Fuzzy Thinking: Obama, Capitalism, and Socialism

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Mr. Moss is a professor of history at Eastern Michigan University. For a list of his recent books and online publications, see http://people.emich.edu/wmoss/pub.htm.

Fuzzy thinking is rampant among us. Michael Moore, out with his new movie "Capitalism: A Love Story," is often an incisive critic of corporate abuses and powers that threaten to weaken democracy, but he is inaccurate when he declares that the “opposite of capitalism is democracy.” In the ongoing debate on health care legislation, some of Obama’s opponents charge him with trying to institute socialism. Again, inaccurate. Confusion abounds. What is capitalism? What is socialism? Only a historical perspective can enlighten us.

Nineteenth-century capitalism was not a pretty picture. Look at  Marx’s Das Kapital, the novels of Charles Dickens, or the Irish famine of mid-century. Often quoting factory inspectors’ reports, Marx’s book contained such lines as “that boy of mine when he was 7 years old I used to carry him on my back to and fro through the snow, and he used to have 16 hours [of work] a day . . . I have often knelt down to feed him as he stood by the machine, for he could not leave it or stop." In novels like Hard Times, Dickens depicts the ugliness that the capitalism of his day often revealed—his fictional Coketown “had a black canal in it, and a river that ran purple with ill-smelling dye, and vast piles of building full of windows where there was a rattling and a trembling all day long, and where the piston of the steam-engine worked monotonously up and down.” During the Irish famine, roughly 1 million people died between 1846 and 1851. The laissez faire capitalist ideas of the time were hostile to almost any government regulation of business or private property, especially any that would curtail employers’ rights. Thus, the British government refused to stop the export to England of food grown by starving Irish peasants because it was the private property of absentee English landlords.

In reaction to such capitalism, Marx and others began a socialist movement that gained strength as the century progressed. In contrast to capitalism—in which the means of production such as land, labor and machinery are primarily owned by individuals and businesses that produce and exchange goods and services to earn a profit—socialism advocated government ownership of key areas of production and greater control and regulation of the economy. But just as late twentieth-century capitalism had evolved as compared to its earlier version, so too had socialism. The essence of capitalism remained private ownership and the earning of a profit; and the essence of socialism, greater government ownership of at least some key areas of production and greater regulation of the economy. But the competition between capitalism and socialism had produced hybrid systems over much of the industrialized Western world by the beginning of the twenty-first century. A U. S. State Department publication in 2001 declared that though “the United States is often described as a ‘capitalist’ economy,” it “is perhaps better described as a ‘mixed’ economy, with government playing an important role along with private enterprise.”And in Western Europe, governments tended to exercise even greater influence.

For much of the twentieth-century, the term “socialism” was used in two very different ways. Communist governments referred to themselves as socialist, as in the Union of Soviet Socialist Republics (USSR), and they were not democratic.  But in Western Europe, socialist parties abided by the democratic process and often came to power in various European countries. Since they tended to alternate in office with more conservative non-socialist parties, however, it was not really accurate to refer to their countries as socialist. And just as socialism could operate in a democratic or non-democratic setting, so too could capitalism. But the non-democratic type of capitalism existed on the right side of the political spectrum, as in General Pinochet’s Chile (1973-1990), and not on the left.

Capitalism itself is not a political system like democracy, but an economic one. The conservative economist Milton Friedman once wrote, "The social responsibility of business is to increase its profits." And the American sociologist Daniel Bell wrote in The Cultural Contradictions of Capitalism (1976) that “in its products and in its advertisements, the corporation promotes pleasure, instant joy, relaxing, and letting go,” and that this situation left “capitalism with no moral or transcendental ethic.” Although it can be argued that capitalism has certain moral ramifications, in its essence it is neither moral nor immoral, but amoral.

To make up for this lack of a moral ethic, reformers in Western Europe and the United States between 1890 and 1914, often referred to as progressives, suggested various reforms. U. S. progressives advocated social legislation such as the prohibition of child labor, improvements of women’s working conditions, and comprehensive social insurance for sickness, unemployment, and old-age poverty. In 1912, they put up the former Republican president Theodore Roosevelt as the Progressive Party candidate for president, but he was beaten by the Democrat Woodrow Wilson. Although Roosevelt was no socialist, he and other progressives supported some of the same social reforms as did U. S. socialists and he was critical of the Republican candidate, President William Howard Taft, for being too beholden to big business.

