Why Not Democratic Socialism?

B y Rana Odeh

Can you imagine getting paid 100% of your salary for 18 months of maternity leave? What about never stressing over health care costs when you, your child, or your family members get sick? What about free college education, free childcare, and subsidized (healthy) food and housing? Does it sound too good to be true? This is not a utopian dream; this is the life that Scandinavians enjoy and Americans have come to fear. What if you could have that life with the added benefits of democracy and freedom? Well, this is what the Scandinavian economic systems looks like. Socialist policies such as universal health care, free college education, paid maternity leave and free childcare, do not take away democracy and freedom, but rather enhance the quality of life.

For a better understanding of Scandinavian systems, I interviewed Dr. Janet Spitz, Professor of business and expert on globalization and international economic systems. “When we hear that the Scandinavian socio-economic system would reduce democracy and freedom, we have to ask, in what ways are the Scandinavian people (Swedes, Finns, Danes, Norwegians) less free and less democratic than people in the U.S.?  In all of these lands, people are well-educated in public schools and, indeed, can take advantage of universities that are free of cost or cost a very minimal amount. Since a well-educated and informed electorate is essential to democracy, the Scandinavians are, in that sense, better off democratically than are we in the U.S.” Dr. Spitz said.

The election of President Barack Obama in 2008 has reignited anti-socialism sentiment and has caused many right-wing Tea Partiers to fear the rise of socialism. For those who accuse Obama of being a socialist; do not worry, there is not a single ounce of socialist ideology in his system or his administration. Obama has done a great job of continuing on the same path of free market corporatist capitalism like most of his predecessors in the White House since the 1980s. With the post-crisis handouts to big banks, and tax cuts to corporations, the Obama administration has reached a new low in policy making that further favors corporations. I am using the term “corporatist” in the colloquial American sense of the term, not to be confused with Swedish tripartite “corporatism” in which all major socio-economic policy decisions are made through a democratic participatory process by labor, corporate, and government representatives. The aim of this essay, however, is not to dissect Obama’s political ideology, but rather to ask, “why not democratic socialism?”

In an attempt to better understand the fear of socialism, I interviewed two retired school teachers who remember the Cold War all too well. The fear of socialism dates back to the Red Scare and the fearful anti-communism propaganda has been engraved into the memories of our grandparents, drilled through our parents’ minds in the McCarthy era (they literally practiced regular duck and cover drills), it has been filtered down to us in the form of anti-socialism propaganda, and will be taught to our children for generations to come through the new revised textbooks that stress the superiority of American capitalism. A long time Ohio resident in her late 60s who I will refer to as Joanna, vividly remembers experiencing the Red Scare drills and said “when I was in the 3rd grade, we were given dog tags that had our name and address on it.  We would have drills that had us go under our desks, put our heads down and cover them with our hands, as if that would save us from an atomic bomb… I was really afraid of the Communists for a while because I felt someone was going to bomb us,” Joanna said.

After generations of brainwashing, and the slandering of a particular ideology, in this case communism, anything that resembles communism in the slightest way is viewed (by the general uninformed public) as something to fear, and hate. “I am convinced that there was never a real danger of war with Russia. I don’t feel for a minute that in the years 1946 to 1960 or so, there was any danger that the Soviet Army was going to attack Western Europe. Americans are amazingly ignorant of history,” Ohio resident Andrew Alberico said. “We were never told any of the history. We were just told that the Communists were evil, that they wanted to take over the world, that they wanted to take away our freedoms, and that they wanted to destroy our capitalistic economic system. The kids today are being taught the same thing. Nothing has changed” Andrew added.

This anti-communism propaganda is so successful that it has led even the neediest people who would benefit the most from free healthcare, education, and more public services in general, to vote against their own self-interest. It is in the best interest of the poor to support government spending on job creation, and other social welfare policies, yet the poor in the U.S. have been taught to fear government intervention. It is the lack of government intervention in the current U.S. capitalist system that maintains the very low wages and harsh standards in which many are forced to work for survival.

