How America Hates Socialism without Knowing Why

Why are socialist programs so unpopular today?

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By Lixing Sun

Socialism in America is perceived as a stigma that has dogged not only Sanders’s campaign but also Obama’s entire presidency. As a matter of fact, among all programs introduced by the Obama administration, nothing is more contentious than Obamacare, despite the fact that it cost less than 14% of Social Security’s $870 billion or about 20% of Medicare’s $597 billion in 2015.

Is socialism bad? From the sweeping success of many existing social programs (dealing with a wide range of concerns including retirement, healthcare, food, housing, energy, education, childcare, farming, and others), the answer, apparently, is no for most Americans. But why are new social programs unpopular today?

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A major, yet hidden, answer lies in social trust in America. New social programs such as Obamacare compete for tax revenue. Taxes are common-pool resources, and their use must be fair. If trust is low in a society, people will be inclined to suspect others’ motives and avoid being cheated by freeloaders. So, any social program paid with tax dollars won’t be popular. That’s how, for instance, a fictional story told by Ronald Reagan about a Chicago welfare queen could turn many Americans against the welfare system in the 1980s.

Existing data show that across the OECD nations, the higher the level of social trust, the greater the tax revenue. Statistically, trust accounts for a substantial portion (44%) of the increment in a nation’s tax revenue (see the chart below).


Apparently, to adopt a social democratic system like that in the Nordic counties, you need a trust level above 80%. With a trust level under 50% now, America simply doesn’t have the necessary social foundation for socialism. This explains much of why it posed such a challenge for Congress to get Obamacare passed and why Sanders has lost his presidential bid.

Although social trust is a non-material commons, it’s the psychological backbone of our society and the very foundation of desirable political, economic, and social exchanges. A breach of trust can trigger a barrage of societal problems. And its crippling aftermath can linger for years. Italy provides a great example, as shown by sociologist Robert Putman. Until recently, southern Italy, a low-trust area rife with clans, mafias, and gangsters, lagged behind northern Italy, a high-trust area free from these social ills, in social and economic development.

For economists, social trust works like a lubricant that can lower transaction costs and facilitate trading activities. Its aggregate benefit can be huge for a large economy, favoring the emergence and growth of large firms and boosting GDP with lower levels of inflation for a nation and higher levels of trade between nations. In America, according to Steve Knack, a World Bank senior economist, trust (broadly defined) was worth 12.4 trillion dollars a year, or 99.5% of the income in the mid-2000s. It “would explain basically all the difference between the per capita income of the United States and Somalia,” he remarked.

In a low-trust market, everybody has to pay more for transaction. Constantly guessing others’ intentions and looking out for cheaters, people are unwilling to invest in business and participate in financial markets, especially for the long term. (The Shanghai Composite Index, for example, could shoot up by 153% and then dive 43% in just 14 months from July 2014 to August 2015.) As a result, firms, as political economist Francis Fukuyama has observed, tend to be small, and mostly remain family businesses. This, in turn, can lead to lower rates of employment and higher rates of poverty.

Now, why is social trust so low in our society? Much of the drop in trust (by more than 10 points) since the late 1970s can be attributed to the polarization in wealth and decline in social mobility. Economic inequality, as so many studies have shown, can dissolve solidarity, tear social fabric, destabilize society, and foster revolts and revolutions. No wonder trust among people disappears as society becomes divided between haves and have-nots. When people don’t trust their governments and their fellow citizens, who would be excited to contribute to the financial commons—taxes? That’s why lower levels of trust lead to higher rates of tax evasion. This was how Greece, reputed for low trust in Europe, lost a third of its tax revenue in 2010 while the nation was trying to survive a sovereignty debt crisis.

Though America fares better in public finance, recent developments are disturbing as social trust slides. As neither the rich nor the poor are willing to pay more taxes, raising taxes has become such a hot-button issue that it takes a lot of guts for politicians to speak for it. As a result, many existing social programs are threatened and new ones are thwarted. The decline in social trust has begun to hurt us.

So, how can we boost social trust? Three main ways avail us.

First, ethnic and cultural uniformity. Similarity breeds trust. This may work for the Nordic countries dominated by Caucasian Christians but not for America, given our ethnic, religious, and cultural diversity.

Second, crises. The Great Depression spurred the birth of Social Security in the 1930s. World War II nurtured an unprecedented national solidarity, leading to the conception of the idea of Medicare during the Eisenhower administration. This was also a time marked by what economists Claudia Goldin and Robert Margo called “the Great Compression,” when the top tax bracket was 91% yet the economy still grew briskly. The Cuban Missile Crisis, the assassination of JFK, and the zeitgeist of building a “Great Society” ultimately helped LBJ to push through Medicare, together with many other social programs. Most recently, the 9/11 attacks by terrorists triggered a new surge in social trust among Americans, although the solidarity was short-lived due to an unpopular war and the persistence of economic inequality.

Finally, fighting government corruption and reducing economic inequality. Data from the OECD nations show that government integrity lifts (by as much as 51%) social trust (see the chart below). Therefore, a feasible way to promote social trust is to increase government responsibility, transparency, and accountability.


(Integrity score data from Transparency International*)

Why, you may ask, does the US score decently in government integrity but quite low in social trust? This is because America is relatively effective in fighting illegal hard corruption such as taking bribes or kickbacks (and thus has an acceptable score in government integrity). Our legal system, however, has little power in combatting soft corruption—corruption that is lawful but unethical—including patronage, investment, lobbying, and campaign financing. A common type of soft corruption is the practice of the “revolving door,” by which politicians get paid later for their favor done to special interests. It is the prevalence of soft corruption that has made many Americans resent political establishments, leading to the rise of such unlikely presidential candidates as Ben Carson and Donald Trump.

Fighting corruption can promote social trust and reduce the influence of lobbying from special interests. A rising level of trust will help progressive taxation, which can harness economic inequality, which in turn can promote trust. So fighting corruption, controlling economic inequality, and raising social trust can feed one another, leading to a much healthier democracy, stronger economy, and happier society, as the Nordic countries have shown us.

As our democracy becomes more and more tangled in money, fighting soft corruption is hugely popular. For instance, 85% of Americans desire an overhaul of the current campaign finance system. Obviously, our nation is overdue for a new Teddy Roosevelt who can reaffirm his vow that “we hold it to be prime duty of the people to free our government from the control of money.” Sanders would have gathered much more support had he run his campaign on fighting political corruption rather than on the stigmatized and misunderstood socialist platform.

2016 June 16

*: To avoid misunderstanding, I have changed “corruption score” used by Transparency International to “integrity score.”

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  • Camillo Anania

    Thanks for the great article. Any reason why Italy is missing from Integrity and Social Trust graphs?

    • Lixing Sun

      Thanks for your kind words. I was unable to find complete data about social trust, tax revenue, and corruption index for Italy and Canada in 2012, the year where my statistical analysis is based on.

  • One thing I’d like to point out is that not all social programs require tax revenues to fund it. Nations that are monetarily sovereign, i.e. issue their own non-convertible currencies are not tax dependent for their revenues. The purpose of taxation for such national governments is different from state and local taxes.
    I refer you to this excellent interview –

    So once the citizens understand how their monetary system works, acceptance and implementation of social programs will become more easier. The mentality of “my tax dollars is paying for your benefit” should mostly go away.

    • Lixing Sun

      Thanks for the additional information! Completely agree with you that citizens should be better informed that a well-implemented social program can be a win-win for all.

    • This is a great point, and one that’s not usually made. Thanks!

