The New American Socialism

By Steven Miller
  • Monday, February 23, 2004

Nobel Laureate Milton Friedman makes a powerful case that the United States today is at least 50 percent socialist.

His argument relies on two uncontroversial premises: First, socialism is defined as government ownership and control of the means of production; second, the classic test of ownership is who receives the income from those means.

Friedman then points to the economic data: Forty percent of American national income now is spent by federal, state and local government, while another 10 percent goes to pay for the regulations and restrictions that government imposes on enterprises.

“So about 50 percent of the output of the country is controlled by the government,” he concluded in a January 2001 interview, “which is equivalent to saying that the government owns 50 percent of the means of production.”

How did America — land of the free and home of the brave — go so far astray? After all, as recently as 1990 the average American still controlled about 57 percent of his or her income. Yet, during the ’90s — while the rest of the world was rediscovering free markets — America was sleepwalking ever deeper into socialism’s moldering clutches.

Actually, the same could be said about the three previous decades also — the ’60s, ’70s and ’80s. That’s because, back in 1960, the three different levels of American government, all together, confiscated less than one-third of the national income. At the time, average Americans were able to decide how to spend 67.4 percent of their paychecks. Since then, however, it’s all been downhill.

What’s been driving this transformation? Scholars on both the left and the right who have seriously studied government-employee unions agree that these organizations provide the primary engine.

Operating in virtually every locality in the country, white-collar government unions constantly pursue ever greater spending at all levels of government, because bigger bureaucracies translate into ever-higher salaries and more union members. Practically speaking, these government unions constantly lobby and organize for ever-higher burdens on taxpayers. Yet since union strategists are bright enough to usually pursue these goals surreptitiously, average citizens rarely learn exactly what’s being done to them until too late. At the most they hear carefully composed sound bites suggesting that “caring” or “fairness” necessitates some new government program.

As a result, writes Leo Troy, distinguished professor of economics at Rutgers University, a “New Society began to evolve during the past generation and its leading characteristic is the redistributive state. The transfer of income from one group of the population to another has become the major economic and social function of government’s domestic programs.” (Emphasis added).

Troy calls this redistributive state “the New Socialism,” and devoted a 1994 book, The New Unionism in the New Society, to the “watershed” and “far reaching” role of government unions in incessantly building and expanding the New Socialism.

Interestingly, also in 1994, University of California Santa Cruz sociology professor Paul Johnston — a life-long anti-war, labor and social-cause activist — published Success While Others Fail. Writing from his own extensive history as a government-union organizer, Johnston clearly intended to provide other union operatives with a cookbook for wringing more lucrative contracts out of government employers.

Three key steps for successfully rupturing existing municipal budgets and forcing higher government expenditures, Johnston counsels, are for the unions to 1) shroud their monetary goals in the language of “public needs,” 2) form coalitions with loud special-interest groups that want more “free” goods and services, and then, in concert with those groups, 3) hammer local politicians at length, publicly, with the weaponry of well-designed sound bites.

Professors Troy and Johnston both agree that, in the words of the latter, “Public workers’ views of the public interest almost invariably complement their own private interests,” and as a consequence “they are bureaucracy builders” and “state builders.”

Troy argues convincingly that most historical instances of support for socialism by traditional American unions have been tactically pragmatic, and that the socialism being imposed on America by government unions today is not Marxist-Leninist. That no doubt is true for the great majority of government union members in Nevada.

But Johnston, in his own semi-autobiographical account, suggests that many organizers, such as he himself was, are out for ideological revolution, confiding, “I thought I saw a chance for the realization of that old Marxist-Hegelian dream of earthly salvation, collectively organized social self-reproduction.”

Indeed, given the most successful stratagem ever concocted for moving America — and states such as Nevada — down socialism’s road, what self-respecting socialist revolutionary would not want to be in on it?

Steven B. Miller is policy director for the Nevada Policy Research Institute.

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