Economics and the tilt to socialism
My son was home from college for spring break. As we ate dinner one night, he described to my wife and me how a professor warned the students that many of the jobs they are studying for will be gone within a few years. Artificial intelligence and automation could put millions out of work in the very near future, the professor had told the class, and my son seemed genuinely worried.
In the next breath, he recounted a speech he heard from one of the lesser-known Democratic presidential candidates who discussed a future where U.S. citizens may receive a “universal basic income,” particularly if AI and automation take us to the point where there just aren’t enough jobs for a growing population.
Of my three children, Liam has always had the most entrepreneurial, capitalist spirit. He’ll turn 21 this summer and has had at least six different real jobs where he was on someone’s payroll, not including some contract video work he’s done for friends. He idolizes Elon Musk and keeps abreast of happenings in business and technology more than most people I know.
So when I thought how the future he described — especially the universal basic income idea — could be called a form of socialism, I knew I had to do some research. As most who keep up with the news know, people his age are more and more warm to some of the concepts of democratic socialism — which is defined as keeping the means of production in private hands but having government intervention to provide social programs.
A poll from August 2018 said 49 percent of those in the 18-34 age group hold a positive opinion of capitalism while 45 percent have a positive view of socialism. The same survey found 61 percent of Democrats and 25 percent of Republicans in this age group take a positive view of socialism.
It’s easy to understand where they are coming from. In their lives, unbridled capitalism has led to turmoil and the Great Recession. The economy has recovered, but many who hold full-time jobs still can’t afford basic needs. They watch as this economy rewards those at the very top while for workers wages are stagnant, debt — student loans and credit card, mainly — seem insurmountable, housing is unaffordable, and any kind of serious injury or illness could have lifetime financial consequences. This generation lives an insecure life when it comes to basic needs — housing, health care, employment and financial stability.
When these young people hear Donald Trump or some wealthy Wall Street executive droning on about the beauty of free markets and capitalism, they also know that these same people for the most part hold different views on climate change, gay rights, racial inequality, immigration, gun control and abortion rights. In other words, the old guys lack credibility on so many important issues why should they believe what they are saying about capitalism?
A Pew Research poll released in January found that 70 percent of Gen Z (ages 13-21 in this poll) and 64 percent of Millennials (ages 22-37) believe that government should do more to solve society’s problems. Some want to classify this embrace of socialism as the consequence of a spoiled, privileged generation that expects the government to take care of them. I disagree. Most of the young people I know aren’t afraid of work. Quite the opposite.
And America’s younger generation isn’t calling for any kind of government takeover of private businesses and a change to a state-run economy. It’s dishonest to label this current trend as anything resembling that.
What they aren’t going to tolerate, however, is being a part of a system they see as increasingly gamed to reward those at the top. They want their leaders to embrace social change and do a better job of making sure that workers get a larger share of the wealth they help create.
From an economic standpoint, it’s almost as if they are embracing a return to the 1950s or 1960s — a time of more collective bargaining, fairer wages, affordable health care, affordable housing, and before the runaway greed of corporate chieftans and boards was accepted as normal.
In 2016, the average corporate head earned a salary 271 times that of the average worker. In 1965 that same CEO earned a salary that was only 20 times larger than his average worker. If politicians don’t see that realities like this are partly responsible for this generation’s discomfort with unbridled capitalism, then they’re just not listening.
From my vantage point, it seems the U.S. might be a better place if our current leaders embraced more of the positions the younger generation is espousing — no matter what name you want to give it.