Conservatives need to
learn the difference between socialism and social democracy. Because if they
continue to denounce as socialism any attempts to make life less nasty, brutish
and short, more people will start to think that socialism is okay.
“The power of the State should not be used for its own sake, but as a
way to give people the security they need to pursue the lives they choose.” The
Economist
And as I’ve written before, this is how to make globalisation, free
trade and free markets work – through redistribution. Not through a wholesale
retreat from globalisation. And certainly not through the government taking ownership
of the private sector. But by taxing it appropriately so that everyone gets to
enjoy the benefits.
Otherwise, capitalism’s disenfranchised and dispossessed
masses – the ‘losers’ from unfettered free markets – will become too great in
number, and will fight back against the system, without necessarily realising
that the problem is not globalisation, but the distribution of its benefits. As
The Economist
stated “… by insuring people against some risks of creative destruction,
welfare states would bolster democratic support for free markets” (at first
glance, counter-intuitive for an institution that has traditionally been very much
in favour of free markets and State inaction, but upon closer inspection,
actually consistent).
It seems there is specific terminology to help with this
distinction – ‘socialism’ vs. ‘social democracy’. Socialism if you want the government
to seize the means of production; social democracy if you just want them to
redistribute the benefits more fairly.
And that’s an important distinction if we want people to
realise the difference between countries such as Denmark and Venezuela, both of
which conservatives dismiss as ‘socialist’. This is only true of Venezuela,
which ranks 179th globally in terms of economic freedom and is
currently suffering through widespread starvation and hyperinflation. Denmark
is ‘social democratic’ – a strong free market economy that ranks 12th in economic freedom, but with a government that imposes an average tax rate of
over 50%, and therefore redistributes significantly without actually owning the
means of production.
The result – compared to the US, Denmark has higher life
expectancy, more vacations, higher happiness and life satisfaction rankings, lower
income inequality, only marginally lower GDP per person (largely due to the
aforementioned vacations), and – contrary to conservative ideology that social
welfare disincentivises work – higher working-age employment rates (11 places
higher than the US in OECD rankings!). There’s probably also something to be
said for the fact that two-thirds of working Danes are unionised.
Of course welfare states can be reformed – especially in
light of increasing demands on them from ageing populations and immigration.
This could include gradually raising retirement ages and some
restrictions of recent immigrant access to social welfare, or to immigration
itself. But their effectiveness in terms of reducing poverty and inequality
while maintaining incentives to work, is far more important than their size.
If conservatives really cared about avoiding the evils of
‘socialism’, they wouldn’t use the label on countries like Denmark.
And they wouldn’t use it to describe any efforts to make life in the US less nasty,
brutish and short. As Paul Krugman eloquently puts it, if you spend all your
time dismissing health care, social safety nets, child care and disability
support as ‘socialism’, people will eventually (and incorrectly) decide that
socialism is okay.
