Socialism Is the Solution

If Bernie Sanders showed us anything in 2016, it’s that the next generation is no longer afraid of the word “socialism.” Bernie’s ascent from political obscurity to nearly winning the Democratic primary vote is astounding, especially when using the word “socialist” has been political suicide for generations. The mainstream narrative is that Sanders used his brash Brooklyn accent to charm millennials into nearly giving him the Democratic presidential nomination, but that he was ultimately unelectable because he called himself a socialist. But I’ll argue that Sanders’ popularity was not in spite of his socialist label, but because of his socialist label, and that democratic socialism is the only way we can successfully resist Trumpism.

Let’s leave our baggage surrounding the word “socialism” at the door and start with a clean slate. Socialism does not equal government control. Let me say this again. Socialism does not equal government control. Socialism does not entail a tyrannical federal government taking control of businesses, but rather its inverse. Socialism means deepening democracy.  

Under American capitalism, we have political democracy. We vote for our mayors, congressmen, and senators to represent us and make laws that we feel are in our best interest. Political democracy allows us to have a hand in creating the society we want to live in, and if our representatives aren’t doing a good job, we can vote them out.

Calling American capitalism “democratic” is only half-true, however. Despite having political democracy, we do not have economic democracy. Think about a horrible boss you’ve had. Were you able to speak up and change their behavior? In the vast majority of cases, no, of course not. You’re beholden to your boss, and at the end of the day, their word is law.

Many employees have little to no control over a company’s decisions, even if they do have fair bosses, because of the traditional “top-down” system. In essence, companies are little tyrannies where shareholders have all of the control and the workers are at the mercy of their judgment. If shareholders want to liquidate a company to make a couple million dollars and throw thousands of people out of work, hire a corrupt CEO, or pollute the environment—the employees have no power to say no. Make no mistake about it—this is economic tyranny.

Democratic socialism’s solution to economic tyranny is deepening democracy by democratizing the workplace. This means extending the American democratic ideal of “one citizen, one vote” to the workplace and creating a “one worker, one vote” workplace democracy. Rejecting the state-run models of Soviet-style socialism, economic democracy is a fundamentally different system than the socialist experiments of the 20th century. Under economic democracy, workers aren’t at the mercy of their bosses, because the workers are the ones electing their bosses in a ‘bottom-up’ system. This way, every boss will have a mandate to run the company with everyone’s interests in mind, including the workers. If the bosses don’t do a good job, they get voted out. The ownership switches from shareholders to workers, from tyranny to democracy.

Many democratic companies already exist. Companies run democratically are called cooperatives, and you can find them all over America and the world. You don’t even need to look far. Boston’s very own Harpoon Brewery is employee owned.

One of the most successful cases of economic democracy is found in Spain. The 10th-largest corporation in Spain, the Mondragon Corporation, is democratically run as a cooperative and has nearly 75,000 employees working in sectors such as manufacturing, retail, and finance. If any sector of the Mondragon conglomerate goes under, the company re-trains its employees and hires them in a different sector that needs their labor. Each year, a portion of the profits is given to every employee, making everyone accountable for their actions and creating a culture of participation, because every worker benefits when the company does better.

Mondragon values both ethical business practices and efficiency, creating true sustainability that is extremely rare under the current system of economic tyranny. In fact, it has been shown that cooperatives last longer than top-down corporations and avoid creating market bubbles that lead to market failure like we saw in the Great Recession.

At the heart of economic tyranny’s failure is the incentive structure. As any Econ student will tell you, economics is all about incentives. Companies today are incentivized to create value for their owners, the shareholders, which is often a detriment to everyone else in the company. This creates the insane amount of economic inequality that plagues America today, because companies are incentivized to push for higher profits over higher wages. With economic democracy, companies are still incentivized to create value for their owners, but since the workers are the owners, the company operates in the interests of everyone. Economic democracy creates more ethical and stable companies, which in turn creates a more equal and stable society.

Economic democracy attacks poverty and inequality at the root, removing the need for the government to come in and redistribute the wealth, because wealth will be distributed fairly naturally. Government programs like welfare and food stamps aren’t needed because companies are incentivized to pay their owners (i.e. the employees) a living wage. The economy is run from the bottom-up, creating a more prosperous and more equal society without government intervention.

Economic democracy is democratic socialism, and it is the only way forward because everything else had failed. American capitalism has run its course. We tried laissez-faire capitalism in the 19th and early 20th century, and it caused the worst economic crash in world history. We tried Keynesian reforms in the 20th century that ended in stagflation, and our Keynesian reforms after the Great Recession have failed to bring about a recovery for the majority of Americans (95 percent of jobs added under Obama were temporary). The average American wage is the same as it was in 1979 while expenses such as medical bills and college debt continue to push Americans to the brink of bankruptcy. Both Democrats and Republicans have been complicit in this rigged system, and this economic malaise is the very thing that fuels Trumpism and the alt-right. If we are to stop Trump, we need a new approach. It is time to deepen democracy. It is time for socialism.

Featured Image by Zoe Fanning / Heights Editor

  • tomte

    What is the purpose of having a boss, if you no longer have a “top down” system?