Screenshot: CNBC/YouTube
On May 6, 2019, Matt Novak writes on Gizmodo:
Billionaires Bill Gates, Charlie Munger, and Warren Buffett were interviewed on CNBC this morning, and it wasn’t surprising to hear the three men defend capitalism. But it was surprising to hear Gates make a really good point about socialism. Or, at least a good point about how socialism is defined in the U.S.
Gates pointed out that the current surge in pro-socialist rhetoric in the U.S. isn’t really socialism by any strict definition of the word. The so-called “socialist” policies we’re hearing from politicians like Alexandria Ocasio-Cortez and Bernie Sanders are largely just capitalist policies with a strong social safety net. And that’s okay!
“Socialism used to mean that the state controlled the means of production,” Gates said on CNBC. “And a lot of people who are promoting socialism aren’t using that classic definition.”
“What we’re going to have is capitalism with some level of taxation,” Gates said, kind of hinting that he assumes progressive candidates will win out in the future. “Most people really aren’t arguing against capitalism. There may be a few, but most people are just saying that the taxes should change.”
Gates told CNBC that he’s in favor of more progressive tax rates on the wealthy and the reinstatement of the estate tax, which was virtually eliminated by President Trump. But Gates also said that he’s in favor of capitalism in general and that most people who are ostensibly arguing for socialism in the United States aren’t actually advocating for socialism. And he’s right!
Most Americans on the left aren’t advocating for all workers to own the means of production and for every industry to become nationalized and for the complete abolition of private property, which are the actual tenets of socialist ideology. Most left-leaning people (which is to say, most Americans) support politicians who, at the end of the day, are promising to deliver capitalism with a strong social safety net.
Just take a look at the self-identified democratic “socialist” politicians and their policies. AOC supports housing as a human right and on her website says:
“Alexandria supports extending tax benefits to working and middle-class homeowners, expanding the Low Income Housing Tax Credit, housing (not sheltering) the homeless, and permanently funding the National Affordable Housing Trust Fund.”
But there’s no indication that what she’s putting forward is socialism. It’s capitalism with a strong social safety net.
Or take AOC’s federal jobs guarantee:
“A Federal Jobs Guarantee would create a baseline standard for employment that includes a $15 minimum wage (pegged to inflation), full healthcare, and child and sick leave for all. This proposal would dramatically upgrade the quality of employment in the United States, by providing training and experience to workers while bringing much-needed public services to our communities in areas such as parks service, childcare and environmental conservation.”
Again, that’s not socialism in the classic sense of the word. It’s capitalism with a strong social safety net. And most wealthy countries in Europe already have the things that AOC is proposing—things like guaranteed paid parental leaveand universal health care. That doesn’t make those European countries socialist. It makes them social democracies.
Unfortunately, America doesn’t have a substantial Social Democracy Party, so anything to the left of the mainstream Democratic Party is simply called socialism because Americans don’t have the vocabulary to talk about these things with more subtlety than a binary left-versus-right.
To be clear and to make my biases known, I once called myself a Wellstone-Democrat but would now consider myself an AOC-Democrat. And frankly, I wouldn’t mind being called a socialist by American standards. But what’s being floated on the mainstream political stage right now isn’t real socialism. If AOC was a politician in any other part of the world with a parliamentary system she’d probably be considered a very mainstream Social Democrat, not a socialist. It’s a sign of a very sick country when these ideas of fairness and helping your neighbor are considered radical. And Gates, love him or hate him, is correct in his assessment of the political landscape.
Why do people like Bernie Sanders and AOC get lumped in as socialists and even call themselves by that term sometimes? Because Fox News spent the Obama years calling every policy from the Democratic Party socialist. The Affordable Care Act used to be the free market solution to America’s health care troubles in the first decade of the 21st century. Mitt Romney even passed something similar when he was the governor of Massachusetts, but people forget that Romneycare is older than Obamacare simply because there’s a propaganda machine called Fox News that labels perfectly reasonable mainstream ideas as “socialist.”