I spoke with two Ph.D. students from Finland, who first-hand understand the impacts of democratic socialism, to clarify the following five major misconceptions of socialism:

  1. Dictatorship would replace democracy.
  2. Private property rights would be violated.
  3. Socialism destroys competitiveness and eliminates incentives for innovation.
  4. The quality of healthcare would diminish under a government-sponsored health system.
  5. Tax rates would sky rocket to unaffordable levels.

First, democracy and freedom are two crucial prerequisites for creating and sustaining a high quality of life. Neoliberal critics, however, argue that socialist ideologies and policies would diminish America’s democracy, but we can see through Swedish tripartite corporatism that employing a socialist system does not take away people’s freedom or democracy. On the contrary, social democracy enhances civic engagement and defuses the power of special interest groups; “in short, the Scandinavian model increases freedom, and increases democracy, paid for with higher taxes.  Americans who are at the top end of the income and wealth distribution in the U.S., and who would see their relative advantage erode under such a system, cannot legitimately say, ‘the Scandinavian system would make us more free and more democratic, so we’re against that because we want to keep most of our population afraid of homelessness and starvation.’ Instead they say, ‘the Scandinavian system would reduce democracy and freedom’ and hope that no one has any clue about the truth (or lack thereof) of that statement” Dr. Spitz said.

Second, private property rights, including intellectual property rights, are also strongly protected under the Scandinavian system, and have nothing to do with social welfare whatsoever.  “Protection of property is one of the first sections in Finland’s constitution,” Jussi Ahokas, a student at the University of Eastern Finland said.

Third, critics argue that in a socialist system people lose the incentive to be competitive and innovative, when according to a 2009 study conducted by the Boston Consulting Group and the Manufacturing Institute, the U.S. ranked number eight in innovation, falling behind seven socialist-oriented economies. “We have only to look at some of the most competitive businesses globally to see the falsity of that claim. Germany holds the global lead in manufacture of wind turbines.  The Volvo is a Swedish car that is globally competitive.  Nokia is a Finnish firm that makes mobile phones and tires and other globally competitive products,” Dr. Spitz said. Jussi attributes the high innovation rate of Scandinavian countries to government funding of public education all the way through college. The government does not only pay for your college education, but you can apply for an additional grant, “there is a great incentive to go to college” Jussi said.

The development of private property and innovation are not stifled by higher tax rates in the Scandinavian countries, so the American tax cuts to large corporations and high income earners are not justifiable as an incentive to innovate or to create a trickledown effect. We have seen through the current recession that the trickledown theory is just a myth. Innovation incentives are not the only route for big corporations to avoid paying high taxes, General Electric was able to completely evade paying its tax liability in 2010 by taking advantage of the many loopholes in the corporate tax system.

Fourth, healthcare is another industry that thoroughly understands the advantages of many loopholes and deregulation in the U.S. Despite what many believe, the quality of healthcare in the U.S. will not diminish if the federal government provides universal healthcare. The U.S. currently spends at least double the amount on healthcare per capita than all the countries that provide universal healthcare, and this is not to say that the quality of care in the U.S. is better. As shown in the 2009 Organization for Economic Co-operation and Development (OECD) health report, the U.S. has less doctors and beds per 1,000 patients than the average OECD country, which is a group of industrialized Western nations. The U.S. also spends the highest percentage of its funding on out-patient (including same-day) surgery, keeps in-patients for a shorter period of time than the average OECD country, and pharmaceutical drugs are 30-50% higher in the U.S. than in other OECD countries.

“Having recently completed a study of pharmaceutical profits, I can attest to the contribution that these enormous profits make to the cost of health care in the US.” Dr. Spitz said.  The U.S. is the only modern country that does not enforce price regulation, which allows pharmaceutical companies to enjoy such great profits. “One way pharmaceutical firms have staved off price regulation is through their lobbying activities, spending $24 million per quarter lobbying Congress people.  Pharmaceuticals are key players in maintaining the high cost of health care in the U.S., as one special interest group” Dr. Spitz added.

