Brother Reich is Wrong About Socialism

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by: John Case
May 17 2012

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robert reich



After a life in the union and socialist movements, I am always amused when the most ardent liberals take time out to redbait themselves, thus making themselves look both cowardly and ridiculous as they run away from their own values. Former Clinton Administraton Labor Secretary Robert Reich has been a consistent and for the most part sober critic of austerity politics and economics. His blog is one of the first places I go for reliable analysis of the economic news of the day. He not only knows the economics landscape well, his experience in the real world of politics makes gives him a good political BS meter.  So -- I treat him as a brother!


Still, the first two paragraphs of Reich's column "The Answer Isn’t Socialism; It’s Capitalism that Better Spreads the Benefits of the Productivity Revolution" are simply false.

First he says "Francois Hollande’s victory doesn’t and shouldn’t mean a movement toward socialism in Europe or elsewhere. Socialism isn’t the answer to the basic problem haunting all rich nations."  Perhaps Reich only understands "socialism" to mean late Soviet--style socialism. In that case the sentiment he expresses would be true -- to an extent (although no one has ever explained to me how Russia was supposed to escape from the putrid Tsarist Autocracy in the midst of WWI except through the Bolshevik seizure of power; nor has anyone explained the dangers when corruption gets so bad that democratic institutions are nullified). 

Hollande's victory is not a step towards the USSR. But, of course, socialism is an infinitely broader concept than that, if that is REALLY what troubles Reich. 

Socialism, including Communist and Marxist ideology, embraces all efforts to overcome, ameliorate or mitigate the horrors of unregulated capitalism by advancing public goods and public supervision of risks to entire societies when regulation of capitalism fails. Every effort to strengthen public wealth at the expense of private is a step towards socialism. These steps happen, have happened, and will continue happening, in every society when behavior or production in the capitalist/market sectors of society result in market failures -- the inability to deliver necessary goods and services society deems essential to security and progress. Do steps toward socialism mean the end of capitalism? NO. Markets are appropriate for millions of goods and services, and capitalist relations will be a useful part of society for a long time -- even if the Communist Party were leading society!

Reich continues, "The answer is to reform capitalism. The world’s productivity revolution is outpacing the political will of rich societies to fairly distribute its benefits. The result is widening inequality coupled with slow growth and stubbornly high unemployment." Brother Reich -- what possible reform can you be considering that does not entail public sanctions against the prerogatives of wealth and private power?

You make important observations on the huge rise in productivity -- and champion the recovery of those productivity gains from the 1% to the 99%. But by denouncing "socialism" -- "I am not a socialist" -- you head into a fist fight having cut off your own right hand.  

  • The only means of recovering those gains for the working class (whose work DID the production!) is increased bargaining power (the return of socialistic unionization -- you think a vast restoration of employee bargaining power can happen without allying with socialists???);
  •  A more socialistic tax policy on the rich;
  •  investing in universal, "socialistic" free education;
  •  investing in universal, "socialistic" health care;
  •  public "socialistic" investment in a new generation of manufacturing;
  • nationalizing (socializing) parts of the energy industry; 
  • investing in more planned (socialistic) housing and infrastructure development;
  • socialistic public control of Wall Street activities, including public control and supervision of "too big to fail" or "too big to manage" corporations.
 The day you declare "I am not a socialist" -- you implicitly agree to take the "socialistic" content of your own proposals off the table of real negotiations. In the health care debate, for example,  the number one objective of the private insurance industry (revealed in Wendell Porter's Deadly Spin) was to smear Michael Moore's Sicko sufficiently to insure that single-payer "medicare-for-all" proposals were off the table. They won that fight, meaning the chief target remaining for defeat became the "public" option which, once anything "socialistic" was off the table and out of bounds, became a man with his feet planted in mid-air.