    • Andrew

      The general point about looking beyond mere tax-and-redistribute patterns is a good one, but straying too far down the market monetarist path can be similarly misguided (if taken to its extremes).

      I would advise instead to question -what- we tax. Instead of taxing work through the income and payroll taxes, we might consider taxing value derived from propertied land. Then instead of a myriad array of bureaucratically social assistance programs, we might redistribute the tax revenues generated from land value to the general populace in the form of a universal basic income. In other words, transform social security into rent paid by land owners in exchange for the rights of private land property law.

      • Derryl Hermanutz

        Netbacker is not talking about the market monetarist path. He is talking about governments issuing money; instead of governments issuing bond debt and selling it to commercial banks who issue the money (deposit account credits) to buy the bond debts.

        We have a debt-based monetary system. Debtors issue debts. Commercial banks issue spendable deposit account credits to purchase those interest-bearing debts as the banks’ interest-earning financial assets. Which is why every government on Earth owes billions or trillions of bond debt; and private debtors owe more trillions of mortgage debt, student debt, car loan debt, credit card debt, line of credit and overdraft debt, small business debt, corporate debt, institutional debt, etc; than their bond-indedbted governments owe public debt. The debts are owed to the commercial banks that created the deposit account money supply to fund their bank loans and bond purchases. Debtors spent the deposit account credits and owe the loan account and bond debts. Payees earned (were paid) the credits that debtors borrowed and spent, so payees now own the deposit account money supply. But it’s all owed back to banks, as the debtors bank loan repayments and bank-held bond redemptions.

        In the present system only the cash money is created by governments and their central banks as debt-free money. Cash is only about 3% of the total money supply. All other money — about 97% of the total — is created by commercial banks as deposit account credit to purchase debtors’ loan account debts and bond debts. We have a commercial bank-issued credit-debt money supply system. Netbacker is talking about monetary system “reform” that involves governments creating significant quantities of their own debt-free money, and using the money to money-fund their program spending; rather than tax-funding or debt-financing (with more bond debt) the spending.

    • Larry
  • Fábio Almeida

    This text misuses the concept of socialism. In every instance of the term, it refers to democracy instead.

    • anotherneighborhoodactivist

      Interesting observation. I think the more politically democratic a society is—the more political power is equitably shared—the more inclined toward economic socialism it will be.

    • Andrew

      I think you may have meant to say ‘social democracy’? In which case you’d be correct. (“Democracy” alone is probably too broad a concept to be applicable to the topic at hand).

      America tends to have a lot of confusion over political terminology that is otherwise commonly understood throughout the rest of the world (see: ‘Liberal’). This is particularly true regarding the difference between socialism and social democracy. No doubt this confusion partly stems from the two concepts having the word ‘social’ in common.

      Social programs and corrective market regulations are hallmarks of social democracy, not socialism. Social democracy seeks to use state institutions to compensate for perceived social injustices in market economies. Socialism on the other hand seeks to completely supplant the concept of private property (ie, capitalism) with state ownership. Social democracy should not be confused with democratic socialism, a concept which attempts to place the state owned economy under democratic governance, but state ownership none the less. Bernie Sanders is deeply confused over the terminology he wields.

      Socialism has been a spectacular failure in its every manifestation. Social democracy, on the other hand, has played a large part in the success of the Nordic Model, and even America’s own medicare and social security programs. Yes, social democracy is not alien to America, it’s been ingrained in our country for as long as any other modern ideology. Americans simply have a mislabeling problem. Free markets and social safety nets can coexist just fine, and in fact complement each other nicely. Limited government helps combat corruption in the state, and social programs help combat corruption in the economy.

  • Stockdoc9999

    There is not one example of a successful socialist country.

    Russia, Venezuela, Argentina and Cuba etc. are shining examples of those that have failed miserably.

    • Sweden is doing wonderfully with their socialism. As well as Germany, Norway, and Denmark. Oh, but they have democratic socialism which differs from communism like night and day. And before you ask, I’ll tell you. A democratic socialist is not a Marxist socialist or a communist. A democratic socialist is still a capitalist. Just one that seeks to restrain the self-destructive excesses of capitalism and channel the government’s use of our tax payer’s money into creating opportunities for everyone.

  • Reed Schrichte

    Is the hard corruption easier to factor into the cost of doing business and therefore more predictable, whereas the soft corruption is less predictable and leads to greater uncertainty? It seems that our legal system in particular has become utterly and shamelessly mercenary.

  • BetterFailling

    First of all this is not socialism but taking care of your own.
    In this respect I agree with the author about the link between social trust and behaving in a generous manner.
    My experience tells me that socialism means being told by the government what you have to do – something in line with common core, gun control, zoning laws, etc, etc.
    Maybe one of the things that have to be done is loosing the very notion of ‘redistribution’.
    Taking care of your own, when your fellow citizen is in trouble or so old/sick that he can no longer fend for himself, is one thing, ‘redistribution’ – taking from Paul to give to John – has other connotations.

    • Fraser

      that’s not socialism, in fact, that’s fascism. Socialism is a system in which the “the means of production, distribution, and exchange should be owned or regulated by the community as a whole”. Your definition mirrors the ignorance (not pejorative here) of the average American. Also, this fear of “taking from Paul to give to John” is indicative of the lack of social trust – your salary is not generatedi n a vaccum, it is generated in the context of a socioty, and there are costs involved in taking care of that society. One of the risks of thinking as a taxpayer as opposed to thinking as a member of a society is that we lose track of that fact as assume that “my taxes” are going to support someone who just plain doesn’t want to work.

      • BetterFailling

        Sorry, fascism has a lot in common with socialism.
        Both are authoritarian systems where the leaders use governmental power to defend their own, personal, interests and to control the population.
        In a way both are a sort of feudalism 2.0

    • Toni LeAnn Williams

      Our biggest redistribution is to the rich. Yet, the Republicans never scream about that. Subsidizing corporations with billions and trillions a year is considered “free market” by the Republicans. Ha! Giving over 300 tax credits to corporations is not even considered to be a handout by the Pubs. Just a couple weeks we Democrats were called liars because we dared suggest that corporations and the rich get free money. The Pubs told us that tax credits, loopholes, subsidies, and tax rebates are redistributing the wealth and not socialism to the rich. That “saving them money” is totally different than “giving them money” and is not a handout. How do we fight such ignorance? We can’t. The ignorance in too ingrained now. And it will never change. We might as well face it—nothing will get better because the voters don’t want it better. If they did, they’d vote for better politicians and they never will.

  • Lixing Sun

    Enjoyed reading the spirited discussion, and thanks all for your insights! Democratic socialism in this little piece should not be mistaken with Marxist socialism, Bolshevism, or communism where there is no element of democracy.

  • Patrick cardiff

    I mean, I see a chart that apparently compares something called “social trust” and tax revenues, but nowhere are we informed about how “social trust” was parameterized. I’m sorry maybe I’m missing it. What is the definition? Tax revenue is objective, but if you are going to “go empirical” (i.e., correlate) with these huge macro aggregates, you had better specify HOW.

  • John Kirshon

    There is much confusion about socialism, as the comments indicate below. This article only adds to the confusion. Simply put, socialism is the democratization of the economy — which will enhance social trust, which is why it’s called socialism! The cause or our and all social distrust is capitalism, which can be defined as a search for profit that has anti-social consequences.

