1 December, 2021

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The United States & Social Democracy

By Kumar David

Prof. Kumar David

The Scandinavian countries are held up as models of social democracy. The distribution of wealth and after-tax income is more egalitarian than elsewhere, freedom of expression, the press and religious rights are not restricted, the people choose their governments at free and fair elections and there is uninhibited licence in sex related frolics. Conversely, purist-leftists point out that the “economic system” throughout Scandinavia is capitalist; big enterprises and the commanding heights of industry and commerce are the property of a shy bourgeoisie. Production, reproduction and appropriation of surplus value conform to textbook definitions of capitalism. Both sides of have their point, but Scandinavia is not my topic today, it is the United States not so much for its intrinsic interest but because change there will inevitably spark global trends.

My friends Marjorie and Geoffrey in Orange County, California, are to all appearances fit, able and charming people. They down their beers, puff on their cigarettes, go for walks, drive two nice big SUVs and run a small business. But they collect social disability cheques of $600 a month each for some invisible frailty and their case is typical of maybe millions of others. Likewise the current labour shortage in the US is in part a constructed malaise. Small businesses cannot attract employees. People find it better to stay at home and collect unemployment benefits while others will only accept part-time jobs. You can get more by filing for part-time unemployment benefits and getting paid for half-day’s work. Small businesses say the problem is acute.

The shopping carts at Walmart, Cusco, Vons and such supermarkets are full to the brim and queues at checkout counters are long and slow. Some of this is thanks to huge Covid-relief monies pumped into personal bank accounts in recent months and therefore atypical. But obesity has been bursting at the seams for three decades. The point is that there is trickle down of material wealth to low-income classes in the US. This of course is not socialism but it keeps the wolf of revolution at bay. Still it’s an odd version of capitalism if you go by the classics. Sure, brash billionaires, coarse captains of giant technology companies and cigar chomping industrialists garner big profits and avoid tax using Pandora’s Box havens. America being what it is, matters soft and genteel in Scandinavia are loud and brash. It would be absurd to say that the same degree of income equity prevails in the US as in Scandinavia. Still the material lives of the four lowest (lower 80%) of the American income quintiles is not pitiable and not too far from Scandinavian averages.

Data for three countries a few years ago (comparative ratios have hardly changed):

Country                       Median per capita income          Gini coefficient  Population below poverty line

Norway                                    22,700 US$                   0.26                              8.4%

Sweden                                    17,600 US$                   0.28                             10%

United States                         39,000 US$                   0.39                             17.8%

In the Pie-chart of US GNP one might for simplicity imagine that federal and state government expenditure (16.6%) is spent mostly on the people (Medicare, social services, education and unemployment benefits) while conversely the 17.7% private domestic investment belongs to the rich (stock-market, new enterprises, grand houses). The big slice (68.5%) is consumption. One can conjecture (a bit risky but let me take the risk) that half of this is spent by the lower two-thirds of society and the other half by the top one-third. How much grand-crux wines can the rich consume and how many first-class air-tickets relish? Unless my guesswork is way out of order this means that 51% (16.6 + half of 68.5) is consumed by the lower two-thirds of society. What I am saying is that despite income inequality, the redistributive outcome of taxation and government support (above all health care) defuses pressure. [To pre-empt nit-pickers I need to admit that sales tax is carried mainly by the yakoo-classes and income tax is part paid by middle and lower-middle classes. Furthermore, government expenditure includes the likes of defence which hardly benefits the daily life of ordinary people].

Pie-chart

Bar-chart 1 shows household income spread. This is not Scandinavian social democracy but neither is it grotesque inequality which will incite the masses to pour out on the streets pitchfork in hand. American capitalism keeps yakos in line by dishing out a share of the pie while ours do it by intoning hela jathika abimane.

Bar-chart 1

This is not to deny that the filthy rich are getting richer at everyone else’s expense – I have no quarrel with Thomas Piketty. Bar chart 2 shows that the top-5% of income “earners” have hogged the largest part of the gains in the last three decades. Nevertheless this has to be taken in the context of a general upward swing of median US household income in the last half-century, see Graph. This is partly because the global hegemony of the US dollar, abominations like the Vietnam War and stooge Latin American dictators for much of the Twentieth Century. All this allowed imperialist and neo-liberal transfer of value created elsewhere in the world to the US. Nevertheless being rich does contribute to social complacency and cools the ardour of the poorer classes.