  To be fair to Brother Reich, fighting red-baiting is not easy. But there is a better, truer, more honest path, however, then folding to the dishonest and false "I am not a socialist" tack.  Every society on earth is part socialist and part capitalist. Everyone really knows this -- even the most truculent Republican. Every society requires public goods and transfers via government to achieve the goal of everyone sharing proportionally in the gains from our ever more creative labor. No serious participant in US politics advocates a society ALL capitalist, or ALL socialist.  That we need more socialism in numerous areas of our economy and an aggressive turnaround on inequality throughout our institutions is the major question of our country in this time. We can't get there demonizing socialism. We can't get a fair and democratic consideration of the right mix of public and private prerogatives and social domains red-baiting ourselves. 

Come home, Robert Reich -- don't be afraid to wear coats of many colors, of rainbow design, like Joseph of old.

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  • Eventually, all forms of capitalism, supply-side or Keynesian, will have to give way to Socialism. Capitalism in whatever form is to wasteful of limited natural resources, depends upon conflicting and competing class interests, concentrates more wealth and power in the hands of fewer people, who in turn pass laws to protect their wealth and even increase it. Plutocracy, not Democracy, is the end result of economic systems that depend on the private ownership of the means of production.

    Posted by Nat Turner, 07/28/2012 10:25pm (12 years ago)

  • I grew up in the better-dead-than-red era. I grew up in that family. We are still suffering from the brainwashing when we threw the baby out with the bathwater. Let's stop spewing labels and focus on gaining a just and moral society. // Jean Clelland-Morin

    Posted by Jean Clelland-Morin, 07/17/2012 3:10am (12 years ago)

  • Thanks to all for comments:

    some replies:

    On the USSR. There are many lessons to be learned from the Soviet experience, but -- at least for this country -- I do not think either the economic or political model of the Stalin era is one worth repeating. Its collapse is a judgement of history, IMO. But regardless there is no answer there to the current depression and the defeat of austerity. The closest Russian experience of immediate value to our struggle is the Bolshevik line on the 1905 democratic revolution, and even that is remote in both time and context.

    Economics and politics: I agree with Len: the reforms needed to even get out of this depression mandate a very different class configuration and coalition in political power than the leadership of either major party can currently provide. However -- socialism is in the FIRST place an economic order in which public goods prevail over private one. Because the political transition to even adopt the socialist DIRECTION can be sharp and revolutionary, it may seem like the economics can make an equally sharp break -- but that has not been the case in any socialist country. Get too far ahead of the objective conditions that make socialist and communist relations possible and viable, and black markets and counter-revolution will prevail.

    To Scott: Markets reflect a division of labor, and the exchange of scarce commodities associated with that division. Whether firms producing (and consuming) commodities are private or cooperative in ownership they still must acquire a surplus -- otherwise they go out of business. How the surplus is divided may be different, but they are still subject to the same struggle to mandate a competitive rate of "profit". I think history has shown, in every socialist country, that markets for scarce commodities are necessary (otherwise the state has to parse out the goods to some and deny to others -- leading to outcomes highly subject to corruption). Plus, markets will inevitably give a rebirth to capitalist relations since more efficient firms will make more profit. I submit the strength of communist and socialist relations must rest on public goods steadily crowding out commodities -- abundant, non-exclusive, non-rival and universal.

    The "exploitation of wage-labor" recedes as work becomes less homogeneous (i.e. uniquely human), as the means of developing our intellectual and creative "human capital" (for Marx 'from each according to his ability') becomes more free, and universal (education, health care, recreation, housing, food, a sustainable environment, etc). My point is: the economics of socialism is a gradual process governed by the class in power and by the level of technology. Social democracy IS socialism when it is working class led, IS the transition to communist society as long as commodities, markets and the relations they generate have not disappeared.

    Thanks for discussion

    John

    Posted by John Case, 06/14/2012 3:07pm (13 years ago)

  • I appreciate this piece on Robert Reich and his recent comments. The writer ably points out Reich's incisive columns. It was important to point out that Dr. Reich capitulated to red baiting with his opening statement.

    The confusion in this piece begins with the statement on the Soviet Union. It easily can be taken as an anticommunist line.

    The confusion is compounded by more than implying that socialism of some kind can be attained by economic means only. A consistent and intensified political struggle will be necessary to attain socialism.