    • Andrew

      Socialism is not the democratization of the economy, it is merely wrapping the oligarchy in the formalities of the state through its exclusive ownership of economic property. It gifts the elite with the power they already possess, while thanking them as liberators. Even subjecting the state to the nominal authority of democracy does not dispel the concentration of power that is the very essence of the state and the life blood of the oligarchy. They are one and the same.

      • John Kirshon

        You are accurately describing “state capitalism” or “state socialism” as it existed and failed in the USSR et al and to a great extent in the US today, which many call fascism not socialism. Few socialists now seek a state-centered form of socialism, but rather a decentralized, community-based system based on cooperatives and worker-owned and worker-managed small enterprises, where ordinary people, not elites, live and work democratically. If you are interested in learning more and keeping up with the times, see Prof. Richard Wolff’s organzation or start at:

      • Giovanni Mangraviti

        Ownership of economy property is an outdated concept. Focus is now which amount of public services and welfare are provided for all, and not on how it is provided, outsourced or whatever. People do not care about that. In that context, If having very high taxes supporting the world highest Gini index is not socialism, I do not know what is.

  • Why isn’t Canada included?

    • Lixing Sun

      Please see my reply to Camillo Anania.

  • Toni LeAnn Williams

    None of this writer’s ideas will work in the USA. Our politicians are too corrupt and too used to being bought by big money that they love catering to. The Republicans have lied their heads off so long that none of they voters would ever believe them if they suddenly told the truth and said social programs help everyone and the economy to flourish. Never going to happen. Save your money. This is just a money-grabbing ploy. You might as well burn up you money.

  • Toni LeAnn Williams

    We Democrats had a chance to try to bring about change and try to end some of the corruption but we blew by staying with the establishment and voting for Hillary. Voters don’t want change, and they don’t want to get rid of the banks and corporations being in control. Voters want to keep us meek little puppets with no power and totally downtrodden. So we will be stuck with Citizens United, probably forever, because greed and power is king, and once our politician got a big taste of scads of free money, there is no going back to the farm or small town ideals. We can’t get any voters to vote against the corporations and banks. In Iowa all the corporate hacks won the primaries. Voters said, “We hate these politicians but we think they can win.” And now we are told we HAVE to vote for Trump and Hillary or the world will come to an end—even though they are both terrible candidates.

  • Socialism is nothing more than putting out all the fires in a forest. What happens after a long time?

    The current state of economics is based on an equilibrium model: An outside force is needed to change things. This is a whole lot like modern liberalism: Everything is equal. But there is another way to look at things: Stability is destabilizing.

    Did Hyman Minsky find the secret behind financial crashes? – BBC News –


    Because moving into the future involves a feedback loop process: The past heavily influences the future. This kind of process will always crash if negative feedback is suppressed: Socialism.

  • Alex Ioana

    The R square value doesn’t measure degrees of causation. This misinterpretation of the data (which stands as basis to at at least two arguments!) makes me feel like I should suspect more of how your research is done. Sorry guys, this is the first article I’ve read from you that I’m not planning on sharing.

    • L. Sun

      Thanks for being skeptical and careful in reading my little piece! Although the statistics are mine, the causal relationship comes from social scientists such as sociologists and political scientists. I could have been more explicit. From my experience in teaching statistics and statistical consulting, I share your experience in how often people mistake correlation with causation.

      • Alex Ioana

        Hah, thanks for the reply! I’d like to take this chance and maybe get your thoughts on something.

        My own statistical analysis shows that patterns emerge when looking at government systems around the world – and out of all forms taken by states today, constitutional monarchies best everything when it comes to how close they come to the measurable ideal of statehood (i.e. civil liberties and political rights given to the population).

        The (relative, sort of) outliers of this – and the reason why constitutional monarchies come up as being so good, are the Scandinavian countries. No surprises, right? We all know they’re apart.

        And yet here you tally them up as being something akin to socialist states. Of course I’m exaggerating for the sake of argument but in essence this is your claim – and a sound argument on why Americans don’t understand the ideology you mention. Or is it?

        Put in historical context (which so often gets cited in such kinds of work) shouldn’t it stand as a paradox that monarchies get labeled as socialist? I’d tread lightly when going into this. I’m a European myself, and I must admit that rarely – if ever – do I hear Europeans argue the benefits of socialism over, say, conservatism, by appeal to the Scandinavian model. That’s because, simply put, they’re not socialist.

        Of course they maintain the welfare state and employ taxation to make this possible, but from this to socialism (which is a term used all too easily) there’s quite the gap that can’t be bridged.

        What you’re talking about might be social democracy. But not socialism.

        In the profoundly polarized model of American politics (which has trickled down to other states around the world more than anything economic over the past decades) the simple act of thought with respect to polity-models becomes a battleground for ideological sides.

        Liberals and conservatives are the two big facets of this, and the general discourse encourages people to consider either of the two as a prescription of how they must think about politics.

        This is neither beneficial, nor to be encouraged. It’s just manageable, and it makes life easy for those already in politics. The reality is far more complex.

        The countries you consider prone to socialism (in the form of social trust) aren’t really socialist. More to the point, the case can be made that it’s not due to politics that people are encouraged to develop social trust, rather it’s precisely because of the cultural specificity (which includes social trust) of certain states that make for good politics.

        In those countries, taxation is high but leveled out by high income levels – something I doubt the American public will ever be willing to gamble on. But this is all in the context of markets which have been from their very beginning free – and to this day Scandinavian states are notoriously free when it comes to their markets.

        Social democracy is what Americans might not understand, since social trust is much lower there. Yes, you can say that. But not even the states you consider socialist really do understand socialism.

        • L. Sun

          Thanks for these additional thoughts! As you allude, many Americans have confusions between democratic socialism and communism, the latter of which was broadly claimed as “socialism” by the former communist nations such as Eastern European countries and the USSR.

          Social trust is not only related to cultural specificity (as you correctly point out) but also to cultural institutions (legal, economic, & political systems). From a biological standpoint, diversity does not favor social trust naturally. So a nation (such as the US) that stresses on ethnic and cultural (such as religious) diversity and minority rights while playing down integration and citizenship education tends to lack a common sense of purpose in building the nation.

          In the US, it has been shocking to see how strenuous the force is in fighting for lower taxes, while income taxes are already among the lowest in the democratic world. As if it were not hard enough to build trust among diverse ethnic and cultural groups, the current rising trend of soft corruption has eroded public trust further.

          In your Europe, the recent tides of immigrants from Africa and the Middle East has and will continue to pose new challenges for social trust as well. While I do agree that ethnic and cultural diversity should be respected and emphasized, I think it would be a huge mistake if nations fail to reach out to old and new minorities with a common set of citizenship values and a practical measures for integration. If this core issue is not resolved, I can predict that many of the European nations will see their public trust erode, people fight harder for lower taxes, and the welfare state dissolves.

          • Alex Ioana

            Having read your reply, I’d first like to thank you so much for taking the time to write.

            I agree, given current conditions social trust in certain parts of Europe is bound to take a hit. And in countless examples, it already has.

            Yet due to my digressing in the previous comment I feel that I must come back to what I wanted to say: Socialism isn’t an innocent term.

            What nowadays is (most of the time, at least) expressed by socialism is the conceptual sphere of leftist ideology, related or not to the works or Marx. But this is primarily a delimitation with respect to the world of ideas. Socialism is a family of thoughts. I speak this having an education which included at certain points political philosophy and political doctrines, so please forgive my bias.