Bar chart 2

I have inflicted quite enough statistical injury and economic boredom on you for one Sunday. I move on by asserting that American democracy, battered though it has been in recent years by the far-right and by Trump’s antics, is durable. The power of the anti-vaccination lobby, though cerebrally retarded in the eyes of outsiders is grassroots, albeit cretin, populism in the terrain of America’s anything-goes democracy. Another example is that Black Rights Matter mobilisation in response to racist police brutality, actually consists of a majority of white marchers. The jealous independence of the judiciary is legendary. Determination to exert constitutional rights, despite grotesque displays like the freedom to run amok with guns, the right to infect others with Covid and such manifestations thought crazy elsewhere, are muscular exertions of spirited populism which would have had regimes reach for the machine gun in third world countries. For better for worse American populism is loud, brash and vibrant; it is not staid Scandinavia.

Graph

Lest you imagine I am composing a panegyric I must recount the grotesque underside of America, the hundreds of thousands of homeless street sleepers. Los Angeles has over 25,000 and New York even more; every big city has hundreds, some thousands. It is something you will not see in any European city or China, Korea or Hong Kong – perhaps a few psychologically disturbed people but not on a mass scale. Those who know Bombay or Calcutta are familiar with what I am saying on a much larger scale. But America is super rich so why you will ask aren’t a few thousand housing blocks being constructed, why is the state not funding a social welfare department? Honestly, I don’t know the answer. And the huge prison population – that’s a sign of social sickness.

I also have a grouse which is personal. The spread of political correctness in priggish sections of society and in main-stream media is tiresome. I suggest that red-blooded persons ignore it and speak and act like normal humans. Some persons we are reminded are lesbian, homo, bi, auto or omnisexual, but what’s the need to insert sympathetic references to this at every turn of dialogue? Don’t retch but the latest 007 has become a pansy. And if you want to give the American accent a slip, welcome to the club. But come on, this is all trivial stuff.

The unschooled and the intellectually handicapped imagine that socialism is only about rescuing the poor from material hardship, bugger political and democratic rights. This twist gained currency because the great revolutions of the Twentieth Century were in dirt poor countries and the revolutionary state was compelled to prioritise “bread, land and peace” and to repel foreign aggressors. Fair enough, but states so conceived unavoidably turned out to be caricatures of socialism – say the USSR, China and Cuba. True they fed the masses but that’s only half the game, and indeed some capitalist ones have done well too – Japan, South Korea, Singapore and the Chinese province of Taiwan. You don’t need to consult the classics to be familiar with the axiom that socialism asserts it is a higher form of civilisation. Readers I am sure are familiar with “The freedom of each ensures the freedom of all”; “Necessity is blind until it becomes conscious”; “The human being is in the most literal sense a political animal”, and such aphorisms. Socialism sans democracy is an oxymoron.

You will appreciate where I am going. Socialism is not about bread alone but also about cognizance and liberty. But first I have more to say about bread in the United States. The Biden Administration, driven by the left-wing of the Democratic Party, is pushing the$3.5 trillion Build Back Better Act spending plan. Add to this the $1 trillion infrastructure bill already approved and it becomes a humongous $4.5 trillion programme. To give you an idea, of scale, the US spent $13 billion (about $ 160 billion in today’s money) on the Marshal Plan, an economic recovery programmes for Western Europe after World War II. The proposals American progressives are pushing is an order of magnitude larger in substance and in trickle down money. Republicans, big business and about 1500 paid Congressional lobbyists are fighting it tooth and nail.

My conclusion is straightforward. It is easier for the United Sates to move towards socialism than for any other country including China. Regimes with a bogus ‘Democratic Socialist’ tag on their brand name are a hoax. America and China are the only countries which can serve as global porotypes. But since it is a truism that Socialism can only flourish on a world scale that means, right now, it’s Hobson’s choice. I am no starry-eyed dreamer unaware of the pernicious extension of the by no means forever bygone Cold War, nor the menace of another conceivable Hot War. The world is replete with dangerous neo-fascists; Trump has plenty of company. My purpose in this essay, nevertheless, is to remind readers of dimensions of this story other than the trite. I am confident that democracy will not die in the US short of civil war. It’s impossible to reverse history against mighty odds and proto-fascism will be destroyed in such a civil war. Hence, I have no option but to differ from my carousing buddy Vijaya Chandrasoma – “How Democracies Die”, Sunday Island 17 October – about the impending death of democracy in America. VC is familiar with Mark Twain’s quip re exaggerated announcements of his demise.

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