Politicians selling socialism are spreading economic confusion

Opinion polls show that 30 years after the collapse of the Soviet Union and its totalitarian socialist regime, a significant portion of Americans embrace some form of socialism today. More than half of young adult Americans have a favorable view towards socialism, and a full 55 percent of adult women say that they would rather live in a socialist country than a capitalist country. Looking at the entire population of the United States, 43 percent believe socialism would be a good thing for the country.

While socialism has not yet attained overall majority support, it is far closer than in the past. In 1942, at the end of the arguably radicalizing Great Depression, only 25 percent identified socialism as a good thing, when asked the same question. What does it say if capitalism, the bedrock of our national economy since its creation, can barely eke out majority support against what once appeared to be a dead alternative? How can the free market show so poorly against a system that is most clearly embodied today by Cuba, China, Russia, North Korea, and Venezuela?

First, policymakers in the United States and other developed countries have failed their citizens along two dimensions. The 2008 financial crisis caused excruciating pain still being felt by millions of unhappy citizens. While there are multiple and very complex reasons associated with this devastating failure of our economic system, many felt this could have been avoided through appropriate regulatory safeguards and oversight.

Unlike the catastrophic missteps that led to the Great Recession, another failure by policymakers has been continuing neglect of the impacts of globalization and vast technological change. Indeed, economics favors competition, where the winners can cushion the defeats of the losers so that everyone is ultimately better off. This critically important commitment of capitalism is necessary so that everyone agrees to play the game.

But for a long period of time, compensating the losers under this system, including through quality education and training, has been neglected. The ever widening inequality has resulted in a disenfranchised portion of the workforce that is now disillusioned with and skeptical of corporations and governments alike. The designation of serious losers has resulted in a lack of confidence in the capitalistic system that has so miraculously served our society by lifting the global standard of living to spectacular levels.

Second, another core problem is a breakdown of language, which may ultimately cost the United States much more than just confusion. Of course, opinion polls can be deceptive. It is hard to believe that after seeing the dank existence on the other side of the “Iron Curtain” anyone would want to live with a political and economic system that has caused so much human suffering and ruined so many countries over the years.

So what exactly does socialism mean to Americans today? There is clearly no common understanding. A very large segment of the population, in particular the younger generation, is enamored with promises of health care for all, universal basic income, and free college, all being made by Democratic presidential hopefuls. On the other hand, Republicans have taken advantage of those Democrats who have embraced the socialist label by defining it around the narrow definition of “government takeover and ownership of the means of production, distribution, and exchange.”

With such diverse and, in some instances, irreconcilable views about what socialism is, why are numerous presidential candidates selling socialism as a label? It is probably for the shock value. It is also probably because of the misunderstanding. Politicians can tell different groups that socialism is whatever they want to hear. With such inherent misunderstanding of the term, socialism is whatever they believe is wrong with the current system.

The United States is heading into a truly consequential election. The risk here is that people who want wider access to health care or free college will unwittingly find themselves arm in arm with people whose views of socialism are far different. We need to speak from the same dictionary. We need to understand that capitalism won us the greatest prosperity in the world and it can, with good public policy, broaden that prosperity again.

Bernard Bailey is president of the Committee for Economic Development. He serves on the board of directors of Telos Corporation and is chairman of the board of Authentix Corporation. Joseph Minarik is senior vice president at the Committee for Economic Development. He was chief economist at the White House Office of Management and Budget for President Clinton.