            Also, please keep in mind that I never used the term you mention, specifically ‘democratic socialism’ – which is precisely what my own birth certificate states about the country where I was born, and that happened to cripple the life of my parents while it destroyed social trust, to say nothing of the economy (whatever that is, since GDP per capita, as we all know, doesn’t reflect quality of life).

            While I regret such confusions, the truth is that I too understand where they come from. And yet when engaged in a conversation which, ultimately, has its purpose in furthering the understanding we have around a certain topic, I find it necessary to clarify that ‘democratic socialism’ is either a direct reference to countless communist regimes, or a terminological slip.

            Put differently, in the beginning there was socialism – a concept which goes back to around the 17th century. Following the development of Marxism, socialism went through a crisis of values: given that (we socialists) understand the problems of society and wish to attain a better tomorrow that will repair the mistakes of yesterday, we must condition our struggle by rules.

            That’s where social democracy split from communism (mind you, I speak of Europe. Asian communism rests on a different conceptual basis).

            While the former embraced democratic struggle, the latter took to guns and gulags, all the while proclaiming ‘socialist democracy.

            Do you see my point? Of course you can say or write what you wish, but you run the risk of not being precise in your meaning.

            Forgive me my ranting

          • Dr.K.Prabhakar

            Dear Professor L.Sun,Thank you for excellent discussion on social trust. I come from India and in the graph India is missing. I know that the social trust is very low in India due to its diversity and low trust in both government and in industry made the population pay low taxes or evade taxes and investment in gold rather than browses. Am I right in suggesting these hypotheses? If I need to test these hypotheses may I know the data sources? With warm regards, Dr.K.Prabhakar

          • Lixing Sun

            Dear Dr. Prabhakar: The reason India is not in my chart is because India is not an OECD country. And the data I got for the small article were from the OECD website. Also, OECD countries tend to be relatively more similar in economic and political systems. This relative homogeneity allows for the effect of social trust to stand out.
            As to your question, I agree with your hypothesis. When trust level is low, people are less willing to invest in commons (national parks, environment protection, cutting down carbon emissions, public transportation systems, etc.), which are typically supported by taxes. A common excuse for being unwilling to pay taxes in the US is that the government is too big and controls everything. (In fact, the US government is tiny when compared with those of many former communist countries such as China and Russia.) This is in itself a manifestation of the declining social trust, a sentimental that is nicely echoed in some of the negative comments against the simple finding about the relationship between social trust and tax revenue. When people don’t trust their governments such as the situation in India, as you have mentioned, people become short-sighted, for a very rational reason. They are less willing to invest in the future. When people have little faith in fiat moneys, of course, gold, as a safe haven, is something they think the values can be preserved. This a hostile situation unfavorable for economic and social development. Hope I have answered your question.

  • Steven Rogers

    There seems to be a definition issue here, with social programs, social democracy, and socialism used interchangeably. Hard to really classify the Nordic democracies as “socialist”, unless you really really want to.

    • Giovanni Mangraviti

      If having very high taxes supporting the world highest Gini index is not socialism, I do not know what is.

      • Steven Rogers

        By rigorous definition, “socialism” would be state ownership of the means of production, distribution, and exchange. If definitions aren’t rigorous, they are useless.

        • Giovanni Mangraviti

          Not even China has today such “total state ownership”. Definitions that do not work for making pragmatic conclusions are indeed useless, and in fact depend on who made them. Some are frozen in time, dated. Words for words work for nothing. Today we can only talk about trending to the left or to the right, there is nothing absolute. China today is at the right of North Korea. Socialism is the trend to promote high distribution of wealth, measured by the Gini index, and Norway has the highest in the world. And it is not a distribution of poverty, because the purchasing power per capita is also very decent, with a figure not as high as the US, but close to, because in the US the average is calculated adding Warren Buffett’s fortune with the latino cleaner income and dividing by 2.

          • Steven Rogers

            China is neither socialist nor capitalist. There is no functioning economy on the planet today that is socialist or capitalist. All of them are hybrids, blending elements of these hypothetical extremes.

            The terms “socialism” and “capitalism” should be largely retired, as they’ve ceased to mean anything. You have your own definition of socialism, but it’s only yours, and when everyone defines terms on their own discourse becomes complicated.

          • Giovanni Mangraviti

            It looks like you agree with my previous statement about “socialism trending”, and that nothing is absolute. However, to me it is clear Norway is much more socialist than the US, and that it has worked for Norwegians.

          • Steven Rogers

            Without a consensus definition of “sociaism”. terms like “more socialist” are too vague to be of use. Norway also scores quite high, in fact only fractionally below the US, in the Heritage Foundation’s Index of Economic Freedom, not generally regarded as a scoring system that rewards socialist policy.

          • Giovanni Mangraviti

            That’s why I prefer income distribution measurements, i.e. Gini index, to justify my “more socialist” assesment, than the yet vague “Freedom” terminology.

          • Steven Rogers

            You assume that more equal income distribution must be a consequence of “more socialism”, an assumption unsupported by evidence or reasoning. The Nordic economies succeed by blending “capitalist” elements like a high degree of economic freedom with “socialist” elements like a strong social safety net. That’s not “more socialist”, it’s a hybrid system that suits the economies in question. Whether the same blend would suit any other economy is open to question.

          • Giovanni Mangraviti

            Capitalism has been associated with a rightward trend, whereas socialism has been identified with a leftward trend, as discussed before. My co-national Norberto Bobbio, worldwide recognized as one of the major exponents of left-right political distinctions argued that “the Left believes in attempting to eradicate social inequality, while the Right regards most social inequality as the result of ineradicable natural inequalities, and sees attempts to enforce social equality as utopian or authoritarian”. Putting all the above together, I see the Scandinavians implementing a tax system with very high tax rates declaredly to promote a more equalitarian income
            distribution, resulting in welfare policies unarguably much more intensive than in the US, as a corroboration the Scandinavians are indeed more socialist than the US.

          • Steven Rogers

            Left/right distinctions are economic, not political. “Socialism” as generally defined is measured not by taxation or eradication of inequality, but by state control of the means of production, distribution, and exchange. The Scandinavian economies, like most economic successes, have succeeded not by being more right or more left or more socialist or more capitalist, but by finding the blend of capitalist and socialist elements that suits them best. The management of production, distribution, and exchange in the Nordic economies is entirely capitalist.

            IMO it has long ceased to be a useful or helpful distinction, and the less we speak of “socialism” and “capitalism” the better off we are.

          • Giovanni Mangraviti

            Left/right distinctions are economic? This terminology was
            coined in France, in 17989, when Louis XVI convened a national assembly. At the right of the king, honor position even by biblical standards, set the clergy and nobility; at the left, the anti-establishment members, which ultimately threw out the monarch with the French revolution. Since then, right wing means preserving traditions and left means challenging the establishment. Until today, European political parties, where this terminology was created, are classified as extreme right, center right, center left and extreme left (communist).
            So it is an ABSOLUTELY POLITICAL distinction.
            Regarding the definition of socialism, we are going in circles here: by the “old definition” you mention, not even China is socialist, but I hope nobody would argue China is far left from the US. Interesting your
            stating that “the management of production, distribution, and exchange in the Nordic economies is entirely capitalist”, and right after you surprisingly say “the less we speak of socialism and capitalism the better off we are”. What I conclude from the two statements is that we can say what is capitalist, but we can’t say what is not capitalist.