    Posted by Len, 06/12/2012 3:31pm (13 years ago)

  • First off, thanks to comrade John Case for his article, a piece in the tradition of Marx's "Critique of the Gotha Program" or Rosa Luxemburg's "Can Capitalism be Reformed?" I do see, however, a significant flaw in his analysis. He seems to conflate "capitalist relations" with "market relations," when in fact the two are quite different, albeit interrelated. Capital is a relation of production, the market a relation of distribution. So, in the hypothetical situation he lays out, where the Communist Party controls the state, there may well be a place for the market, and for competition between worker-owned firms in certain sectors, but there will most certainly not be a place for capitalist wage labor, characterized by the extraction of surplus-value. To think that we can leave a niche for capitalist production in a socialist state is stop thinking at the boundary of bourgeois social democracy.

    Posted by Scott Hiley, 06/07/2012 3:17pm (13 years ago)

  • Whose version of "late Soviet--style socialism" does the author refer to?

    Specifically what capitalist relations would you retain in a Communist-led society? Certainly not the accumulation or inheritance of enormous wealth. Not the accumulation of unequal privilege? Not the extolling of racism? Not the wars to grab resources, markets and cheap labor for giant corporations. What then?

    Is individual initiative a monopoly of capitalism? Is the only or primary reward for creativity, enterprise and hard work intense wealth? Is there no way to develop and commercialize new and useful technologies aside from venture capital?

    "No serious participant in US politics advocates a society ALL capitalist, or ALL socialist." Really? What do such societies look like?

    Posted by HenryCT, 06/03/2012 11:44am (13 years ago)

  • The colossal, state mechanism of the federal government of the United States of America, the gigantic storehouse of capitalist, monopolist accumulation(the trillion dollar bailout) that lay side by side the millions and millions of Latinos, African Americans, native peoples, youth, differently-abled, women, Asian Americans, who are under-employed, unemployed, homeless, hungry, uneducated, or mis-educated, like our "brother" Reich, shows that our society has exhausted the utility of capitalist accumulation, from its prehistoric primitive and slave-labor accumulation forms, to its sophisticated monopolistic, binary chip, cybernetic, senile financial futures, stock market/lottery, billionaire take all, or as our W. E. B. Du Bois has written, "universal selfishness" forms.
    To match the enormous productive forces and capacities with the enormous consumptive capacities, rewarding these productive forces to a worthy, ruling, owning, hundreds of millions, is our task, (one which escapes our "brother"Reich), this after centuries of capitalist development and the "fire and blood, in the annals humankind's letters"(as Karl Marx has written).
    Workers need systemic unionization, organization as producers, retirees, and consumers. We need E F C A, Social Security, Medicaid and Medicare, all enlarged and improved along with improved and expanded environmental and ecological protections, along with systemic protections against the capitalist bulwarks, of male chauvinism, war and racism. Moreover, we need these in an international context of our brother and sister workers of the world, to truly complete, in line with what brothers Case and Markowitz have written here, because it's Socialism "..that Better Spreads the
    Benefits of the Productivity Revolution."

    Posted by E.E.W. Clay, 05/22/2012 1:18pm (13 years ago)

  • Wonderful article,John.
    Reich finds himself in the position of some social democrats and left liberals, even the Socialist party leader, Norman Thomas, who denounced the "evils" and "conspiratorial actions" of the CPUSA and then opposed the repressive legislation that was enacted. Richard Nixon, in a debate with one such person in the late forties, won the debate by saying "I agree with everything you say about Communism, which is why I am sponsoring this legislation to remove Communist influence from all organizations."
    Reich is in a sense "red-baiting himself" insofar as he is serious in his critique of where capitalist policy is today. The more he sings the song "I am not now nor have I ever been," the more he finds himself fighting with, communists, socialists and others of the broad left and providing ammunition for the right to both attack the left and him. Who knows, given the kind of right that has been running wild here for three decades, they may even establish an "Un-Free Market Activities Committee."
    Norman Markowitz

    Posted by norman markowitz, 05/18/2012 3:05pm (13 years ago)

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