U. S. reformers were often influenced by previous reforms in Europe. In the 1880s, the conservative German politician and statesman Otto von Bismarck pushed through three measures that provided nationally-backed insurance for sickness, accidents, and old age. But many German socialists considered him their greatest enemy, and he took his actions partly to weaken these opponents. Between 1906 and 1912 Great Britain’s Liberal Party enacted an Old-Age Pension Law, a National Insurance Act, medical assistance for school children, “workingman’s compensation,” and minimum wages for some sweatshop workers. Many of these measures were only applied in a limited way, but to help the state contribute to these programs it raised taxes, especially on the wealthy. In both Germany and Britain, some who objected to these policies accused the government of enacting socialism. But in Britain, as in Germany the charge was inaccurate. One of the leading forces behind these new government actions was Winston Churchill, then a member of the Liberal Party but never a socialist, and he began and ended his career a member of the Conservative Party and while a Conservative twice served as prime minister

Cries of “socialism” and “socialist” were also often heard in the United States when reformers suggested government actions to address social problems for which capitalism provided no solution.  One of the great progressive reformers was Jane Addams, who advocated women’s rights and was a founding member of the American Civil Liberties Union (ACLU) and the National Association for the Advancement of Colored People (NAACP). She was often falsely accused of being a socialist or communist, but was later (1931) awarded the Nobel Peace Prize. When Franklin D. Roosevelt proposed Social Security opponents also cried “socialism.” In the 1960s when Medicare was being debated, the American Medical Association (AMA) had a leading actor speak out against it on a record entitled "Ronald Reagan Speaks Out Against Socialized Medicine."  

One irony of the current debate is that many of the reforms earlier proposed by socialists or progressives accused of being socialists have since become law. The poet and Lincoln biographer Carl Sandburg, a former socialist who later supported Democrats such as Adlai Stevenson and John Kennedy once said of the 1960 Democratic platform: “That’s a very good imitation of the national Socialist Party platform adopted in Chicago in 1908.” From expanding human rights, including the rights of women and African-Americans, to establishing government programs like Social Security and Medicare, history has been on the side of progressives. Although Margaret Thatcher in England and Ronald Reagan in the USA convinced many people in the 1980s that “big government” was bad, the long-term trend has been to rely more on government to fix problems that capitalism does not adequately address. In the USA in 1955 (before Medicare and Medicaid), Social Security and health care accounted for 7 percent of federal expenditures; by 1995 it escalated to 40 percent.  

There is no doubt that many evils have existed in systems that have called themselves socialist (think of Stalin’s crimes) or capitalist (as some of Michael Moore’s films depict) —though no fair-minded person would argue that the latter examples are as monstrous as Stalin’s evil. But name calling, fuzzy thinking, and scare tactics do not contribute to meaningful political solutions to complex problems. In September 2009, President Obama stated in that "it's an argument that's gone on for the history of this republic, and that is, What's the right role of government? How do we balance freedom with our need to look out for one another? . . . This is not a new argument, and it always evokes passions." He also said that “even though we're having a passionate disagreement here, we can be civil to each other. And we can try to express ourselves acknowledging that we're all patriots, we're all Americans and not assume the absolute worst in people's motives.” 

There is plenty of room for legitimate debate on all aspects of the present health care legislation, including the desirability of “a public option” to provide more competition to private health insurers. And honest criticism of corporate and government abuses, inefficiencies, and undemocratic ways should always be welcome, but not fuzzy thinking and scare tactics. In the 1880s, the conservative German chancellor Bismarck admitted that he had borrowed some socialist ideas and declared: “If you believe that you can frighten any one or call up specters with the word ‘Socialism,’ you take a standpoint which I abandoned long ago.” Like Bismarck, we too should abandon such fear.

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Vernon Clayson - 10/13/2009

How kind of you to offer advice to a "layman". I presume you consider yourself a professional, of something or other, because you so deftly brush me aside as a layman. However, being a professional is hardly a title of great worth today. At one time professional meant those judged by their peers, e.g. physicians and attorneys. Now every paid member on a sports team is deemed a professional, bricklayers are professionals, cops are professionals, teachers are professionals, etc., etc. While I downgrade them to some extent they are the equal of whatever it is that makes you not a layman.

Arnold Shcherban - 10/8/2009

Your last "response" (containing no arguments just your personal feelings) does not deserve my answer.
The fact that you're a layman, having little idea what what intelligent debate is, shows too much...
Leave HNN alone and have a good life.