            Such positon, part of the desire to deny there are leftist success stories in the world, is based in the apparent belief that the only extraordinary part of Nordic economies are the welfare states. Except for their generous social benefits, everything else would be capitalist and even more capitalist than the United States. But this is not true. In addition to their large welfare states supported by high tax levels, Nordic economies are also home to large public sectors, strong job protections, and labor markets governed by centralized union contracts. Some figures:

            Percent of employees employed by government (2008): USA
            14.5%; Finland 22.9%; Denmark 31.5%; Norway 34.5%.

            Value of state owned enterprises as percent of GDP: USA
            0.4%; Finland 53.3%; Norway 87.9%.

            Strictness of Employment Protection Index (2013): USA 1.17;
            Finland 2.17; Norway 2.31; Denmark 2.32; Sweden 2.52

            Percent of employees covered by Union Contracts (2013): USA
            11.9%; Norway 70%; Denmark 84%; Sweden 89%, Finland 93%.

            Even on the old, narrow understanding of socialism as public
            ownership of enterprise, the Nordic countries are far more socialistic than most seem to realize, and yes, they are much more socialist than the US.

          • Steven Rogers

            The terminology has evolved considerably since the 18th century.

            No, China is not socialist. So what? There is not one “socialist” or “capitalist” economy on the planet. All of them are hybrids to some extent. These terms are archaic and have long outlived their usefulness; they are pointless genericisms that obstruct meaningful discussion of policy. What is or is not socialist or capitalist is sublimely irrelevant; what matters is what policy blend will work under any given set of circumstances. Labeling policies as “socialist” or “capitalist” only encourages emotional reactions that serve no constructive purpose.

          • Giovanni Mangraviti

            1- The terminology did not lose the original meaning for those who invented and own it, Europeans in general, Scandinavians in particular. They call their system democratic socialism.
            2- Yes, there no absolute socialist or capitalist country, I have maintained we can only talk about trend to right or to the left. So what? Let’s stop saying that Scandinavia is capitalist, admitting that their policies and legislation are much more leftist than the US ones, as the presented figures unquestionably show.
            3- It is very “relevant and constructive” not leading people to demonize the above mentioned leftist policies with generalization and lacking recognition they can work in a democratic, not corrupt environment, and admitting that in the case of Scandinavia it produced the highest standards for quality of life by any standards you look at, for all, not for a few.

          • Steven Rogers

            There is no logic or reason in demonizing policies of any ideological bent. Americans shy away from the term “socialism” because they understand it as meaning state control of the economy, which is something reasonable people anywhere might find undesirable. Scandinavians understand the term differently. I see no point at all in debating what is or is not “socialism”, a better question is what blends of policy do or do not succeed under any given set of conditions. Loading policies down with the antiquated baggage of descriptions like “socialist”and “capitalist” does not advance that discussion.

            If they have to be something, the Nordic economies are, at root, capitalist, because the means of production, distribution, and exchange are privately owned and enjoy a high degree of freedom. This is the basic engine of the economy. The taxation and social services grafted onto that are an overlay on that basic engine… but again, those distinctions do not advance the discussion of the merits or demerits of any given policy. We don’t need to ask or know whether, for example, single-payer health care in the US would be “socialist”, we need to know what the costs and benefits would be relative to any other actual or proposed system. The terms “socialist” and “capitalist” are typically used to evoke reflexive emotional reactions, not to advance the policy discussion.

          • anotherneighborhoodactivist

            By saying Scandinavian countries are simply capitalist because the ownership of capital (the means of production etc) is “private” misses that ownership of capital in Scandinavia has higher percentages public and NGO/foundation ownership than elsewhere. And more importantly, there is more communal control, such as through workers councils in Germany.

            Since the mainstream definition of “socialism” is state ownership of the means of production, more communal “control” is an alternative to “ownership” to obtain similar objectives—the public welfare.

            I think it is more useful to view the socialist capitalist spectrum in terms of communal individualistic, and consider control as much as bare title ownership. I believe this perspective is consistent with the article author’s points. Also, with the maternal:paternal interpretation of liberal:conservative George Lakoff posits.

          • Steven Rogers

            Maternal:paternal? Surely you jest. That would show a quite stunning disregard for history. There seems to be a trend on the “progressive” side of the equation to define “socialism” generically as “that which we like”, and “capitalism” as “that which we dislike”, with an opposite trend emerging on the more conservative side. Unfortunately these non-definitions are vacuous, nebulous, and ultimately useless. We’re better ff just leaving these archaic terms in the dustbin where they belong and moving on to a more accurate discourse that fosters rather than obstructs understanding.

          • Giovanni Mangraviti

            If the “blends of policy working on given set of conditions” is not a disguise to fact there are political systems promoting a trend to increased income distribution and welfare much more intensively than others, I do not have any nomenclature problem. You can call one trend Fantasy Island and the reverse trend Utopia if you wish, particularly when the name “socialism” is still scaring people to death.

          • Steven Rogers

            “Capitalism” also scares people to death, just different people. The whole point is that there are not just two systems, and that these terms are used not to describe actual functioning systems but rarefied abstractions that do not and cannot exist in the real world. We need to stop thinking in binary terms and start thinking about a spectrum.

          • Giovanni Mangraviti

            Thanks for recalling the word “spectrum”, the idea pictures the exact point. From the dictionary, it is “a band of colors, as seen in a rainbow, produced by separation of the components of light by their different degrees of refraction according to wavelength”. Violet is in one side, Red is in the opposite side of the spectrum. Every visible color has indeed a very specific wavelength ,determined by your “blends of policy working on given set of conditions”. But this fact should not be used to blur the unarguably fact every color is either closer or farther to red. No brainer.

          • Steven Rogers

            You are still talking about “one” and “the other”, as if there were only two, which is absurd… and we’re not even talking about “political systems” here. Identical democratic political systems can be at radically different points on this spectrum, depending on the parties they elect to power. The political system hasn’t changed either way.

          • Giovanni Mangraviti

            Not quite so. First, there is no such thing like “identical democratic political system”. Second, I have never defended there are absolute positions, only relative ones. Absurd is denying that, when looking at two political systems, you can place one at the right of the other. Sometimes hardly, because they are very close by, if you have to compare Germany with the Netherlands, for example. These have very close “wavelengths”. Other times quite easily, as it is the case of Scandinavia and the US.

          • Steven Rogers

            You’re confusing systems with outcomes. There is nothing in, for example, the US political system that is inherently “right”, and there is nothing inherently “left” in the Swedish political. Those outcomes are defined by the voter preferences, not the political system. The US could elect a government to the left of Sweden tomorrow, just as the Swedes could elect a far right government. They wouldn’t, probably, but they could if they wanted to; the system wouldn’t stop them. The outcomes are defined by the political center of gravity in the voting public, which as we all know can change

            China and Saudi Arabia are hardly two ends of a spectrum; in fact they have a lot in common. Poor example, really.

            Comparison of policies is of course always valid and sometimes even useful, but trying to rank them on a crude right/left scale rarely accomplishes anything except to impose emotional baggage where it doesn’t help. Better to look at whether they are effective or ineffective.

          • Giovanni Mangraviti

            I do not understand why you insist saying I want to rank in a “crude right and left scale ” whereas I have clearly talked about relative positions, never absolute. In one answer you criticized my saying one is more socialist than the other, now you admit the Swedish could elect a government at the right of the US, implying they are in fact at left. Yes, the Swedish “could”, because they are free. Freedom is not only having the right to vote, but also the culture to see and analyze all alternatives. You certainly know the common American cannot even locate the US in a geografic global map, with no political borders, what could he know about the Swedish political system, and that’s the point of the original Disqs article. Yes, they could, and the “emotional baggage” related to such cultural transformation and awareness development of the outer world is exactly what scares people who are afraid this could result in a different voting way.

