Improving the world / Sunkara looks at the world and recoils at its economic conditions. “What I am certain about,” he writes, “is that we live in a world marked by extreme inequality, by unnecessary pain and suffering, and that a better one can be constructed.”
There is no doubt that economic inequality exists. The nature of that inequality, whether it is of opportunity or of outcome, and whether it is a graver problem than poverty, are the vital issues. Hardship also exists, but the issue is whether there is more hardship today than there was in the past and whether life is more difficult in capitalist societies than in socialist societies.
Given this undesirable situation, Sunkara believes that democracy is the solution. He has in mind voting his preferred candidates into office and “extending democracy radically into our communities and workplaces.” He sees few drawbacks to democracy. Will voters determine which restaurants will be in the community? Or whether Time, Sports Illustrated, and Jacobin are on the newsstand? But then, doesn’t market capitalism already do this?
Consider how Sunkara thinks democracy will improve the workplace. In his first chapter, “A Day in the Life of a Socialist Citizen,” he imagines that you take a job at a pasta sauce company. You earn $15 an hour bottling sauce and management respects you. After a year, your productivity rises 25%. You ask for a raise and get one, but it is only 13%. Emboldened by your accomplishment, you petition management to raise the pay of another worker. Management declines, but your effort leads to a union that’s intended to improve conditions for all workers. However, the union is no match for the bogeyman of globalization; competition from producers in India reduces your company’s profits and jeopardizes your job. Management responds by automating the production process, and automation is another bogeyman. Although you keep your job, you work more, lack input in company decisions, and envy earning 2% of what management earns. From this, Sunkara concludes that your life would be better without capitalism.
Labor and investment / The author defines capitalism as “a social system based on private ownership of the means of production and wage labor.” A definition of capitalism that incorporates private ownership is conventional; one that emphasizes wage labor is not. Socialists are skeptical of markets to begin with and downright hostile to the labor market. The author claims, “The market under capitalism is different because you don’t just choose to participate in it — you have to take part in it to survive.” In fact, there are alternatives to participating in markets. If property rights are not established or enforced, one may hunt and gather. That alternative is neither good nor realistic. Nevertheless, it is plausible that individuals enter markets because the benefits outweigh the costs.
Socialists dislike a competitive labor market because “all you have is your ability to work.” They believe that workers are at a disadvantage: workers need jobs more than the capitalists who own the land and tools need workers. On behalf of a typical worker, Sunkara reasons that because “you’re subject to the dicta of your bosses,” the relationship “feels oppressive.” Socialism presumably relieves the oppression.
Sweden exemplifies his idea of good socialism. In his “slightly idealized version of Sweden,” a citizen has “social rights” to education, “great health care, affordable housing,” unemployment benefits, “state-funded retraining,” and more. He envisions how life can be even better. In the author’s socialist utopia, the “traditional labor market and capital markets” do not exist. Workers do not toil for wages. They earn “minimum incomes” plus a share of the profits from the companies they help run. A “workers’ council” considers job characteristics at each company in order to determine the minimum incomes, which vary by occupation within a firm.
In a wage table the author provides, inspired by “a Yugoslav work-point system,” the manager at the top earns about four times the minimum income of a manual laborer at the bottom. Sunkara assumes that a majority of workers will accept those disparities because they are less than what we observe in today’s labor market.
There are at least two taxes in the socialist utopia. An income tax pays for government-guaranteed health care, education, etc. A tax on “capital assets” serves two purposes: One is to transfer income from capital-intensive firms to labor-intensive firms so that firms will earn similar after-tax profits, which means workers will earn similar shares of after-tax profits. The other purpose is to raise funds for investment. Sunkara explains, “Applicants are judged on the basis of profitability, job creation, and other criteria including environmental impact.” Government officials will do the judging. If there is a shortage of funds and no interest rate to allocate them, those seeking funds will argue that their projects are more profitable, create more jobs, and produce cleaner air and water.
It is unclear how government officials will decide between projects that show tradeoffs in those criteria. Will government officials fund a project that is more profitable and less favorable to the environment, or one that is less profitable and more favorable to the environment? In the event of a surplus of funds, “some of the money can always be directly transferred back to taxpayers to stimulate demand.” A reader may doubt the efficacy of government officials allocating funds for capital expenditures; the Solyndra boondoggle comes to mind. “All these outcomes entail trade-offs,” Sunkara admits, “and these trade-offs are political decisions.” But the author does not explain why tradeoffs in the socialist utopia are preferable to tradeoffs in actual capitalism.
In contrast to common grumbling about work, socialists look at the labor market and see “exploitation.” Sunkara writes:
It’s easy to understand this concept on production lines. If you’re bottling a hundred curry pasta sauce jars an hour, sixty of those might be necessary to pay your wages and other overheads, but every jar after that is a surplus. Some goes directly into a capitalist’s pockets, but much of it is reinvested into production to keep firms competitive. Socialists call this exploitation.
