In 2015, a United States senator from Vermont named Bernie Sanders sparked a nationwide debate over a new term: democratic socialism. While running for the Democratic presidential nomination, Sanders did not renounce the term “socialism” after critics used it to address his proposal of single-payer healthcare reform. While many older voters in the United States linked the term “socialism” with authoritarian regimes like the Soviet Union, “Red China,” Cuba, and North Korea, voters who had come of age after the Cold War had a less negative association with the term. Sanders argued that “democratic socialism” was what citizens of wealthy nations in Europe, especially the Scandinavian countries, enjoyed. How do the two models of “socialism” compare?
Setting the Stage: Defining Socialism
Few charges would be considered “fighting words” in American politics as effectively as the word “socialist.” While younger voters may have little emotional response to the word, those who came of age before the late 1980s (during the Cold War) may still associate “socialism” with the USSR and its rigid, centrally-planned economy. Socialism itself is a difficult term to define, with many disagreements among those who consider themselves socialists. Traditionally, socialism means government control of the means of production. This classic definition goes all the way back to Karl Marx and his Communist Manifesto of 1848, which was a negative critique of capitalism.
Between 1917, when the Communist Revolution began in Russia, and the collapse of the resulting Soviet Union in 1991, socialism was used to describe centrally-planned economies where the government determined all major production. Prior to some reforms in the mid-1980s, the Soviet government owned all factories and large-scale agriculture. Since the collapse of the USSR, only North Korea and Cuba remain seen as traditional socialist states where the government controls the production of consumer goods. Cuba, however, has implemented some free-market reforms in recent years.
Setting the Stage: Social Security & Welfare Reforms
Government ownership of production in terms of goods is no longer common, but government control of services like health care and education could be considered socialistic. Ironically, government-run health care and pension programs hearken back to the 1880s in Europe and were an attempt to prevent the rise of Karl Marx’s socialism. German leader Otto von Bismarck created “Europe’s first modern welfare state” in an attempt to stem the popularity of socialism…by providing the benefits of socialism. Thus, Bismarck created an alternative to traditional socialism by creating a hybrid through redistribution of wealth. The government did not own the medical clinics or farms to provide medical care and food but redistributed tax revenue to allow citizens to pay for these things.
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In Europe and the United States, social welfare programs began emerging in the early 1900s. These programs were very limited in scope prior to the Great Depression and typically only provided aid to the injured, elderly, or completely destitute. Germany, by contrast, continued Bismarck’s reforms and added unemployment insurance in 1927. Reformers during this era were often accused of being socialists, though this did not seem to hurt their popularity with voters who were struggling economically.
1917 – early 1980s: Authoritarian Socialism
While the West created socialist reforms in a piecemeal fashion, beginning with Bismarck’s reforms in the 1880s, the Communist Revolution in Russia created a system of pure socialism by the end of the Russian Civil War in 1922. Far surpassing social welfare programs, the new Soviet Union used central planning to direct economic production. The State Planning Committee (Gosplan) created five-year plans that set production goals for all types of goods and services. This system was criticized for being slow to adapt, inefficient, and overly focused on heavy industry instead of consumer goods.
Without market forces, where consumer demand dictates what is produced and sold at certain prices, the state was responsible for making adjustments to production levels. This resulted in the misallocation of resources, with factories producing too much of certain items, which were not in high demand by the public, and too little of others, causing shortages. By the early 1970s, Gosplan was criticized for its inefficiency. The period from the early 1970s to the early 1980s is often called the Brezhnev Stagnation, named for then-premier Leonid Brezhnev, due to the significant slowing of Soviet economic growth. The central planning of the command economy, controlled by the government, had failed to create the desired “socialist utopia.”
1978 – Present: Market Reforms & State Capitalism
Many leaders in both the Soviet Union and China – then often known as “Red China” due to its communist government – realized that the lack of flexibility caused by central planning was slowing economic growth behind that enjoyed by the West. By 1965, the state controlled over 90 percent of industrial production in China. In the Soviet Union, state production was officially the entire GDP, although homemade goods and services were known to exist unofficially. In late 1978, China opened itself to foreign investment and market reforms under new premier Deng Xiaoping, and in 1985 the Soviet Union itself began to implement market reforms under new premier Mikhail Gorbachev.
Although the Soviet Union collapsed in 1991 and the new Russia (and other former Soviet republics) underwent a “shock” transition from socialism to capitalism, and China opened itself up to Western investment and products, state control of production re-emerged under a new banner: state capitalism. After an economic crisis in the late 1990s, the Russian government took control of increasingly large stakes in corporations to ensure their stability. Some became “state monopolies” where, although the corporation looked like a typical Western corporation, all or most shares were owned by the government. The situation is similar in China, where state-owned enterprises (SOE) control a substantial portion of all production. Thus, arguably, socialism is still prevalent in Russia and China but under a different, more Western-friendly guise.
Western Europe & “Democratic Socialism”
After the collapse of the Soviet Union, the rise of progressive politics in the United States has brought about renewed charges of “socialism,” similar to what was leveled at Otto von Bismarck, Franklin D. Roosevelt, and Harry S. Truman. In 1961, future Republican president Ronald Reagan even criticized the proposal of Medicare as “socialized medicine.” Therefore, it is clear that what counts as “socialism” is largely in the eye of the beholder. In 2015, the sudden rise of progressive presidential candidate Bernie Sanders, a left-leaning independent US Senator from Vermont, introduced the term “democratic socialism” to the American political lexicon.