          • Giovanni Mangraviti

            I seems you purposely want to ignore that I have not tried “to
            rank them on a crude right/left scale”, since all my answers revolved around relative positions when comparing two systems. In a previous answer you simply rejected my mentioning that Scandinavia is at left of the US. Now you say “the US could elect a government to the left of Sweden tomorrow “, obviously accepting that, today, the US is at right of Sweden. Granted, sometimes plotting these relative positions is not easy when the “wavelengths” are quite similar, if you have to compare
            the Netherlands with Germany, for example. But in the case of the US and Sweden, the first is quite obviously at the right of the second, as shown by all indicators I presented before, so obvious to the point that even your answer now alludes to how this “could” be changed”. How far left, the perfect scale measurement, is beside the point. The
            real point is imbedded in your second statement, that “the Swedes could elect a far right government”. Yes, they could, because they are free. You have no complete freedom, however, when not having enough culture to access and assess all available global alternatives
            to support the “voter preference”. The common American cannot locate even its own country in a global geographic map with no political borders, that’s proven, what could he know about the Swedish system, and that is exactly the point of the original Disqus article. The curtain of smoke of those denying the Scandinavians have successfully adopted a political structure at the left of the US can only work to (purposely?) discourage the development of a better awareness about what really exists everywhere, not only in Cuba.

      • Andrew

        I think it’s then safe to say you don’t in fact know what it is.

        • Giovanni Mangraviti

          Well, if semantics is your problem, here goes The
          Cambridge Business English dictionary definition: “a set of political beliefs and principles supporting equal opportunities for everyone, under a fairly elected parliament”. It holds that society should be more concerned with meeting the needs of the public than providing a select few with large amounts of money. In other words, democratic socialism aims to create a society with less wealth inequality and more relationships that are equal between employees and employers. This means that big corporate bureaucracies should not control society. Rather, economic and social decisions should be made by those that are most affected by them. Democratic socialims suggests that the way to accomplish this is through regulations and tax incentives. Ideally, these would prompt companies to act in the best interest of the public and navigate away from exporting jobs to low-wage countries and away from environmental pollution. And all the above is summarized in my very first comment.

        • Giovanni Mangraviti

          It is safe to say what it isn’t: capitalism. And safe to say Norway is at left of the US by large.

  • Andy White

    The reasons why America hates “socialism” and looking after “society and the rights and needs of the masses” dates back to the period directly after the second world war and the following few decades. (And ties into an older philosophical struggle to define human nature and justify the elites.)

    in contemporary America the root of this can be traced back to Ayn Rand and her philosophy of objectivism and views on human nature.

    Ayn Rand hypothesized a mix of Nietzsche and Hobbes, from Frederick she took the concept of übermensch, and from Thomas she took the view that the masses were lazy, ignorant, brutish and not to be trusted. Her take on this was to claim that there were elite individuals on the planet (a minority of people) who were ment to rule and control the behaviour of everyone else.

    This idea infected both the LEFT and RIGHT of American politics and society….. this occurred as the cold war started (an ideological struggle between absolutist socialism – communism and democratic social capitalism). It is worth noting that in both America and the Soviet union the “rise” of a ruling minority class was reinforced against the notion of genuine socialism which is based on integrating the rights of the masses into society.

    BACK TO AMERICA. The first people to embrace Ayn Rand were the progressive liberals who went on to found the counter culture movement and then the hippy movement, they were the radicals and idealists who believed they were the übermensch – the enlightened few… this movement became the “progressive/neoliberal core” of the democratic party and the radical (regressive) left that believes the masses are sheeple, zombies or slaves in need of waking up.

    The other group went on to found the Chicago school of economics, laissez faire neo-liberalism and the neocon movement that overtook the GOP and republicans after the disgrace of Nixon. This movement believes the masses are lazy, work shy and takers.

    TO STRESS THE POINT…. the ideological and idealist elites in America seek to control the masses and bend them to their will.

    Socialism is about recognising and engaging with the needs and power of the masses as the driving point of power, it is about engaging with the public and their desire as opposed to ruling from in high… using either the carrot (democrats and liberals) or the the stick (republicans and conservatives).

    • Fred Bauer

      “Ayn Rand hypothesized … that there were elite individuals on the planet (a minority of people) who were ment to rule and control the behaviour of everyone else.”

      This is so, so, so, so, so, so, so, so, so very, very, very, very, very wrong.

  • Josh Phillips

    Couldn’t we stop dividing ourselves voluntarily, instead of, you know – be white? I hear a bunch of people say “we’re all Americans” and “ban all Muslims”… Oddly, it’s the same people.

    Teach children to not be as stupid and bigoted as the adults – problem solved. No whiteness necessary.

  • oldngrumpy

    One of the larger points you mentioned several times is taxation. When people feel that they contribute to spending they become more critical about what is being purchased and the question of deserving looms large. “I worked hard to get that money, so why should it go to you for not working?” This attitude becomes even more critical as economic insecurity grows in the population and people identify their tax payments with real sacrifices they have to make.

    How would this dynamic change if taxes weren’t considered a revenue source for spending? What if both had a purpose in the economy but they weren’t connected, or even if it was spending that funded taxation? I would like to think that it would be a consensus opinion that hungry people should be fed and sick people should be treated if the funding, or affording, was off the table for discussion. I don’t think many, especially politicians, would go on record for wanting people to be hungry or sick for their own sake. The most commonly used phrase in any discussion of social programs to benefit the general population is “How do you plan to pay for it?”. What if the question were made invalid completely? How would that change the dynamics of acceptability or favorability of spending on social programs?

    The fact is that we have been accepting gross mismanagement of our economy for decades because the rhetoric pushed by those we elected to manage it resonates with the reality we deal with in our personal financing and budgets. We have to “get” dollars before we can spend dollars and if we overextend our credit we can experience difficulty. The federal government, as the “issuer” of the currency, faces neither of those constraints. It creates the sovereign fiat currency by spending into the private sector to provision itself and to fund programs approved by Congress. It can never run out of currency, any more than a sports stadium can run out of points to award to teams, and can never fail to pay any obligation denominated in the currency it creates. This is not a pie in the sky plan for making the economy over, it is the structural reality of the system currently. It is simply how it works.

    There is no “national debt” that must be repaid with taxation, and anyone telling you differently is too inept or corrupt to hold office at the national level where budget and economic decisions are made. What is being presented to us as the “debt” is nothing more than an accurate accounting of currency that has been created and spent in the private sector to pay for government and hasn’t yet been extracted to pay taxes. To actually pay off that number via taxation would remove all currency from the economy and force the default of all private debt, as well as end the use of Treasury instruments. Spending by government creates currency and taxation destroys currency in the private sector. End of story. The difference between the two that is described as a deficit is what fuels the economy and if it isn’t sufficient to exceed the drains of wealth accumulation/savings and trade deficits the available currency supply will shrink, even if the number now mislabeled as debt grows.

    So, the next time you propose a program that would mitigate the very real suffering now taking place in this country and someone asks “How will you pay for it?” simply say “We just pay for it, like we do for war.”

  • pbillp65

    The problem is that taxes are supposed to be used to provide services to the general population. That is what governments are for, to provide services to the general population. When you cut the amount of income the government receives, you start the dominoes falling: first you cut services, then when you can’t cut services any more you borrow, then when you can’t borrow any more and you can’t raise taxes you are Puerto Rico, or Kansas, or Detroit, or Flint, or any one of a hundred cities across the United States. Until we the people, once again understand this fact, we will continue down the road to becoming a third world cess pool.

