Today, American Democrats have a more positive view of socialism than capitalism, and less than half of young adults have a positive view of capitalism. But the debate isn’t merely between left-wing socialists and right-wing capitalists. Even President Trump argues that capitalism generates prosperity abroad at the expense of American workers. Years of wage stagnation and diminished economic prospects have soured many Americans on the system that made the U.S. the world’s largest economy.
Compared with faster-growing economies in the developing world, America feels older, and not only because the elderly will soon outnumber children. Important parts of the economy, from smartphones and cellular carriers to airlines, resemble sluggish oligopolies more than dynamic marketplaces. Ever more sectors of the economy look like heavily regulated utilities that are at reduced risk of disruption or innovation. In health care, hospitals, physician groups and insurance companies are getting bigger and in some cases driving out competitors.
The problem isn’t market dynamics, but the increased government intervention in the economy that discourages competition. Rather than relying on innovation, many companies often now seek to exploit licensing arbitrage opportunities and engage in other rent-seeking behaviors. They try to beat competitors through regulatory capture and crony capitalism rather than making better products for less.
In which society is it easiest to get rich? Contrary to common belief, it is not countries like the US or the UK that create the highest number of rich people per capita, but Nordic social democracies like Norway and Sweden. Counter intuitive as it may sound, high taxes, generous welfare states and strong unions makes a better environment for the people who wants to earn huge amounts of money, than free markets, low taxes, and minimal government intervention.
Harald Eia is a trained sociologist who works in television with comedy and documentaries.
What Ivanka Trump doesn’t know about social mobility.
.. Back to the “potential for upward mobility”: Where do people from poor or modest backgrounds have the best chance of getting ahead? The answer is that Scandinavia leads the rankings, although Canada also does well. And here’s the thing: The Nordic countries don’t just have low inequality, they also have much bigger governments, much more extensive social safety nets, than we do. In other words, they have what Republicans denounce as “socialism” (it really isn’t, but never mind).
And the association between “socialism” and social mobility isn’t an accident. On the contrary, it’s exactly what you would expect.
To see why, put it in a U.S. context, and ask what would happen to social mobility if either the right wing of the G.O.P. or progressive Democrats got to implement their policy agendas in full.
If Tea Party types got their way, we’d see drastic cuts in Medicaid, food stamps and other programs that aid Americans with low income — which would in many cases leave low-income children with inadequate medical care and nutrition. We’d also see cuts in funding for public education. And on the other end of the scale, we’d see tax cuts that raise the incomes of the wealthy, and the elimination of the estate tax, allowing them to pass all of that money on to their heirs.
By contrast, progressive Democrats are calling for universal health care, increased aid to the poor, and programs offering free or at least subsidized college tuition. They’re calling for aid that helps middle- and lower-income parents afford quality child care. And they propose paying for these benefits with increased taxes on high incomes and large fortunes.
So, which of these agendas would tend to lock our class system in place, making it easy for children of the rich to stay rich and hard for children of the poor to escape poverty? Which would bring us closer to the American dream, creating a society in which ambitious young people who are willing to work hard have a good chance of transcending their background?
Look, Ms. Trump is surely right in asserting that most of us want a country in which there is the potential for upward mobility. But the things we need to do to ensure that we are that kind of country — the policies that are associated with high levels of upward mobility around the world — are exactly the things Republicans denounce as socialism.
Years ago, when an editor asked me if Boeing would be around to pay off a 100-year bond it had recently offered, I flippantly replied that 100 years was only two product cycles for the company.
I underestimated the duration of its products. The Boeing 747 first flew in 1969 and a freighter version will continue to be built near Seattle at least through 2022. The Boeing 737, which first flew in 1967, faces an order backlog that extends through 2027. An all-new replacement for the commuter workhorse is unlikely to appear until the 2030s.
Which makes all the more anomalous Airbus’s decision to end production of its impressive and giant A380, which has been flying only since 2005.
Socialism is currently in vogue. If the word means anything in today’s context, it means projects of unusual government ambition, built on our globally shared capitalist technological and commercial base. The A380 was exactly such a project. Underwritten by massive European government subsidies, the plane was an engineering sensation. Passengers loved the roomy jet. Yet now it’s kaput. What went wrong? Or to phrase the question more usefully, what technological and commercial realities would its sponsors have had to overrule to assure its success?
The list is not a short one. They would have had to overrule the desire of passengers to fly direct, bypassing the crowded hub airports (like London’s Heathrow) for which the A380 was built.
They would have had to overrule the preference of business travelers for frequent departures. With 535 seats to fill, the superjumbo was hopelessly matched against operators offering more convenient schedules by using smaller planes.
Most of all, they would have had to overrule the public’s appetite for lower fares. On a per-seat basis, a new generation of super-efficient twin-engine planes such as the Boeing 787 proved cheaper to operate even though the four-engine A380 could accommodate twice as many customers.
In the end, enough socialism could be mobilized to get the plane built, but not enough to make it commercially viable. Europe’s governments would have needed to extend their dominion beyond their own taxpayers who financed it. They would have needed to dictate to the world’s airlines and travelers and even the aerospace industry’s global supplier base, which proved unwilling to develop a new fuel-efficient engine for a plane with a doubtful future.
This should guide us in our thinking about what kind of “socialism” is possible today. Governments can tax their own people until they rebel at the ballot box, refuse to pay, or emigrate. They have no power, in our world, to dictate what kinds of goods and services and technologies (green or otherwise) the global marketplace will accept.
When the end came, it came because the A380’s last dedicated customer, the government-backed Emirates Airline of Dubai, gave up on the superjumbo. Planes in pristine condition were lingering unsold on the used-plane market. A 10-year-old jet was recently retired by Singapore Airlines . Now it’s being broken up for scrap, proving once again socialism’s knack for making grown men cry.
Boeing’s management was vilified at the time for declining to compete with Airbus to replace its own fabulously successful 747 jumbo jet. But Boeing treated its business like a business. Its forecasts showed the market was likely to evolve in ways unfavorable to another very large passenger plane.
French and German politicians ignored such considerations. They were more interested in making a showy statement about Europe’s technological prowess. Boeing chafed for decades at the subsidies they poured into Airbus. Airbus, for its part, was not above portraying the money U.S. taxpayers spent defending the free world as a backdoor handout to Boeing through its defense business. This debate is likely now to get an ugly second wind if U.S. negotiators insist that Airbus pay back the estimated $20 billion in “launch aid” the A380 failed to recoup (the answer will certainly be no).
The parallel to California’s bullet train hardly needs to be drawn. Gov. Gavin Newsom seems already to be walking back his apparent cancellation of the grossly over-budget project. He may hope that Green New Deal dollars from Washington will become available after 2020 to replace the funds California isn’t willing to provide.