Question for everybody... (Representatives, unemployment, Congressmen, minimum wage)

[fishmonger]

Greetings captains. As a non-socialist but pretty left-leaning American I have decided to post some notes I made on what a "democratic socialist" system in America might look like, in order to invite disparaging remarks and criticisms to help me discern whether or not democratic socialism is actually a terrible idea or not, because I'm undecided myself.

Not being an economist or even a political science major, I have decided to lay out an incredibly rough and very likely error-riddled description of what I think an ideal socialist system might look like if it were implemented, with the goal of destroying poverty, reducing crime, inequity, etc., and increasing democracy by taking political power away from those wealthy enough to buy congressmen.

"Democratic Socialism:

Problems: Poverty, needs not being met for everyone

Policies:

Production:

Nationalize and expand all major industries that are suited for U.S. production…enough to where low-skilled but moderate pay jobs are available for everyone

Pay for with taxes, tarriffs & consumption of produced goods,

Small businesses remain in the private sector.

Luxury, entertainment industries, industries that are not as suitable for U.S. production remain in the private sector.

Enact tariffs on products related to national industry to encourage buying home-made products; no tariffs on products that can’t be adequately produced here

Incentive pay for higher productivity in national industries,

Consumption:

Enact price controls on all necessities and non-luxury items,

Make unemployment benefits good enough to remove poverty but small enough to encourage minimum-wage employment,

Ideal Effects:

Full employment, all pay/unemployment meets requirements for necessities, therefore no more poverty, pay is still related to difficulty/training required (doctors paid more than factory workers, etc.)

Problems:

Inflation – With price controls, inflation should not be an issue because buying power stays the same,

Price controls drive down production – In public sector, since profit is less of an issue government can continue to produce at same level… won’t drive down production to increase profits. In private sector, shouldn’t discourage production, lead to job cuts, because price controls also drive down cost of living for companies as they reduce profits,

Decreased exports as punishment for tariffs—Possible… this is why “worldwide socialism” would be better for the U.S. than being a socialist country alone in a world of capitalism… but less demand for exports would be needed as people would be buying more domestically-produced goods…

Costs:
Paying for national industries,
Employing so many people,
Paying unemployment benefits, other social services,

Revenue:
Progressive taxation,
Tariffs,
Selling produced items,

Would these even out?"


Now, I am pretty much 100% sure that not a single person on this board thinks this is a good idea. I don't even necessarily think it's a good idea myself. It's probably a bad idea. But I won't know whether it's a bad idea or not until I hear all the criticisms of it, in which case it'll become a bad idea in my head if I hear a criticism that I can't respond to adequately, which is likely to happen.

So, please, fire away, in order to promote my selfish, too-much-time-on-my-hands education.

Also, make sure they're utilitarian, "this would be bad for society because, etc. etc." arguments, as opposed to rhetorical, "Thaits a bayud adeeyah caws its jest plaen UnameriCAN ya Cammie!" type arguments. Also keep in mind that I'm playing devil's advocate and don't necessarily agree with what I posted above.

[MoMark]

I like the fact that you thought this out! I'm actually a moderate politically with a Capitalist view on money making and a left-leaning view on health care. I agree that lobbying should be cut out in Congress and that donations to political campaigns need to be limited to a specified amount by any individual doner, corporate and individual, to prevent improper influencing and manipulation (the George Soros factor I call it).
I think we should have a flat tax of 10% for everyone period. No deductions, no loopholes no matter how rich you are or what investments you have. 10% of a $200,000 income is a lot more than 10% of a $20,000 income and maybe there could be a cutoff at what is considered a poverty income base. But without loopholes and investment schemes and fancy income manipulation, the rich would be paying a lot more in taxes. That's clear. And 10% is not unfair. It's the biblical standard! It would also simplify the American tax code and eliminate huge waste while making investment and income projection accurate and predictable.
I also agree we should have a consumption tax on certain items, though I'd have to think to outline what those would be realizing that one has to be exceedingly careful on a subject / topic like this so as not to kill golden geese in the process. I want us to remain America, not turn into a North American Sweden.
I would like to see legally mandated transparency in the drug companies so that we can see, or at least a designated agency can monitor, their true costs and prevent gauging which I think is rampant at this time which adds to the cost of health care.
I think many of the things you mentioned were actually already tried in classic Soviet communism, at least in the beginning, and it doesn't seem to work well.
I do think there is a balance though and it's a question of finding it where you don't stifle one's drive to succeed, but keep the Bill Gates of the U.S. to a minimum as well as outrageous wealth which allows them to enter the political process unelected just by virtue of their extreme wealth.
But we also have to recognize... I think... that some people just don't give a damn and will coast and ride if they can and we have to prevent their success in leeching off society as well.
So... there's a lot to think about!

[fishmonger]

There is definitely a lot to think about... my brain is pretty jumbled constantly from all the information that comes into it. In real life I'm more of a left-leaning capitalist, of the opinion that capitalism is good for the most part but that government should step in to provide or supplement the needs that the market doesn't provide adequately on its own (healthcare, housing, etc.)... the reason I posted this, basically, was because I was looking up socialism on the web, not knowing what it was exactly. I came across the website for the U.K. Socialist Party, and one idea they had (having all of the parliament members in their party paid the same as the average wage for a skilled worker) seemed so awesome that I decided I had to at least give their philosophy a chance before discarding it...

As for your criticisms,

A. First of all, Soviet communism certainly didn't work well at all, I think everyone can agree with that... however, modern-day socialists will tell you that that failure was due more to the totalitarian nature of the government than of the failures of the planned economy itself. Socialists today tend to advocate a type of representative democracy even more direct than what we have in the U.S., with instant recall available for representatives the people don't like, and pay for government officials dependent upon the pay of their constituency, as I mentioned before. So while "dictatorship of the Proletariat" Communism could definitely be considered a proven failure, I'm not so sure about true democratic socialism, although that could possibly be an equally utopian and unrealistic philosophy itself... I don't know.

