The Trump administration is full of surprises. The White House’s Council of Economic Advisers (CEA) has just published a 72-page report called, “The Opportunity Costs of Socialism.”
The most interesting passage in its report comes in the opening sentences. “Coincident with the 200th anniversary of Karl Marx’s birth, socialism is making a comeback in American political discourse,” it says.
“Detailed policy proposals from self-declared socialists are gaining support in Congress and among much of the younger electorate.” The main “self-declared socialist” in the White House’s sights is, of course, Bernie Sanders.
Sanders’ bid for the Democratic presidential nomination in 2016 represents a particular danger for Donald Trump. He showed himself able to appeal to many of the same discontented blue-collar voters who tipped the scales in the Republicans’ favour.
His most popular policy proposal was for a single-payer healthcare system—something resembling the NHS.
This was shunned by mainstream Democrats such as Barack Obama and Hillary Clinton. But it would represent a huge improvement on the current system dominated by private healthcare and insurance companies.
Sanders isn’t a particularly radical socialist—more a European-style social democrat. So the CEA spends a lot of time criticising Nordic societies where social democratic parties similar to Labour in Britain were long dominant.
But it also targets Stalinist states such as the Soviet Union, China under Mao Zedong, Cuba and so on.
This has two aims. First, to smear the likes of Sanders by association with gigantic catastrophes such as the forced collectivisation of agriculture in Stalinist Russia and Mao’s “Great Leap Forward”.
Secondly, to rehearse the traditional critique of socialism made by free-market economists, namely that a planned economy is necessarily less efficient than the market.
All of this leaves out of account that the Stalinist regimes represented a complete distortion of the revolutionary Karl Marx’s original conception of socialism. That is, the self-emancipation of the working class.
Real socialism would be a self-managed economy run by democratic collectives of the “associated producers,” as Marx put it. Planning in this society would not be based on the kind of centralised command system built up under Stalin.
It would be on the basis of democratic coordination and negotiation between these collectives.
Moreover, many of the CEA’s shots fall well wide of the mark. The report ignores contemporary China. There, the Communist Party has presided over an extremely dynamic state capitalist economy integrated into the world market.
This is very far from the pure market economy imagined by neoliberals.
The CEA makes much of the fact that national income per head is about a fifth higher in the United States than in the Nordic countries. But just relying on gross domestic product (GDP) to measure well-being has long been discredited.
The United Nations Development Programme has constructed a Human Development Index (HDI). This takes into account not just GDP but life expectancy and education. In the 2018 HDI Norway comes first, Sweden 7th, and Denmark 11th, all ahead of the United States at 13.
The difference must reflect the effects of the healthcare and education offered by the developed welfare states in Scandinavia. These collective services don’t figure in individual incomes.
Moreover, the liberal American economist Paul Krugman suggests that “much of the gap in real GDP represents a choice, not a cost.
“Nordic workers have much more vacation, much more time for family and leisure, than their counterparts in our ‘no vacation nation’.”
As the CEA admits, the Nordic societies represent a compromise with capitalism. In recent decades this compromise has been breaking down everywhere under the pressure of economic crises and neoliberal policies.
No wonder that there is growing interest in a real socialist alternative to capitalism.
Crises are on the horizon