Workers probably do not mind a capitalist earning a profit, even if they begrudge the size of the profit relative to their wages. Whether workers view wage labor as exploitation is debatable. For instance, workers who want a share of the profits can buy stock. They also can quit their jobs and search for better ones. How can a socialist believe that workers in capitalist society are exploited when capitalist production provides higher standards of living?
Encouragingly, Sunkara sees exploitation in socialism too. In the author’s utopian socialist society, one of the workers becomes disgruntled. “Capitalism is the exploitation of person by person; socialism is the exact opposite,” he writes.
Reform or revolution? / The history of political movements is the largest part of the book. The history begins with Karl Marx and Friedrich Engels. Sunkara quotes from Engels’s 1845 book The Condition of the Working Class in England to make the point that people did dangerous jobs and lived in squalor during the Industrial Revolution. He reiterates Marx’s condemnation of profiteering and the reinvestment of profits without input from workers.
Then he describes how political parties in various countries tried to implement socialism. Socialist activists argued among themselves over whether to reform the existing economic system or revolt against it. In the early German socialist movement, Eduard Bernstein eventually advocated “reforms.” We can imagine the reforms included legal minimum wages, legal maximum hours of work, and social security. Rosa Luxemburg, another German socialist, favored revolution: “She likened the struggles of those who tried to gradually bring about change within capitalism to the plight of Sisyphus.”
This history features political operatives such as Lenin and Stalin and Mao and Deng Xiaoping. Entrepreneurs are absent. Either there are no entrepreneurs in the history of socialism because socialist governments repressed them or Sunkara omits their contributions to highlight the struggles for political power.
Sweden / One reason contemporary American socialists hold up Sweden as a model is that the history of socialism in Sweden was not treacherous like it was in the Soviet Union and China. Early Swedish socialists, according to Sunkara, “didn’t capitulate to the market as it was but made a radical attempt to change how it operated.” Following World War II, employers, unions, and the country’s Social Democrats struck a deal: Employers gave up the ability to negotiate wages at the industry level. In return, unions restrained their demands for higher wages. Unions and the Social Democrats got wage equality, full employment, and welfare benefits.
The system worked so well that Social Democrat Ernst Wigforss declared it to be a “provisional utopia.” It indeed proved to be provisional. Sunkara admits:
Social democracy was always predicated on economic expansion. Expansion gave succor to both the working class and capital. When growth slowed and the demands of workers made deeper inroads into firm profits, business owners rebelled against the class compromise.
Swedish voters ousted the Social Democrats from power in 1976. Sunkara suggests that the socialists’ support for nuclear energy cost them victory. He alludes to bad fiscal policy. Government spending, he reports, was “almost 70 percent of GDP.” He neglects to report the confiscatory tax rates that financed so much spending. Astrid Lindgrin, author of the Pippi Longstocking books for children, penned a fable that mocked the leaders of the Social Democratic Party because she faced an income tax rate of 102%. American progressives with an affinity for Swedish socialism cannot expect American voters to tolerate excessive welfarism more than Swedish voters did in 1976.
Policy agenda / Sunkara endorses the policies of Vermont independent senator and Democratic presidential candidate Bernie Sanders: guaranteed employment, government-provided health care, and the Workplace Democracy Act. He does not explain how these policies would work. He does not anticipate and rebut objections. He believes that passing socialist legislation would produce abundance: “We can also guarantee access to nutritious food, safe and secure housing, free child care, and public education at all levels.”
Sunkara does give attention to political organizing. He intends to generate “a renewal of class antagonism and movements from below.” He aspires to recruit union members, teachers, nurses, and environmentalists.
He recognizes that the U.S. Constitution will hinder the achievement of his goals. He dreams of eliminating the Senate, the filibuster, the Electoral College, and federalism. Despite his expectation that these maneuvers will cause a “crisis,” he remains optimistic. Following the crisis, socialist society will end “suffering,” “exploitation,” environmental degradation, and war. Those outcomes, according to the author, are why we should have socialism.
Conclusion / Prosperity, environmental quality, and peace are worthy goals. The question is whether democratic socialism is the way to attain them. According to the World Bank, the number of people in the world living in extreme poverty fell from 1.9 billion in 1990 to 715 million in 2015. Sunkara thinks this progress is more the product of expanded democracy than expanded capitalism.
Exploitation is, of course, unacceptable. But he believes that profits are evidence of exploitation. He ignores that whenever and wherever profiteering is prohibited, workers suffer. Sunkara says voting for socialism will reverse global warming, but he omits what all must happen between those two events.
Among many admissions that capitalism does some good in the world and that socialism has an ugly side, he concedes that “the way to prevent abuses of power is to have a free civil society and robust democratic institutions.” Perhaps the greatest critique of his socialist thinking is that he ignores the tyranny of the majority and the role of economic freedom in preserving civil freedom.