B. "I do think there is a balance though and it's a question of finding it where you don't stifle one's drive to succeed, but keep the Bill Gates of the U.S. to a minimum as well as far as outrageous wealth which allows them to enter the political process just be virtue of their extreme wealth." -- Real-world me agrees with you completely on this.

C. As for a socialist system increasing unemployment and causing more people to leech off the system -- I think that's the best argument against it. The issue is whether you could design a system where there would be enough incentive for employment to keep this from happening. The main benefit I can see from the system I lined out would be that you could provide for a real "living wage" without causing a big rise in job cuts, since the not-for-profit government wouldn't have the same incentive to cut jobs to maximize profits that a private corporation would have. That's just in theory, though, and it could work out differently in the real world, of course... another issue is whether the utilitarian benefit of eradicating poverty and reducing crime (which often arises as a result of income inequality) would override an increase in unemployment and a slowed-down economy if those would be effects. Keep in mind that even the totalitarian Soviets didn't completely stifle innovation... they were the first ones to go to space, after all.

[GoPadge]

I took a quick look at the 2005 poverty levels, copied them to an Excel spreadsheet and played a bit with some basic numbers. With the current minimum wage of $5.15/hr, it is not possible for a single parent to work full time and not be under the poverty level without other assistance. And as the number of children grow, the hourly wage needed to be above the poverty level grows fairly significantly. What is heartening is that it's theoretically possible for a two wage earner family of 4 to be above the poverty level with the current minimum wage. (Though some assistance would likely be needed for childcare.)

Size of family Weighted average............Number of Children
................................None......One....T wo....Three...Four....Five.....Six....Seven...Eigh t +
One person.............10,160...10,160

Two persons............13,145...13,078..13,461

Three persons..........15,577...........15,720..15,735
Four persons...........19,971...................19,806..19,874
Five persons...........23,613.......................... .23,307..22,951
Six persons............26,683......................... ..........26,096..25,608
Seven persons..........30,249........................... ................29,229..28,079
Eight persons..........33,610........................... ........................32,135..31,862
Nine persons or more...40,288..................................... ......................39,270..37,757

Minimum wage to be at poverty level
One Wage Earner.................$4.88....$6.47...$7.56..$9. 55...$11.03..$12.31..$13.50..$15.32..$18.15
Two Wage Earners................$3.14....$3.78...$4.76..$5. 60....$6.27...$7.03...$7.72...$9.44

Chart from http://www.census.gov/hhes/www/poverty/threshld/thresh05.html (broken link)

[Mark S.]

Capitalism and socialism share a common problem.

In capitalism, most of the wealth is concentrated and controlled by an extreme minority of the population: the capitalists. Call them CEOs, call them shareholders, call them carpet baggers or whatever you want. Comes down to the same thing.

In socialism, most of the wealth is concentrated and controlled by an extreme minority of the population: the State. Bureaucrats rule in the name of the people, but much of the 20th century showed us that more often than not they rule in name only.

The one virtue that socialism seems to have over capitalism is that the ruling minority --- at least in a democratic society --- is accountable to the populace via democratic elections. You can vote your congressman. You can't vote out the CEO of Halliburton or Bechtel.

Still, both systems ultimate solution doesn't seem very attractive to me. The ideal system ought to be one where wealth is spread out amongst the people, not controlled by a select few. Whether those few are selected by "the market" (capitalism) or by vote (socialism), it is still a select few. I'd rather it be the many.

This is the aim of distributism, the philosophy put forth by Hilaire Belloc, G.K. Chesterton, E.F. Schumacher, and to some extent more modern guys like Wendell Berry. It makes a great deal of sense to me.

[english_teacher]

Originally Posted by Mark S.

The ideal system ought to be one where wealth is spread out amongst the people, not controlled by a select few. Whether those few are selected by "the market" (capitalism) or by vote (socialism), it is still a select few. I'd rather it be the many.

The distribution of wealth should be based on merit not need. EARNING the wealth rather than being given the wealth through redistribution.

Just because you're in need doesn't mean that a portion of someone else's fortune should be given to you. That's socialism (actually quite close to the communist ideal comrade), and unacceptable in a free society.

[FistFightingHairdresser]

Originally Posted by english_teacher

The distribution of wealth should be based on merit not need. EARNING the wealth rather than being given the wealth through redistribution.

Distribution based on Merit? Where would that put Wall Street? In line with the Welfare Queens?

Originally Posted by english_teacher

Just because you're in need doesn't mean that a portion of someone else's fortune should be given to you. That's socialism (actually quite close to the communist ideal comrade), and unacceptable in a free society.

But the insane and indigent walking the streets are acceptable in a free society? Or is it simply a matter of personal taste that someone goes insane, takes to the bottle and pisses himself to sleep every night?

I'm not for providing a hammock for the lazy, but I also acknowledge there are truly people who are unable to support themselves in this society who didn't earn the denial of basic Christian charity. And if that charity has to be mandated by tax, then so be it.

Distribution of wealth doesn't contribute to the good of society, but at the same neither does allowing people to waste away on the streets. Like it or not, the very desperate have a way of taking what help they need.

[Mark S.]

Originally Posted by english_teacher

The distribution of wealth should be based on merit not need. EARNING the wealth rather than being given the wealth through redistribution.

Explain to me how Donal Trump or the Bushes EARNED a dime.

Here is exactly the problem with our modern American system: It rewards investment over labor. The people doing the actual work must pass the profits up to the people doing no real work.