Up for Today: Social Democracy/Democratic Socialism
Part Three of a Four-Part Series on Choosing a Socio-Economic System for America
First, A Note on Afghanistan
Several people have asked me if this space will address what has happened in Afghanistan. The answer is yes, but not just yet. This one has a couple of personal connections for me, and I am going to take a little time sorting them out.
In addition, there is a lot of information coming in – some of it dubious. Some of it important – that also needs to settle out. For now, I hope we can concentrate on trying to help those who tried to help us. Time enough later for a postmortem.
Now, back to the task at hand.
What the Heck is Social Democracy/Democratic Socialism Anyway?
We started this little review and exploration of systems with capitalism and followed that with socialism. This time around, its Social Democracy, something of a new kid on the block compared to the other two.
Referring to our vehicle analogy for evaluating these systems, this one, as with the others, has an interesting mix of attributes and shortcomings.
Again, Let’s Start with the Terminology
We noted in the last posting that socio-economic systems are prone to improper definitions. This is certainly the case with Social Democracy, as it has two camps carrying its banner. The envisioned end states for the two camps are quite different. In fact, the division even applies to the basic name of the concept.
One camp, the older of the two, sees this as an effort to blend socialism with capitalism, as a transition model, seeking to end up with a socialist system. There are people around the world that would consider themselves part of this cohort, including a not small number of people in the USA. Nevertheless, this strikes me as a dead end. They often describe their version as Democratic Socialism.
The other camp, usually referring to their concept as Social Democracy, sometimes as Capitalism with a Hear. They tend to see capitalism as the economic engine of choice, but only when it is harnessed to a national consensus on what should be provided to everyone to ensure a reasonable quality of life.
This essential list usually includes comprehensive medical care, food security, decent housing, and education up through college or high-level skills certification, among other elements.
This is the approach that most of the rest of this posting will address. The most common accurate examples of this approach reside in the Scandinavian countries.
What Does Social Democracy Do Well?
Probably the strongest quality of social democracy is that it recognizes the strengths and weaknesses of the other two systems and seeks to draw on the strengths of each. It seeks a national standard for quality of life and puts in place taxation and administration to make that happen.
But it also bases the economic power of the system on capitalism, drawing on individual initiative and freedom to choose. Pretty well all the means of production are privately owned, although many are more regulated than Americans may be accustomed to seeing.
Using our vehicle analogy, this system seems to work hardest on having a comprehensive features list: strong engine, lots of safety features, good steering, and an agreed upon route in the GPS. Easier said than done, all that, but that is the plan.
Polls consistently show that most citizens who live under such a system think it has the tradeoffs about right, although governments and populations may tack more left or right or back again over time.
People readily acknowledge that they pay much more in taxes and fees than others might, but they seem to think it a fair tradeoff to minimize discrepancies and variables that would otherwise wipe out families’ futures due to things like medical costs. The terms one hears the most from such countries are “balance” and “reasonable tradeoffs.”
Where are the Problems?
There are two that are most important.
One is the division over what the end state is to be. Even though many younger Americans think socialism per se does not sound so bad, any substantial indication that this is the direction sought will likely be a nonstarter.
Being clear that something like the Scandinavian model is the goal, building national consensus and fueling it with an appropriately guided and moderated free enterprise system, is essential.
Unfortunately, the ability to have rational national dialogues on something this important and complex is not our strong suit. Remember the early “discussions” about medical coverage in the first Clinton administration? They made the food fights in a John Belushi movie look like model behavior.
Our best shot on this front is to forego long, complex discussions of theory and focus in on specific approaches in specific areas. Show people what a sector end state looks like and costs, compared with what they are stuck with now.
The other primary challenge is actually doing the transitions. The question of a national health care policy is perhaps the best example of how hard this is to design and carry out. People rightly worry about costs, corruption, transparency, and quality.
My brain boils over thinking about how to get this done for health care, with all its complexities and stake holders. Doing some of this by regions rather than all at once, and with demonstration projects, seems the way to go. Otherwise, we are likely to get lost in weeds.
So, Is Social Democracy the Solution?
It could be. The goldilocks nature of this approach, drawing on the strengths of other systems while cancelling out many of their shortcomings, has promise. It is not hard to make the case on economic or social grounds.
Making the case politically is more of a challenge. Social democracy might be able to carry the day if it can make most people feel like stakeholders in what develops. Fail at this and it will not matter how good a system it might be functionally – we will not get there.
OK, we took a really high-level look at The Big Three choices out there. In our next session, we will add up the scores and make a call. We go into this seeing the pros and cons of all three choices. None are perfect. Some adapt and change better than others. All carry political and social baggage.
Get this one right and the future is brighter than it would be otherwise. Get it wrong and we all will pay serious penalties. And let us remember, that this all takes place within a constantly shifting world political, economic, and ecological framework. No pressure, right?
Some Light Reading to Illuminate Our Thinking
I encourage you to look up Capitalism with a Heart online – there are a ton of good, thoughtful articles under that heading, including from leaders in the American business community.
If you are interested in doing a bit of short reading on this topic, as noted there are lots of sources out there. Here are few that are short but I think lay it out well:
- Capitalism, But with a Little Heart:
- Which is the Best Market Model?
- Yes, Contemporary Capitalism can be Compatible with Liberal Democracy. (Brookings has 3 good articles on this in May, Sep, and OCT of 2019)
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