The quality of healthcare would be immensely improved for those who currently do not or have never had access to healthcare, and it would at least remain the same for the average American, at a much lower (or free) cost. “In Finland, everybody gets treatment and it is basically costless for the patient. All major surgeries are done by the public sector and the care is quite nice actually, I had a tonsillectomy done for about 90 Euros,” Lauri Holappa, a student at the University of Helsinki, said.

Countries that offer free, or at least affordable health care, in fact spend far less than the U.S. because people seek preventative care to avoid the emergency room, which is much more expensive. “Medical care is transformed from reactive emergency care to preventive care at a far lower cost, and with far superior results for the populace” Dr. Spitz said. “The overall quality of any health care system is indicated by the longevity index of that nation.  The U.S. ranks well down the list,” Dr. Spitz added.  While drug spending in the U.S. leads the world, the CIA World Factbook reports that the 2011 U.S. life expectancy at 78.37 years is 50th place in the world life expectancy ranking. The U.S. clearly does not lead the world in health care quality.

On another health note, the U.S. ranked last on paid maternity leave out of the 30 OECD countries. The U.S. federal government does not, at all, fund paid maternity leave, while all the other OECD countries offer at least a short-term paid leave, and Denmark offers a minimum of an 18 month, full pay maternity leave. “The Finnish government offers 18 months total parental leave, the father is allowed to use 6 out of the 18 months for paid paternal leave” Jussi said.

Chantal, a mother of a toddler and manager of a retail store in Dayton, was only allotted a 6 week paid maternity leave, consequently, she worked all the way through her 9 month pregnancy so she could have the month and a half at home with her newborn. Not only is it heart wrenching to leave a one-month old baby at home to return to work, but it also creates an unhealthy nursing routine for the mother and baby. Chantal worked early mornings and late nights during the holidays right after her baby was born, depriving him of his mother’s nurturing, “it was painful and awkward, I had to go pump in the back room of a retail store,” Chantal said. To top it all off, Chantal also has to spend over 20% of her monthly income on babysitting and said she would be spending at least one third of her income if she put her baby in a childcare facility.

According to the U.S. Census Bureau report on “Child Care Arrangements,” employed families living below the poverty line spend 32.4% of their monthly income on child care, families with a monthly income of less than $1,500 spend 34.5%, and families with a monthly income of $1,500-$2,999 spend 17% of their monthly income on child care arrangements. Employment is discouraged by this high childcare cost, which does not include baby food, diapers, pediatric care, transportation, clothing, or any of the parent’s needs. Childcare in the U.S. is unaffordable, to say the least.

Such high costs of healthcare, childcare, and education have driven U.S. households into unsustainable debt. “U.S. households have the highest debt-to-income ratio in the world, at a 2007 world record-high average of nearly 140%, meaning that if a household’s annual income is $75,000, it has a total debt of $105,000, excluding mortgage debt,” said Fadhel Kaboub,  Professor of economics at Denison University. “The debt-to-income ratio is even greater for the poorest 20% of American households, at a 2007 record-high of over 260%,” he added. This unsustainable level of debt is attributed to the excessive lending prior to the Great Recession that banks have resorted to, in order to encourage more consumer spending; which is the engine of U.S. economic growth.

Finally, when we consider the few necessities on which Americans spend their income; food, health, education, housing, transportation, and child care, it is clear that those priorities are very expensive for the average American, but very affordable for the government to guarantee to all. Although the federal government could afford this socialist-oriented system without raising the average person’s tax burden, we should realize that if the government provides these social services, and subsidizes healthy food and housing, Americans would afford to pay higher taxes, enjoy their current lifestyles, and could afford to save, which is currently impossible for many. “Between paying higher taxes and eliminating social welfare policies, the majority of Finns would choose to pay higher taxes, it is less burdensome,” Lauri said. “Nobody goes hungry in Finland,” he added.

What Americans should fear today is not stronger social welfare policies, but rather the erosion of our educational system, health system, public infrastructure, environment, and social services. We must not fear socialism, but instead the media propaganda that keeps us misinformed, politically disengaged and apathetic, and undermines participatory democracy. If having a more socialist-oriented system means having a better quality of life in a free and democratic society, then why not democratic socialism?

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