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Would Democratic Socialism be Better?

Summary:
I’ve just received a copy of Lane Kenworthy’s latest back Would Democratic Socialism be Better (Shorter LK: “capitalism, and particularly social democratic capitalism, is betterthan many democratic socialists seem to think”). The book is a follow-up to his Social Democratic Capitalism, which made the case that the USA would be better off moving to a Nordic model of social democracy. I’m hoping to make a longer response soon, but I thought I’d begin by summing up the argument as I see it, and the reasons I’m unconvinced. The way Kenworthy approaches the question is, I think, bound to lead to a negative answer. Since we haven’t had any experience of anything that could really be called democratic socialism, as opposed to social democratic capitalism, it’s hard to make any

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I’ve just received a copy of Lane Kenworthy’s latest back Would Democratic Socialism be Better (Shorter LK: “capitalism, and particularly social democratic capitalism, is better
than many democratic socialists seem to think”).

The book is a follow-up to his Social Democratic Capitalism, which made the case that the USA would be better off moving to a Nordic model of social democracy.

I’m hoping to make a longer response soon, but I thought I’d begin by summing up the argument as I see it, and the reasons I’m unconvinced.

The way Kenworthy approaches the question is, I think, bound to lead to a negative answer. Since we haven’t had any experience of anything that could really be called democratic socialism, as opposed to social democratic capitalism, it’s hard to make any stronger response than “we don’t know, but it’s worth a try”.

But Kenworthy puts the burden of proof entirely on the advocates of socialism. The book is full of statements like “ I’m not
aware of a convincing case” and “I don’t see a compelling reason”. Given this general approach, it’s hard to imagine that any radical alternative to the status quo would pass muster.

To get a bit more specific, the central approach of this book, as with Social Democratic Capitalism, is a set of cross-country comparisons between developed capitalist countries, with the USA at one pole, and the Nordic countries, most notably Sweden, at the other (Korea is also included, which tends more to confuse than enlighten, given that it’s an outlier in most of the comparisons, with a minimal welfare state). The problem here is that, while these countries differ radically in terms of the way their health and welfare systems are organized, they all have much the same division between public and private production of marketed goods and services.

In the absence of significant international differences on this score, cross-country comparisons don’t tell us much about whether public ownership of industry is beneficial, harmful or neutral. Indeed, having stated in the introductory chapter that ‘the core distinguishing features of contemporary democratic socialist ideas are public ownership of firms and economic democracy’, Kenworthy barely mentions public ownership in the body of the book, and only as a hypothetical feature of socialism. Nationalization, the archetypal socialist policy, fares worse, not even making it into the index (a search reveals two mentions.)

By contrast with the lack of cross-country variation, the role of public ownership has varied widely over time, reaching a peak around 1970, before being rolled back by the rise of financialised capitalism from the 1980s onwards. The decline of public ownership is correlated with adverse trends in most of the measures socialists would like to consider: inequality, union membership, unemployment, financial stability and the strength of democratic institutions. An analysis with some discussion of the causal relation ships involved would be a worthwhile contribution to the discussion. But when Kenworthy notes these trends, he treats them as natural, if rather mysterious, tendencies of the economic system. A typical quote

Will the rise in income inequality between the top 1 percent and the bottom 99 percent continue? There is no way to know. Perhaps a new development— a deep economic downturn, a shift in political priorities, or something else— will produce another reversal like the one in the middle of the twentieth century. All we can say with confidence is that this hasn’t happened yet.

It seems unlikely that such a shrug of the shoulders is going to convince many advocates of democratic socialism to change their views.

But even if his answer is unsatisfying, Kenworthy’s question is one that needs to be asked, and answered with more than rhetoric. In a subsequent instalment, I plan to attempt or at least start to attempt, an answer.

John Quiggin
He is an Australian economist, a Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a former member of the Board of the Climate Change Authority of the Australian Government.

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