The REAL Socialists are the "1%"

Donald Trump and his GOP enablers would desperately like to paint Joe Biden and the Democrats as wild-eyed radicals who want to turn the United States into a “socialist” or “communist” state, like Castro’s Cuba, China or Russia. The claim is ludicrous.

Ironically, the “real” socialists, to the extent we have them here in the United States, are the so-called “1%” at the top of the economic pyramid. The essence of socialism, in a modern context, is allowing someone to have enormous “upside” opportunity while shielding them from any of the “downside risks” of capitalism if they fail. It is primarily the CEO class and other super-wealthy who have shielded themselves from these risks through corporate and political cronyism. CEOs routinely sit on each other’s boards and set each other’s pay, without regard to supply-and-demand or other economic norms that would determine executive pay in an arms-length manner. With “golden parachutes” guaranteeing them millions of dollars in severance even when they fail, CEOs have rigged the rules of capitalism so they enjoy all the upside and none of the downside. This is why CEO pay has skyrocketed into the tens and even hundreds of millions of dollars over the past four decades.

Ordinary people, who have to live with the constant risk of losing a job without the benefit of a golden parachute, when that CEO decides to close the plant and move it overseas, are the real capitalists. They understand how capitalism works and have to live with its consequences. Despite that, they support it, because they have seen over the course of many generations how our economy grows and rewards those who are diligent and hardworking.

Few Americans understand economics or history, and most are unaware of what terms like capitalist, progressive and socialist really mean. Republicans would prefer they remain ignorant, so they can continue to paint vital and reasonable Democratic proposals as “radical” and “socialist” or even “communist.” The Democrats are proposing essential programs that provide a level playing field so all Americans can participate in our capitalist economy. These include healthcare, education, food and family support, along with equal access to job markets and a fair, color-blind justice system.

There is a name for programs that essentially “keep capitalism honest” and ensure the economic playing field is relatively level for all participants. The programs and the politicians who support them are called “progressive,” not “socialist” or “communist” or the other labels the GOP would like to attach to them.

Capitalism, if left to its own devices, always tends to go too far, in terms of the “winners” using their wealth, power, and political position to give themselves unfair advantages over the “losers.” Throughout history we have seen child labor, sweat shops, unregulated stock markets, unbridled pollution, price-fixing and monopolistic practices, conflict of interest-ridden pay practices for CEOs, corporate domination of political funding, and a host of other practices that end up (1) skewing the distribution of income and wealth beyond what a truly free market would dictate, and (2) destroying the credibility of capitalism itself in the minds of many voters.

That’s why progressives, like the Roosevelts of the early 20th Century, Harry Truman and Lyndon Johnson, or today’s Barack Obama, Joe Biden, Elizabeth Warren and other Democrats, continue to save capitalism from itself by introducing those features like healthcare, education, protection of the rights of women, minorities and the LGBT community, and concern for other critical values that tend to be ignored if left to a totally “free market.” Progressives ensure that the benefits of a capitalist economy actually accrue to the entire country and not just a small portion of it, thus preventing the rise of what would be truly “radical” alternatives of the sort we have seen in other countries, like Russia or China, or Germany in the 1930s.

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Steven Bavaria, a former executive of Bank of Boston and Standard & Poor’s, is the author of Too Greedy for Adam Smith, about excessive CEO pay practices, and The Income Factory. He lives in Boca Raton, Florida and is a graduate of Georgetown University and New England School of Law.