    • gcruse

      If you like your Venezuela, you can keep your Venezuela.

  • Ron Rankin

    the word socialism has been demonized by the republicans as communism that the ignorant believe it

    • gcruse

      How peculiar then that the Union of Soviet Socialist Republics named their communism as socialism. You think you know socialism better than real communists?

      • Tommy Leong

        hilariously enough, the Nazis were also called a socialist party, but it’s against communism!

        • Fred Bauer

          There’s a lot of intense fighting between flavors of socialism. The USSR would have nuked China were it not for Nixon. Nazi’s and Communists in Germany were fighting over who were the “true socialists.” There were basically no capitalists in any numbers in Germany then.

      • Giovanni Mangraviti

        Very simple: communism is a subset of socialism, like New Yorkers is a subset of Americans. You can say a New Yorker is an American, but you can’t generalize Americans are New Yorkers.

        • gvtops4

          While there are similarities to having government control of capitalism. The nation/state comparison doesn’t state the major differences between these systems, not so much on the government controls of unfettered capitalism, but in the social democracy control of the government by the people including input by business owners. In communism there has been less control by people and especially business owners. And with fascism also less control by people, but more control by business. If New York was portrayed as the latter two, it would have to be the dark, evil, failing state of the union.

      • Ron Rankin

        Socialism can turn into communism , but european style socialism is working just fine

  • Macrocompassion

    Socialism is based on the idea that equality of opportunity should be replaced by the greater sharing of produce. Instead of encouraging our chances of individual effort being more successful (which is a part of the American tradition), socialism tries to help the people who cannot or will not make a significant effort to help themselves. It is a trend to a communistic condition where the work is according to a person’s ability but the resulting enjoyment of the output is according to the perceived social need of same person or family. Such a philosophy of national participation is foreign to American thinking and behavior and naturally it causes hatred. And there is no doubt in my mind that America knows why it has this powerful urge to oppose this enforced equality.

    Unfortunately the consequences are not much better and there is still a serious need to make the equality of opportunity a replacement for our present means for unfair and unequal treatment of the ability to find our place within society and for many of its members to earn a decent wage. It is possible to rectify this situation by a tax reform, but a large lobby opposing this better sharing of opportunities is based on the ownership of the beast natural resources by a minority, which will not take a compassionate view toward fellow citizens and prefers to exploit the ownership of the land and other resources without giving compensation to those who don’t and are dependent on them. We need to tax land values instead of earnings and purchases and capital gains.

    Socially Just Taxation and Its Effects (17 listed)

    Our present complicated system
    for taxation is unfair and has many faults. The biggest problem is to arrange
    it on a socially just basis. Many companies employ their workers in various
    ways and pay them diversely. Since these companies are registered in different countries
    for a number of categories, the determination the criterion for a just tax system
    becomes impossible, particularly if based on a fair measure of human work-activity.
    So why try when there is a better means available, which is really a true and
    socially just method?

    Adam Smith (“Wealth of Nations”, 1776) says that land is one of the 3 factors
    of production (the other 2 being labor and durable capital goods). The
    usefulness of land is in the price that tenants pay as rent, for access rights to
    the particular site in question. Land is often considered as being a form of
    capital, since it is traded similarly to other durable capital goods items. However
    it is not actually man-made, so rightly it does not fall within this category.
    The land was originally a gift of nature (if not of God) for which all people
    should be free to share in its use. But its site-value greatly depends on
    location and is related to the community density in that region, as well as the
    natural resources such as rivers, minerals, animals or plants of specific use
    or beauty, when or after it is possible
    to reach them. Consequently, most of the land value is created by man within
    his society and therefore its advantage should logically and ethically be
    returned to the community for its general use, as explained by Martin Adams (in
    “LAND”, 2015).

    However, due to our existing laws, land is owned and formally registered and its
    value is traded, even though it can’t be moved to another place, like other
    kinds of capital goods. This right of ownership gives the landlord a big
    advantage over the rest of the community because he determines how it may be
    used, or if it is to be held out of use, until the city grows and the site
    becomes more valuable. Thus speculation in land values is encouraged by the law,
    in treating a site of land as personal or private property—as if it were an
    item of capital goods, although it is not (Mason Gaffney and Fred Harrison:
    “The Corruption of Economics”, 2005).

    Regarding taxation and local community spending, the municipal taxes we pay are
    partly used for improving the infrastructure. This means that the land becomes
    more useful and valuable without the landlord doing anything—he/she will always
    benefit from our present tax regime. This also applies when the status of unused
    land is upgraded and it becomes fit for community development. Then when this
    news is leaked, after landlords and banks corruptly pay for this information,
    speculation in land values is rife. There are many advantages if the land
    values were taxed instead of the many different kinds of production-based
    activities such as earnings, purchases, capital gains, home and foreign company
    investments, etc., (with all their regulations, complications and loop-holes).
    The only people due to lose from this are those who exploit the growing values
    of the land over the past years, when “mere” land ownership confers a financial
    benefit, without the owner doing a scrap of work. Consequently, for a truly
    socially just kind of taxation to apply there can only be one
    method–Land-Value Taxation.

    Consider how land becomes
    valuable. New settlers in a region begin to specialize and this improves their
    efficiency in producing specific goods. The central land is the most valuable
    due to easy availability and least transport needed. This distribution in land
    values is created by the community and (after an initial start), not by the
    natural resources. As the city expands, speculators in land values will
    deliberately hold potentially useful sites out of use, until planning and
    development have permitted their values to grow. Meanwhile there is fierce
    competition for access to the most suitable sites for housing, agriculture and
    manufacturing industries. The limited availability of useful land means that the
    high rents paid by tenants make their residence more costly and the provision
    of goods and services more expensive. It also creates unemployment, causing
    wages to be lowered by the monopolists, who control the big producing
    organizations, and whose land was already obtained when it was cheap. Consequently
    this basic structure of our current macroeconomics system, works to limit
    opportunity and to create poverty, see above reference.

    The most basic cause of our continuing poverty is the lack of properly paid
    work and the reason for this is the lack of opportunity of access to the land
    on which the work must be done. The useful land is monopolized by a landlord
    who either holds it out of use (for speculation in its rising value), or
    charges the tenant heavily for its right of access. In the case when the
    landlord is also the producer, he/she has a monopolistic control of the land
    and of the produce too, and can charge more for this access right than what an
    entrepreneur, who seeks greater opportunity, normally would be able to afford.

    A wise and sensible government would recognize that this problem derives from
    lack of opportunity to work and earn. It can be solved by the use of a tax
    system which encourages the proper use of land and which stops penalizing
    everything and everybody else. Such a tax system was proposed 136 years ago by
    Henry George, a (North) American economist, but somehow most macro-economists
    seem never to have heard of him, in common with a whole lot of other experts.
    (I would guess that they don’t want to know, which is worse!) In “Progress and
    Poverty” 1879, Henry George proposed a single tax on land values without other
    kinds of tax on produce, services, capital gains etc. This regime of land value
    tax (LVT) has 17 features which benefit almost everyone in the economy, except
    for landlords and banks, who/which do nothing productive and find that land
    dominance has its own reward.

    17 Aspects of LVT Affecting Government, Land Owners, Communities and

    Four Aspects for Government:

    1. LVT, adds to the national
    income as do other taxation systems, but it replaces them.

    2. The cost of collecting the LVT is less than for all of the production-related
    taxes–tax avoidance becomes impossible because the sites are visible to all.

