The very same can be said for capitalism, too. Thus, we need to shy away from puritanical, black versus white thinking – with its all-or-nothing propositions – and finally let informed, pragmatic thinking lead the way.


The Inefficiencies of being Efficient

One of the most noticeable (and controversial) aspects of capitalist economies is their emphasis on productivity and efficiency.  Use and allocate resources wisely, with the most output for the least amount of input, and you enable a rise in living standards.  It is an underlying structural characteristic of all developed economies, especially that of the United States.  Here, an emphasis on efficiency permeates deeply into our culture.  We value punctuality, a strong work ethic (phrases like the “Protestant Work Ethic” come to mind, though it’s unclear if a relationship exists and, if it did, which caused what).  Our government has a strong military emphasis, where obedience, stealth, and stamina are a necessity.  Yet efficiency can, paradoxically, also lead to massive inefficiencies, potentially leaving us with massive new problems to deal with.

One obvious example of this is US consumerism.  The wealth that our economy has generated over time is enormous and, during periods when it reaches the “middle class”, extra disposable income has lead to explosions in consumption and the purchases of things that before were never considered “necessary”.  Wealth & income begotten by efficiency lead to an inefficient consumption of resources; we spent simply because we could.  A big example of this is the food situation in America.  People purchase enormous meals that they often do not finish, leaving entire plates full for the restaurant to throw out.  Of course, we eventually correct for our excesses for a while, with the pendulum swinging back towards efficiency.  But because technology has driven a fair amount of productivity growth, this lessens the need for a painful change in behavior.  Instead of consuming less, we can simply produce more – not necessarily from increased labor, but from more and better capital that either substitutes or complements labor.  The only reason we still have painful readjustment periods is because, despite unprecedented productivity growth and widespread income growth (for a fair amount of US history, at least), consumption has a way of growing so fast that new debt must be taken on, necessitating painful corrections.

There are other, less obvious, examples of when efficiencies can beget inefficiencies.  One way is that you reach a state of efficiency in an inefficient way.  For example, government spending has long been the target of the public, especially American conservatives, of being wasteful and unproductive (especially compared to the private sector).  Their ire is often directed at legislators, especially when it is revealed that no one has read bills that are passed and funding for special projects slips through, and fiscal conservatives regularly insist that officials comb through every appropriation and spending item.  However, the sheer amount of time and resources to investigate many of these expenditures could arguably outweigh the cost of funding some special projects.  Although government spending would surely be more “efficient” if funding for  “wasteful” projects were eliminated by having legislators look at every item in detail, it would come at a huge opportunity cost: to pass important legislation and go about the business of governing.  It would also involve more time and resources for investigation, and a setup of parameters of what truly makes a project “wasteful”.  Besides, the creation of specialized bureaucracies (another indication of a capitalist mindset – keyword “specialization”) have helped to target, control, and track individual governmental endeavors, helping to restrain inefficiencies.  The lesson?  Sometimes, its ok for spending to be increased, even if it is redundant or wasteful – because the cost of finding inefficiencies could outweigh the benefits of actually eliminating them.  The problem is, we won’t always know when this is the case – and finding out when this is the case could also be inefficient and a waste of resources.  Ironically, if we want to continue to have a government, we will have to accept that it will be wasteful – and that this waste might be the most efficient option we have.

The question is, at what point does the market-oriented mindset of efficiency paradoxically defeat itself?