Vernon Clayson - 10/7/2009

Health care as a "borne right" is a silly premise. It's unclear to me whether you intend "borne" to mean carried/inherent, etal.,by the mere fact of being born, birth itself a toss up as there are any number of things that can stop the process. That aside, to say it's a right to be dictated and financed by government is being more than a little dramatic. Up to the present billions of humans have been born, lived and died without considering that the conditions and treatment of their health was a matter for government intervention. It appears to me that you are a little like Sally Struthers in the long ago ads bemoaning the fate of children in Africa, just one dollar a day, sob! I grant it would be great if every child was born to a mother living in comfort and plenty during her term and then being born in hygienic modern facilities but that isn't going to happen and isn't necessary. Don't get all moral on me, life finds a way or haven't you noticed that even the most primitive of peoples have managed to multiply, chances are likely that a huge majority of the six billion persons alive today were born without a doctor paid by the government in attendance.

Arnold Shcherban - 10/7/2009

Mr. Clayson,

First of all, NO country in the world is a "paradise" (or close to that even in relative terms), in any regard.
If someone habitually claims one country to be a paradise (or close to that) in virtually all aspects of life it is not me, but the American corporate elite and politicians along with the PR machine controlled by the former.
Secondly, the main point that I'm making, as it should be clear to any half-brained from my previous posting, that the same politicians and the same PR machine continiously
scare the majority of Americans, already brainwashed by them and, in addition, quite ignorant and uneducated socially and politically, by alleged bad shape of European, Canadian, and other more socialized health care systems, drawing a distorted (often, completely falsified) picture of low-quality, patient-suffering and denial-of-medical treatment as a regular, daily practice of those systems.
The relevant facts and figures, however, reflect quite different picture. Also, and I emphasize this statement for any defender of democratic social principles, as you undoubtedly claim to be, the overwhelming European and Canadian majority are satisfied with their health care system not a bit less than
you are satisfied with the "used-to- be-one" in the US.
You, however, did not provide any response to that main point, but instead concentrated on the costs and taxes.
Well, I have something to say on the latter issues, too.
The crucial issue here is (and always has been) whether an individual health care is a borne right (similar
to a property right which is considered to be virtually divine under US Constitution) or a privilege. Most of common sense folks everywhere in the world say it is the right, but many, especially in the US
consider it to be a privilege (of the same kind as a job is, e.g.) for which individual has to pay somehow.
If health care is a right then federal government HAS to fully pay for it (taxes and costs aside), the same way it pays for legal and enforcement system that protects, say, the property right;
if health care is a privilege than government may not pay for it at all, or pay partially - at its discretion.
Since most of the folks being in sober mind casually express an opinion that good physical and mental health is the most precious thing a living person can have, I would second the conclusion that health care is a borne right, not a privilege.
Now - about taxes. Existing now in US tax system is a very poor imitation of a modestly progressive one, existing in the most of other democratic capitalist countries, European and Canadian ones, in particular, and really progressive ones - in Sweden, Denmark, Norway, Finland, and some others.
There is no evidence that federally taxing the highest income folks (that account for just 10% of the total number of taxpayers) more heavily, say up to 50%, will significantly affect their life-style and wealth concentration. Simply stating: rich will remain rich. Under that scenario, provided that government
distributes thus newly gained resources in public interests, MOST of American citizen will have better life and CHEAPER health care.
Yes, insurance companies and doctors would be making much less profits, but
the patients would be winners, in the most crucial aspects of health care. I presume the latter are the ones any national health care system should primarily care about.

Vernon Clayson - 10/5/2009

Mr Shcherban, whatever are you talking about? Germany and Canada, the health care paradises you mention have tax rates that subsidize health care that Obama and his cronies envy. Cuba is different, of course, they barely have an economy, so tax rates are't an issue; a large part of what little economy they have is American dollars mailed to Cubans by relatives in the states. I suppose if a Cuban needs an operation the facilities and equipment they've nursed along since 1959 will suffice, it doesn't have to be expensive. Anyway, the issue here has nothing to do with your health as an individual, it has to do with government controlled delivery and financing of that care. The question is who decided these b-----ds have to be involved if you develop an illness or suffer an injury. It's always been that the person with the illness or injury went to a doctor, the doctor made a diagnosis and treated it, payment was made or arranged and the patient went home. Now the government wants to know all about you, about how you incurred the injury and illness, and also provide a treatment checklist and expense permitted for the attending doctor to follow for your particular condition. It will be more complicated than that, of course, I'm merely an individual, a layman, while they have legions of attorneys and accountants to bring up finer points.

Mike A Mainello - 10/5/2009

Ms. Garafolo your a hoot!

What comedy clubs are you appearing at so I can watch your act!