    3. Consumers pay less for their
    purchases due to lower production costs (see below). This creates greater
    satisfaction with the management of national affairs.

    4. The national economy
    stabilizes—it no longer experiences the 18 year business boom/bust cycle, due
    to periodic speculation in land values (see below).

    Six Aspects Affecting Land Owners:

    5. LVT is progressive–owners of
    the most potentially productive sites pay the most tax.

    6. The land owner pays his LVT regardless of how his site is used. A large
    proportion of the ground-rent from tenants becomes the LVT, with the result
    that land has less sales-value but a significant “rental”-value (even
    when it is not used).

    7. LVT stops speculation in land prices and
    the withholding of land from proper use is not worthwhile.

    8. The introduction of LVT initially reduces the sales price of sites, even
    though their rental value can still grow over a longer term. As more sites
    become available, the competition for them is less fierce.

    9. With LVT, land owners are unable to pass the tax on to their tenants as rent
    hikes, due to the reduced competition for access to the additional sites that
    come into use.

    10. With LVT, land prices will
    initially drop. Speculators in land values will want to foreclose on their
    mortgages and withdraw their money for reinvestment. Therefore LVT should be
    introduced gradually, to allow these speculators sufficient time to transfer
    their money to company-shares etc., and simultaneously to meet the increased
    demand for produce (see below).

    Three Aspects Regarding Communities:

    11. With LVT, there is an
    incentive to use land for production or residence, rather than it being unused.

    12. With LVT, greater working opportunities exist due to cheaper land and a
    greater number of available sites. Consumer goods become cheaper too, because
    entrepreneurs have less difficulty in starting-up their businesses and because
    they pay less ground-rent–demand grows, unemployment decreases.

    13. Investment money is withdrawn from land and placed in durable capital
    goods. This means more advances in technology and cheaper goods too.

    Four Aspects About Ethics:

    14. The collection of taxes from
    productive effort and commerce is socially unjust. LVT replaces this extortion
    by gathering the surplus rental income, which comes without any exertion from
    the land owner or by the banks–LVT is a natural system of national income-gathering.

    15. Bribery and corruption on information
    about land cease. Before, this was due
    to the leaking of news of municipal plans for housing and industrial
    development, causing shock-waves in local land prices (and municipal workers’ and
    lawyers’ bank balances).

    16. The improved use of the more
    central land reduces the environmental damage due to a) unused sites
    being dumping-grounds, and b) the smaller amount of fossil-fuel use, when
    traveling between home and workplace.

    17. Because the LVT eliminates
    the advantage that landlords currently hold over our society, LVT provides a
    greater equality of opportunity to earn a living. Entrepreneurs can operate in
    a natural way– to provide more jobs. Then earnings will correspond to the
    value that the labor puts into the product or service. Consequently, after LVT
    has been properly introduced it will eliminate poverty and improve business


  • Fred Bauer

    Any discussion of socialism always gets mired in conflicting definitions of socialism. What is real socialism? The USSR? Cuba? Venezuela? Somalia? Plymouth Colony? But at the end of the day, they all have the same structural flaw: the lack of incentive to produce or conserve. It’s the economic equivalent to a perpetual motion machine: millions of watts of output with dozens of watts of input. Socialism violates the laws of economics the same way perpetual motion machines violate the laws of thermodynamics: work out can’t exceed energy in and consumption cannot exceed production. The great socialists (Stalin, Castro, Chavez, Siad Barre, etc.) have brought misery, despair, and death to millions while the residents of capitalist countries have seen the standard of living rise and rise. You can certainly say that Americans hate socialism but you cannot seriously question why.

    • Andrea Conner

      And you think that capitalism has the incentive to conserve? conserve what is the issue.. They want to conserve how much they spend on labor and infrastructure but they want to maximize what they produce.. What capitalism has a problem with is that it will eventually bleed itself dry and collapse the system that feeds it.. It worked great for the few and works best for those few when you had slave labor… now you have to pay people and it’s a race to the bottom of how much they HAVE TO PAY.. they move out to lower wage economies or automation and the price doesn’t lower really because our dollar is worth less (which hurts our ability to buy the stuff which banks LOVE because now we are in debt).. the bubble of debt always will burst and those that are hurt are the working class because they also now become the poor.. when the income gap is large it is always a sign of disaster coming for the majority but not for the few because they don’t lose as much and then they can gather more for less and the system starts again..

      • Fred Bauer

        It seems to me that debt bubbles were not nearly as bad before the government took over banking. Under a profit motive banks wouldn’t lend more than they thought the debtors could pay back. Now that banking is nearly completely socialized it’s, “No money down? No problem! You want a 35 year mortgage? No Problem! Too much debt to income? No problem! The taxpayers will back the loan!” Do you ever worry about your losing your deposit because the bank made a bunch of bad loans? No. They’ll get bailed out. Socialized banking is as just bad as socialized education, medicine, oil, etc.

        • Andrea Conner

          That is not socialism that is cronies capitalism.. Privatize the profit and socialized the debt. Say with healthcare if you have socialized healthcare you would focus on saving money by actually keeping people healthy so they don’t use need the service.. Now they profit by you being sick.. That is sick care not’s profit driven.. Right now my taxes go to so little that benefits me.. Tbe military spending is put of control.. They want to use my tax money to make corporations right with inflated contracts..there is no accountability because they don’t provide accountability and whistle blowers are demonized.. Lobbying has to go and they need to public fund elections letting in 3rd and 4th parties.. Right now our government answers to bought positions of industry not the public..that is not socialism that is a corpratocracy. Or Oligarchy.

          • Fred Bauer

            It’s not free market capitalism, either. You want big government to fix the problems caused by big government.

          • Andrea Conner

            No I want government to be there to help people where capitalism fails.. And my tax money to go toward things that help the masses not just the few and corporate welfare.. It is apparent we see the world different and what government should be. The closest we have ever had to pure capitalism and free market is the gilded age.. That was great for a few and horrid for the laboeres and slaves..

  • McBain

    I think you hit the nail on the head. Americans hate socialism because they have no clue as to what socialism is. You have now clue as to what socialism is, you like it because you think it’s government programs to help the poor. Other people don’t like it because they think it’s government control of their lives and the economy.

    Neither of you are right, socialism is an economic system where the economy is controlled collectively and democratically. It’s about who owns the corporations, banks and government.

    Americans would probably like socialism if they knew that that is what socialism was. Your socialism is social programs in a liberal government.

    • Edwin Alexander

      HAHAHAHA If it so GREAT how come more Countries do not have it?

      • McBain

        For those answers you have to go to Langley

  • 1: American (North-Latin-South) ($): 2: BSR (British Ireland/Scandinavia/Russia) (£): 3: EUAF (EUROPE AFRICA) (€): 4: AIOP (Arab India Oceania Pacific) (¢) (Arabia ¢/€) :::::::

    4: AIOP: China Korea Japan Philippine Australia Zealand Thailand Indonesia Malaysia Phillies Cambodia Vietnam Myanmar India Arabic Israel Palestinian Jordan Turkey Iraq Iran Syria Lebanese:::::

  • Patrick Cardiff

    I’m sorry, is it me? I searched this document over and over to find the author’s definition of “social trust” and I failed. How can you parameterize and then graph, and then include an R-squared statistic!, and then infer about, something that is so diffuse as “social trust”? Am I just supposed to believe that “social trust” has hard numeric meaning on its own? Gimme a break!