When Sanders’ proposal of single-payer healthcare was socialist, he did not disavow the term. Instead, he adopted the term “democratic socialism” and pointed out that he wanted the US to evolve its welfare system toward those of democratic states in Western and Northern Europe (rather than “authoritarian socialism” as seen in North Korea, Cuba, Venezuela, and the former Soviet Union). This prompted a debate over whether Sanders’ idealized nations, notably Sweden, Norway, and Denmark, were actually socialist. Critics argue that these “democratic socialist” nations have actually decreased their share of government spending since 1980.
Separating Political & Economic Systems
Can a democratic nation be socialist? During the Cold War, many casual observers often combined political and economic systems into one general idea of “capitalist” or “communist.” However, the two systems are separate. Indeed, during the Cold War, there were authoritarian regimes that were capitalist. Examples include South Korea, Taiwan, and Singapore. These nations had authoritarian political systems but allowed private ownership of capital (factories) and foreign investment. Thus, capitalism is not always linked to democracy.
Debate remains over whether true democracies like those in Western and Northern Europe are actually socialist, with many referring to the Scandinavian countries as “social democracies” rather than democratic socialism. These nations have democratic governments but high levels of social welfare spending. However, the “golden age” of democratic socialism allegedly ended by the early 1970s, when high costs of social welfare programs began to slow economic growth. Regardless of the debate over how socialist Scandinavia truly is, history shows that states can have democratic governments and socialist economic systems.
China: Market Reforms but Communist Governing Monopoly
The most prominent modern example of a largely market economy coupled with an authoritarian government is China. Some actually credit China’s rapid economic growth since the 1990s to its strict Communist government. Like the Soviet Union before it, China’s ruling Communist party does not allow other political parties to compete for power. However, unlike the Soviet Union, the Chinese government has actively encouraged foreign investment. Therefore, although the influx of foreign brands and private companies may make China look like a Western democracy at the street level, its government remains strictly authoritarian.
Today, China’s economy is a mix of government-owned and privately-owned companies. Officially, the state currently controls about 60 percent of China’s production, while the private sector controls about 40 percent. Other estimates credit the private sector with the majority of China’s economic growth, especially in new jobs created. A willingness to crack down quickly on private businesses that run afoul of the wishes of China’s government, especially in the tech industry, may help stave off demands for political reforms. Although China’s government may directly own less production than it did prior to the 1990s, its aggressiveness in terms of regulation may give it a similar level of control to the pre-1990s era.
The Single-Payer Healthcare Debate
So, would implementing Medicare-for-All in the United States, as proposed by democratic socialist Bernie Sanders, be socialist? If so, would it be traditionally (authoritarian) socialist or democratically socialist? Arguably, the expansion of existing Medicare, which is available to all Americans age 65 or older, is not socialist because the government would not own the means of production. The doctors are employed by private entities and accept Medicare along with other health insurance programs. US doctors are not required to accept Medicare, further weakening the argument that Medicare-for-All would be socialist.
Although many politicians, including Republicans, currently support entitlements like Social Security and Medicare, open support for Medicare-for-All has been largely limited to progressives. As of 2022, however, fifteen US Senators are in support of the proposal, a rapid increase from the modern introduction of the idea in 2015 by Bernie Sanders. Critics calling the proposal “socialized medicine” often argue that expanding Medicare to all US residents would result in far greater government control than currently exists. Expanding Medicare to all Americans may indeed require the government to exercise more ownership of healthcare, such as creating community health clinics.
Local Example of Democratic Socialism in the United States: School Boards
Fear of government ownership of a vital service may be overblown in the United States, given that the government’s control of over 90 percent of K-12 education is rarely considered socialism. Attending public school means learning in state-owned buildings and being taught by government employees. The official legislatures of school districts, the board of education, are democratically elected at the district and state levels. This creates de jure (by law) the situation of democratic socialism. The local community elects a legislature to provide a public service that is available to all residents free of charge, paid for by tax revenue.
Although most observers would admit upon questioning that America’s public schools are indeed socialist, this has not removed the stigma from the political term. The past few years have seen a swift resurgence of political battles regarding public education, particularly the charge that liberal teachers are indoctrinating students. This has led to some states seeking to pass reforms guaranteeing more government and parent oversight of public schools. Critics of these conservative reforms, popular with many Republicans, argue that they are unnecessary and are an attempt to win attention in America’s “culture wars.”
Summary: A Sliding Scale of Socialism
Authoritarian socialism and democratic socialism both exist but on a diverse spectrum rather than easily separated endpoints. North Korea still exists as a relic of Soviet-style central planning, with a completely authoritarian government and an economy almost completely controlled by the state. European states like Britain and the Scandinavian countries offer single-payer healthcare and many other generous welfare programs to residents. They have democratic governments but substantial state control over services like healthcare and education.
The existence of public schools, Social Security, and Medicare implies that even the United States exists on a spectrum of socialism. Indeed, few developed countries have few or no socialist institutions, as most have public schools and various pension and welfare programs. Much of the debate over socialism, however, ignores “pure socialism” of government ownership of the means of production and lumps government regulations, subsidies, and stimulus spending under the general umbrella of socialism. Like beauty itself, socialism almost entirely exists in the eye of the beholder, which makes it such a potent political epithet in the West.