Adam Smith, the philosophical father of modern capitalism, may have been Scottish, but his ideas have long found their muse in America. Smith’s “voice has been ringing in the world’s ears for sixty years”, wrote one observer in 1838, “but it is only in the United States that he is listened to, reverenced, and followed.”
Yet today the US is shifting, perhaps inexorably, in the precise opposite direction towards an embrace of socialism. In the current race for the Democratic presidential nomination Vermont Senator Bernie Sanders, a self described “democratic socialist”, has, according to CNN, taken the national lead – though billionaire Mike Bloomberg has managed to buy his way into second place, perhaps through sheer weight of money and name recognition.
Paired with fellow progressive, Massachusetts Senator Elizabeth Warren, the party’s “red” bloc represents upward to 50 per cent of the party’s electorate, according to an average of polls by Real Clear Politics. To put this in perspective, these numbers are far higher than those enjoyed by President Donald Trump on his romp to the Republican nomination in 2016.
Show Me the Money
The new socialism represents, like Trumpian populism, a response to such phenomena as globalization, the rising power of finance and technological change. Around the high-income world, including in the US, these forces have helped nurture an economy where the share of the wealth owned by the top one per cent of earners since 1980 doubled to nearly 40 per cent. The biggest winners have been the upper 0.0001 per cent, whose incomes soared during this period by 600 per cent while middle- and working-class wages stagnated.
Democrats often neglect to acknowledge this trend accelerated under the “progressive” Barack Obama administration, which imposed regulatory restraints on energy, manufacturing and other blue-collar sectors while embracing the agenda of Wall Street and their allied tech oligarch firms. Both Sanders, in his 2016 race against Hillary Clinton, as well as Donald Trump, essentially ran against this highly disparate economy.
Trump’s election changed the regulatory environment and, now, for the first time in decades, wages are currently rising faster for blue collar workers than for the upper echelons. Yet even so, the reality of most working families, burdened by rising costs and decades of stagnating incomes, remain precarious. Nearly 44 per cent of American workers aged 18 to 64 can barely make ends meet, according to a recent Brookings report.
A New Red Demography?
The precarious nature of the “new” American economy is felt most deeply by young voters, a strong plurality of whom now favor Sanders. Millennials, the generation born after 1982, have been lagging behind their parents’ generations’ path to upward mobility ever since the Great Recession and this has not changed. Most people under 40, according to a recent Brookings study, are unlikely to do as well in their lifetime than their Baby Boomer or Generation X parents. Similar patterns can be seen in Australia, France and the UK, where far-left candidates have done very well among the young.
Bolstered through instruction by neo-Marxist academics, this generation knows little or nothing about the tragic trajectory of the Soviet Union or Mao’s murderous regime. Support for capitalism among Millennials and Generation Z, the new generation arising after 2000, has dropped from 66 per cent in 2010 to barely 51 per cent today, notes Gallup. In contrast, older generations — many of whom witnessed the massive failures of Communist states — still favor free enterprise by two to one.
Sanders’ redistributionist policies are also gaining support among ethnic minorities, a growing portion of the US population. Support among Hispanics is a key source of his current California lead. Many are part of the “working poor” and are attracted to notions of income redistribution and greater labor protections. Sanders also commands the largest Latino shares of voters in key states like Nevada, Texas and North Carolina.
Remarkably, socialism is gaining adherents even in the upper middle-class and among the oligarchy. One critical component lies in detestation of all things Trump even among CEOs, most of whom, according to a recent Chief Executive survey, want him impeached. Corporate America is increasingly embracing the notion of a guaranteed income and is adopting politically correct positions on such things as immigration, particularly in tech and on Wall Street.
But the most important driver for socialism comes from the burgeoning green movement. Long dominated by the elite classes, environmentalists are openly showing themselves as watermelons — green on the outside, red on the inside. For example, the so called “Green New Deal” — embraced by Sanders, Warren and numerous oligarchs — represents, its author Saikat Chakrabarti suggests, not so much a climate as “a how-do-you-change-the entire-economy thing”. Increasingly greens look at powerful government not to grow the economy, but to slow it down, eliminating highly paid blue-collar jobs in fields like manufacturing and energy. The call to provide subsidies and make work jobs appeals to greens worried about blowback from displaced workers and communities.
Combined with the confused and vacillating nature of our business elites, and the economic stagnation felt by many Americans, socialism in the West is on the rise. An ideology that history would seem to have consigned to Leon Trotsky’s “dustbin of history”, could turn the land that once embraced Adam Smith closer to the vision of Karl Marx.
This piece first appeared in the Daily Telegraph.
Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for the Center for Opportunity Urbanism. His last book was The Human City: Urbanism for the Rest of Us (Agate, 2017). His next book, The Coming of Neo-Feudalism: A Warning to the Global Middle Class, is now available to preorder. You can follow him on Twitter @joelkotkin