Arnold Shcherban - 10/5/2009

The author and others are not juggling
isms but you and the ones like you, i.e. plutocrats and their anti-democratic cronies do it and the former are just reacting.
Its enough to listen Fox channels
for just one evening and it
will make abundantly clear who is the most frequent user of those isms ornamented with dozens of pretty and ugly epithets, respectively.
On the other hand Americans are yet to hear screams of despair coming from
either Canada or Europe (or Australia where they practice public option) and
wide spread demand to overhaul their
health care system.
All reliable professional evidence (in difference with the ideological one provided by such folks like you) coming from international health care institutions points to superiority
of Canadian and European system in practically all pertaining aspects: cost, diagnostics, quality and effectiveness of medicines, patient care, life span, etc.
Contrary to a myth propagated by the plutocrats and their cronies, really needed care is never denied there.
It is never denied to anybody even in poor Cuba.
But... it is denied daily and to dozens of thousands here in the richest country in the world, and claysons know this fact quite well, but, of course, will never admit it.
The scare tactics utilized by American
haves and demagogues, who are on their payroll, to ideologically brainwash already brainwashed and mostly ignorant of the rest of the world and even their own country's realities have nots have worked as usually.
The health reform, as a joined creation of pseudo-Democrat pussycats and pseudo-Republican bullies will be delivered to American people, but in such a distorted and ugly form (thanks to "free-minded" claysons) that will make it financially and professionally unfeasable.
Thus the very idea of democratic (not Democrat) unified health care is to be defeated to sincere joy of plutocratic minority, as I predicted
months ago.

Mike A Mainello - 10/5/2009

So as I understand it you want someone to give you health care like they do in Cuba (Just for your information Cuba barely has enough money to buy toilet paper for there people and is not even self sufficient).

You want a health care professional to go to school for 8 years and then to accept whatever payment the government deems fair and reasonable. You expect that person to provide you the highest quality care possible.

Do you work for a living or do you sponge of the government trough? I mean are you over paid or live off of the taxpayer?

What else do you think the government should give us? Food, water, shelter, child care, transportation?

Please tell me this was sarcasm.

Arnold Shcherban - 10/5/2009

for EVERY US CITIZEN, not a competition.
Human health is not a born-given right (like life himself) only to religious cooks or profit-insatiable crooks, and therefore, it has to be protected.
The evidence is abandunt and overwhelming that private insurances (as every private enterprise) are more after profits, than people's health. They are the ones who drive the cost of health-care up and up on both sides: doctor's and patient's. And in chasing greater and greater profits (much like Wall Street crooks) they do it largely disproportionately to the natural and temporal cost increases.
No one but federal government can stop that tendency, the same way it
says (but, unfortunately, do little)
it is going to regulate large banks and investment firms.
Really it should be one-tire system that gives an unfettered right to any
kind of health care to every citizen from their birth to death, as it is, say, in Cuba, or was in the Soviet Union.
Then, however, doctor occupation will cease to be the one with the greatest income and insurance and pharmaceutical companies are not going to enjoy hysterical profits. God Mercy our souls...

Vernon Clayson - 10/5/2009

The author, obviously juggling 'isms, appears to be saying, like a hangman speaking to a condemned man, "this will only hurt for a second". It doesn't take a genius to see that the US is moving to the socialised medicine of Europe, the dream of those sponsoring the movement is that they believe, falsely, we have the wealth and resources to succeed where the countries of Europe, and Canada, have overburdened themselves with the responsibility of providing health care from birth to death. They, Europe, and Canada, and others, lack the wealth and resources to provide the promised care in a timely fashion so they ration care or deny it, Ah, but we are rich and that can't happen to us. As freaking if! The most hateful thing about the plans of Obama and his cronies, sad to say, is they treat physicians as if they were tradesmen delivering service. No surprise there, Obama and his cronies are attorneys, lofty thoughts and premises are their business and they believe they can better judge life and death decisions than tradesmen.

Mike A Mainello - 10/5/2009

There is plenty of room for legitimate debate on all aspects of the present health care legislation, including the desirability of “a public option” to provide more competition to private health insurers.

I can't fathom in the current debate where there is in anyway where a public option can provide more competition.

The federal government can keep going into debt to support there plan, private companies either go bankrupt or find some ways to cut costs. The federal government can dictate the terms of service and payment.

If the federal government would establish broad guidelines in which insurance companies could operate, set minimum service requirement, allow purchasing of health care across services across state lines, and maybe provide some type of tax credit for individuals that want to purchase on there own, then you may have increased competition. But currently the government dictating coverage options and pricing only helps the politicians and not the people.

vaughn davis bornet - 10/5/2009

Having studied and written with some effort on capitalism, socialism, and communism in years long gone, I wish to observe at first reading that this is a most useful essay that should be distributed far and wide among college students in the social sciences. It reads simply, it has the story essentially right, and it handles the passage of time and the intercontinental development of events with skill.

I do hope it doesn't just get buried and not get reprinted.