Sunday, July 26, 2009

So, what then is ‘Socialism’?

Among the things one can’t avoid noticing after living in North America for more than two years is the bizarre use of the ‘S-word’. It recently keeps popping up in the context of health care reform in the US but it also rears its allegedly ugly head in many other contexts.

Since the 1960s, most notably promoted by Ronald Reagan, the term ‘socialized medicine’ has been used as a scarecrow to denunciate any other approaches to healthcare than the private system the US has had in most places. Other systems, such as the Canadian or the British or the French, by being branded ‘socialist’ gave people the impression – as comedian Bill Maher put it recently – that ‘Stalin himself would stop by to use his iron fist for your prostrate exam’… And the campaign proved to be successful.

It is interesting to see how people in North America find it difficult to imagine that any other system of capitalism than theirs is necessarily ‘socialist’ or even ‘communist’. Some in the US even fear that Obama’s approach to saving the banking system or rescuing the car industry is a direct way to socialism.

We won’t get into the details of the differentiations – it’s after all the 101 of political philosophy. It is however a good time to bring this to our attention. After 30 years of what often has been derogatorily been dubbed ‘neo-liberalism’ or the ‘Washington Consensus’ we see now a shift in economic policies. In many countries of the globe governments – some more reluctant than others – have assumed a role which assigns business a wider role and responsibility in society than the one to shareholders only. And more broader yet, the US seems to be leading reforms of social and economic life which point to a more inclusive and socially balanced form of capitalism.

Countries such as Sweden or France – often called ‘socialist’ on this side of the Atlantic – are capitalist countries with all the trimmings: private property of the means of production, markets, and the rule of law. However, they have built in some mechanisms that cater for the whole of society (such as a healthcare system for all) and ways of redistributing some of the income of the top earners in society for the benefit of the more disadvantaged.

These differences are not rocket science. It has been studied by a whole school of academic thought, among them the ‘Varieties of Capitalism’ approach, or the ‘National Business Systems’ school of thought. The more surprising it is that even respected scholars in North America fall in the trap of using this simplistic view on the S-word – as a recent debate about the Canadian health care system on the email listserver of the ‘International Association of Business and Society’ (IABS) shows.

It’s time to get rid of old stereotypes. Let the debate begin!


  1. Whatever else your crystal ball tells you, it should be whispering "continue to save." This is not what economists or Wall Street want you to do. Ignore them. We're in for a long dry spell.

    Recessions inevitably deliver capitalism a bad rap.

    History shouts that dependence on government becomes dangerously habitual, and leads to loss of liberty. That goes for individuals, as well as for businesses.

  2. I chanced upon to view your blog and found it very interesting as well as very informative, i was need such type information, which you have submitted. I really thankful to you, this posting help a huge number of people. Great ... Keep it up!

  3. Excellent post. I've been thinking a lot about this too. As an American who's been living in Europe (Germany, Switzerland, Bosnia & H.)for over a decade now, I've come to see the largely Republican led campaigns against anything deemed as "social" to be quite disheartening. Republicans have (strangely) done a great job of making many average working Americans believe that the American dream is exclusive about $$$ & things...and that if YOU just work hard enough you can make it too! Then, they happily drive to the bank on the backs of workers suffering under i) low vacation policies ii) weak (or no) health insurance policies iii) very high rates of deptression & obesity.

    I'm happy to see change coming to the US...but it won't be easy. Excellent blog --Ryan


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