Democratic socialism is in vogue. That’s troubling.
U.S. Senator Bernie Sanders, who ran against Hillary Clinton in the Democratic primary, calls himself a Democratic socialist. So do New York Congressional candidate Alexandria Ocasio-Cortez and New York gubernatorial candidate Cynthia Nixon. And membership in the Democratic Socialists of America (DSA), though still small, has jumped from 6,000 in 2016 to more than 45,000 today.
So what is democratic socialism?
“The Democratic Socialists of America (DSA) is the largest socialist organization in the United States,” according to the political group’s website. “We believe that working people should run both the economy and society democratically to meet human needs, not to make profits for a few.”
In other words, it’s socialism, with the word Democratic tacked on to make it more palatable to those who don’t like every aspect of their lives controlled by the government. The Medicare for All proposal we wrote about yesterday is just one example of what to expect.
How do you define “working people?” Who’s going to define “human needs?” If we’re all sharing profits equally, what incentive will entrepreneurs have to create businesses? Answers to these questions are not apparent, but Democratic Socialist Meagan Day provides a clue in a Vox article explaining Democratic Socialism.
“In the long run, democratic socialists want to end capitalism,” Meagan Day wrote on Vox. “And we want to do that by pursuing a reform agenda today in an effort to revive a politics focused on class hierarchy and inequality in the United States. The eventual goal is to transform the world to promote everyone’s needs rather than to produce massive profits for a small handful of citizens.”
That’s a misguided goal. In the U.S., anyone who owns stock in a public company is sharing the “massive profits” created by that company. In a socialist country, virtually everything is owned by the government.
In the United States we have equality of opportunity, which rewards hard work, innovation and risk taking. Take away the profit incentive and you will have few, if any, entrepreneurs. How many life-saving drugs have been develop0ed by socialist countries? How many technological innovations have come from socialist countries?
For some idea of what to expect if the United States were to shift to socialism, look to Venezuela, which had the fourth highest per capital income in the world in 1950, thanks to its oil reserves. As recently as 1980, it had the world’s fastest-growing economy, according to The Wall Street Journal.
Hugo Chávez become president in 1999 and used oil revenues to fund massive increases in social spending. Today, with Chávez protégé Nicolás Maduro in charge, Venezuela’s economy is shrinking and the population is starving. The economy contracted by 16% in 2016 and 14% in 2017; it is expected to contract by 15% in 2018. Inflation was at 112% in 2015 and 2,800% at the end of last year.
“Economist Steve Hanke finds an annualized rate of around 65,000% for 2018, making Venezuela’s one of the most severe hyperinflations ever,” according to The Journal.
Meanwhile, Hugo Chávez’ daughter Maria has a fortune estimated at $4.2 billion. That’s the type of equality that socialism creates.