The Cooperative Society Newsletter
September 2019, Issue 18
by E.G. Nadeau
Far too often, people use the same words, but mean very different things. This can be confusing, even dangerous, especially in the world of politics. With the lead-up to the 2020 presidential and congressional elections in the United States, it is particularly timely to take a close look at some of the major “isms” being bandied about by politicians, journalists, and pundits.
What does “populism” mean?
The word can apply to “a range of political stances that emphasize the idea of ‘the people’ and often juxtapose this group against ‘the elite’.”[1] But, right off the bat, use of the P-word runs into big trouble. You can have right-wing populists, left-wing populists, and demagogues like Rodrigo Duterte in the Philippines and Nicolas Maduro in Venezuela who claim to be populist, but have questionable popular support.
So, ultimately, the word populism has become meaningless. To use it spreads confusion and disinformation rather than political understanding.
How about “socialism”?
Socialism is another word that has become a lightning rod for mystification as we approach the 2020 elections. Although running as a Democrat for president, Bernie Sanders refers to himself as a socialist. Alexandra Ocasio-Cortez and Rashida Tlaib, both members of Democratic Socialists of America, were elected as Democrats to the House of Representatives in 2018.
So, what is socialism? The classic definition with origins dating back to Karl Marx and others in the mid-1800s is, “Economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”[2]
But, these three self-proclaimed “socialists” sound much more like Northern European-style social democrats, who favor mixed economies that combine elements of both regulated private enterprise and a public sector that limits economic inequality and attempts to provide a minimal quality of life for all citizens.
To further complicate the meaning of socialism, President Trump and other Republicans accuse progressive Democrats of being out to destroy the US economy by nationalizing corporations and turning the US into an economic backwater like Cuba or Venezuela.
We would all be better served by dropping the word “socialism” from the rhetoric of the 2020 campaigns and focusing on the specific positions that candidates take related to healthcare, climate change, gun control, and other issues.
What does “capitalism” mean?
A typical dictionary definition of capitalism is: “An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”[3]
The problem with a definition like this is that it doesn’t reflect the reality of the contemporary world economy, in which government regulation, taxation and incentives, and international trade agreements (and trade wars) play major roles in shaping the market in which corporations operate.
Virtually every country in the world – including such outliers as North Korea and Cuba – has a mixed economy, which combines private enterprise and public involvement in the market.
For example, Forbes’ Global 2000, the world’s largest publicly traded corporations, includes the four largest Chinese banks in its Top Ten list. These banks are predominantly government-owned, but also have limited investor-ownership.[4] The phrase “state capitalism” is often used to characterize the Chinese, Russian, Vietnamese, and other national economies in which the government has a major, direct involvement in the market.
The purpose of corporations is also being redefined by some of the largest publicly traded companies in the world. CNBC recently reported that the Business Roundtable, comprised of almost 200 CEOs of major U.S. corporations, stated that the foremost function of their companies should not be to “serve their shareholders and maximize profits.” Instead it should be “investing in employees, delivering value to customers, dealing ethically with suppliers, and supporting outside communities.”[5]
Conclusion
Thus, as with populism and socialism, capitalism is not a useful term to describe a national economy, or a political ideology. The reality is that in different countries and in the international arena, there is a wide range of ways in which private enterprises, public enterprise, mixed enterprises, and various forms of public intervention interact to shape economic activity. The word “capitalism” is useless in capturing this diversity.
Thus, as we consider candidates for public office and the track records of those who already are in office, it’s not the “isms” we should be looking at, but the specific actions they have taken or propose to take to improve our social, economic, political, and environmental well-being. For more on what The Cooperative Society Project perceives as major components of a better society, please click www.thecooperativesociety.org
[1] https://en.wikipedia.org/wiki/Populism
[2] https://www.merriam-webster.com/dictionary/socialism
[3] https://www.merriam-webster.com/dictionary/capitalism
[4] https://www.forbes.com/global2000/#68933a01335d
[5] https://www.cnbc.com/2019/08/19/the-ceos-of-nearly-two-hundred-companies-say-shareholder-value-is-no-longer-their-main-objective.html