Sunday 8 July 2012

American Socialism

D.L.L. Parry writes:

One of the most common ways to demonise even moderately progressive reforms in the USA is to call them ‘socialist’ – but why should such reforms be seen as socialist, and why would that make them bad? Two main reasons stand out: first, they often involve spending ‘tax dollars’, in other words taking money from one group of people and giving it to another; secondly, they involve government regulation and intervention, which is believed to infringe personal freedom. Yet redistribution and regulation can be found in many aspects of life in the USA, including three examples that are never labelled ‘socialist’, namely sports, company towns, and the military.

To start with sport, American football is more heavily regulated than European soccer through rules that help to create the proverbial ‘level playing field’ such as a limit on the total salaries paid to all players in a team and a draft system whereby the worst teams get the first pick of players emerging from college. And it works: the last ten Superbowls have been won by seven different teams, making American football far more competitive on the field than the major European soccer leagues by limiting financial competition off it.

The company town was a distinctive feature of America’s economic development in the late nineteenth and early twentieth centuries. While such towns also existed in Europe, they were much more common in the USA because America industrialised faster and in a much less populated continent; according to Hardy Green in The Company Town, there were more than 2,500 such places at their peak, housing 3% of the country’s population. In these towns, strict regulation and infringement of personal freedom were enforced by employers, not by government. While some of these towns had decent working and living conditions, the opposite was more common, especially when towns were hundreds of miles from alternative employment.

There was plenty of redistribution of income too, this time from a company’s workers to its owners: wages were largely spent on rent for company housing and on buying food in company shops. The Commission on Industrial Relations (1913-15) remarked that company towns showed ‘every aspect of feudalism except the recognition of special duties on the part of the employer.’ Like the socialist states of Cold War Eastern Europe, employers used spies and physical force to control their populations.

Many of the largest company towns in the USA today are military ones (Fort Benning in Georgia is home to about 120,000 soldiers, family members, civilian employees and retirees), and the US armed forces can be seen as a third example of American socialism. While European welfare states are condemned for their supposedly debilitating ‘cradle-to-grave’ care, the military has created a closed society that is replicated bases around the world.

In American Dreams, Studs Terkel quoted a woman who had grown up on these bases: ‘When you’re an army brat, it means your entire environment is conditioned by much more than what your father does for a living. You grow up in a total institution. I always thought of it as being like a circus child, there are many second- and third-generation military families. Every need is taken care of and you’re not expected to ever leave.’

The military is of course funded by tax dollars, and plenty of them. The Department of Defense budget for 2012 is estimated at $666 billion, or 4.4% of gross domestic product, while the total defence budget for 2012 exceeds $950 billion when adding expenditure such as veterans’ affairs, homeland security, nuclear defence and foreign military aid. This represents a huge redistribution of wealth from taxpayers to members of the armed forces and to military suppliers.

Evidently America’s football clubs, company towns and armed forces are not socialist. The point is that redistribution and regulation exist in many forms of American life; they can be highly successful or they can be abused; they can serve the country as a whole or they can serve the interests of a few. For the 1% can be ‘socialist’ too, when it suits them.

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