Reconciling the U.S.’s current economic model with its democracy is a challenging task for Americans but to come up with a name to call what they want appears to be even more challenging. The crisis is more evident for the Democrats, as opposed to Republicans who generally think the only problem with the economy is that there is too much government regulation and support for the poor, making them lazy. As the November mid-term elections, which will also set the tone for the 2020 presidential election, approach, this dilemma of the Democrats is playing out.
A Gallup poll recently threw up more evidence of this crisis for the Democrats. Only 47% of Democrats view capitalism positively, down from 56% in 2016; 57% of Democrats now view socialism positively, which is little change from 2010. Among Republicans, 71% are very positive about capitalism while only 16% are positive about socialism. The Democratic base has been showing an affinity towards ‘socialism’ since the economic collapse of 2008, Gallup found.
Massachusetts Senator Elizabeth Warren, who is widely speculated to be a Democratic challenger to President Donald Trump in 2020, has been trying to place herself as the bearer of the progressive mantle in America. This week, she introduced a new Bill to address the widening income inequality and hold corporations accountable, titled Accountable Capitalism Act. And she chose to explain the Bill in an op-ed in the Wall Street Journal . “The... Act restores the idea that giant American corporations should look out for American interests. Corporations with more than $1 billion in annual revenue would be required to get a federal corporate charter. The new charter requires corporate directors to consider the interests of all major corporate stakeholders — not only shareholders — in company decisions. Shareholders could sue if they believed directors weren’t fulfilling those obligations…,” she wrote.
New rules
The proposals are already facing a blowback. Harvard economist Jeffrey Miron told CNBC that the Bill will destroy capitalism and encourage crony capitalism. Ms. Warren’s proposal “will create a whole set of new rules that the federal government will enforce. Those rules will not be clean, explicit or simple,” Mr. Miron said.
While progressives like Ms. Warren are tiptoeing around the word ‘capitalism’, the party’s younger, more diverse base is happily embracing the word ‘socialism’. Meanwhile, Alexandria Ocasio-Cortez, a 28-year-old Latina running her first campaign, defeated party veteran Joe Crowley in New York's 14th congressional district primary recently and has already become a national figure. She calls herself a ‘democratic socialist’.
In 2016, his opponents both in the Democratic and Republican parties, sought to turn the ‘socialist’ label as a disqualification for Bernie Sanders, but it did not play out that way. “Don’t be afraid of socialists,” he said in a speech then. “Roosevelt implemented a series of programmes that put millions of people back to work, took them out of poverty and restored their faith in government... And, by the way, almost everything he proposed was called ‘socialist’. Social Security... was ‘socialist’. The concept of the ‘minimum wage’... socialist. Unemployment insurance, abolishing child labour, the 40-hour work week… socialist.” Early this year, reflecting on her 2016 defeat, Hillary Clinton said that being identified as a capitalist lost her the presidency.
Varghese K. George works for The Hindu and is based in Washington.