As a result, you have two generations of people (Millennials and Gen Z) who are simply embracing the term socialist without worrying too much about what it means exactly. To younger generations, socialism just means making sure that everyone can go see the doctor when they need to, or have a roof over their heads, or have money to buy food, no matter that person’s circumstances. And these generations are imagining that all within the existing system, not overthrowing the ruling class and installing a new political system run by the working class.
As Gates points out, there are some real socialists in the world. And there are even real socialists in governments around the world. Spain’s Socialist Party just won seats in last month’s elections, for example. But most Americans are simply leftists when you strip out the party labels and talk about policies. Bill Gates knows that and Donald Trump even knows that (remember when Trump basically advocated for universal health care?), which is why the propaganda infrastructure needs to be maintained in the U.S. if people like Trump want to keep advocating for one thing while actually implementing something else entirely.
I think the most good can result if the focus of billionaire and millionaire wealth is on reforming the monetary and financial system to eliminate the requirement of “past savings” to qualify for capital credit to finance viable capital asset formation and provide for EVERY citizen to acquire ownership stakes in future viable capital asset formation simultaneously with the growth of the economy, without taking from those who already own.
The study of billionaires would certainly result in either inheritance of large sums of capital asset ownership stakes or savings accumulated to invest in wealth-creating, income-producing capital assets, on the basis that the investments paid for themselves. In either case, the key operative is “past savings,” which the vast majority of people do not have as they are dependent on jobs in which they earn insufficient income to meet their personal and family consumption needs. And because they are trapped in poverty or near poverty, or even in middle-class status, they cannot earn the income to satisfy their wants above their consumption necessities.
If only these billionaires and millionaires would support education to enlightened all Americans and politicians to reform the monetary and financial system and enact legislation to provide an annual equal allocation into the capital credit account of EVERY child, woman, and man strictly for investment in new viable capital asset formation projects tied to the growth of the economy, which generate their own revenue stream to initially pay off he loan and following produce a full-earnings dividend for consumption (creating further demand for the economy’s responsible growth).
Of course, there needs to be a financial mechanism put in place that will guarantee loan risks; otherwise banks and lending institutions will not make the loans, and the system will continue to limit access to capital acquisition to those who already own capital — the rich. This is because “poor” propertyless people have no security or collateral, or sufficient income resulting in savings to pledge against the loan as security, and/or are disqualified on the grounds of either unproven unreliability or proven unreliability.
What historically empowered America’s original capitalists was conventional savings-based finance and the pledging or mortgaging of assets, with access to further ownership of new productive capital available only to those who were already well capitalized. As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security — those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer through their continuous accumulation of capital asset ownership, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need it.
Thus, the question is who pledges the security and takes the risk of failure to return the expected yield from which to repay the loan. The answer is capital credit loan security (collateral) requirement can be replaced with private capital credit insurance or a government reinsurance agency (ala the Federal Housing Administration concept).
Criteria must be created to qualify the corporations, both new start-ups and established ones, subject to this policy and those corporations that qualify overseen so as to insure that their executives exercise prudent fiduciary responsibility to generate loan payback. Once the guaranteed loans are paid back to the lending entity, the new capital formation will continue to produce income for existing and future owners.
The non-profit Center for Economic and Social Justice (www.cesj.org) is dedicated to such education to alleviate poverty and educate on the financial mechanisms and legislation necessary to put America on a path to inclusive prosperity, inclusive opportunity, and inclusive economic justice.
At the CESJ Web site are volumes of articles and proposed legislation focused on broadening individual capital asset wealth and income simultaneously with the growth of the economy, without redistribution by empowering EVERY citizen to be productive through their capital asset and their labor contributions to the economy.
The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on the State and whatever elite controls the coercive powers of government.
Support the Agenda of The JUST Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
Support the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/
