Are we heading towards socialism? Listening to the rants and raves coming from the campaign trail you might think so. With calls for “The Green New Deal,” “Medicare for All” and “Accountable Capitalism,” congressional Democrats have put forward proposals for greater government authority to monitor, regulate and control large swaths of the American economy. President Donald Trump and his supporters are railing against “creeping” socialism.
Though few are promoting classical socialism, namely government ownership of the means of production, the far left is advocating greater control over the private sector by the federal government. Many candidates for the Democratic nomination for president, notably U.S. senators Elizabeth Warren and Bernie Sanders, are advocating a form of socialism similar to social democracy where government intervenes heavily to redistribute the fruits of capitalism through progressive taxation, transfer systems and government entitlements.
Recent polls suggest that socialism is no longer viewed as antithetical to the American way of life, with a majority of young Americans more comfortable with socialism than capitalism. Despite their current infatuation with socialism, the left wing should remember the successes of American capitalism. Over the course of our history, competitive capitalism has been shown to be the best way to grow the economy, create jobs, and advance the general welfare.
However, unfettered capitalism can uproot both businesses and lives, leaving many behind as evidenced by income inequality and wealth disparity. Yet, the vibrancy and magic of capitalism is not incompatible with a strong social safety net, and our economic system has been enhanced by social insurance, progressive taxation and welfare programs.
The continuing success of American capitalism is evidenced in our country’s robust job creation, which is the envy of the world. Over the past 10 years, the U.S. economy has created 29 million jobs, equal to all the jobs in France! Today American employers are advertising more job openings than there are job seekers.
According to a recent report by the Wall Street Journal entitled “The Great Jobs Machine,” every group of Americans, is finding work, includng women, racial minorities, and high-school graduates who are experiencing the lowest unemployment rates ever recorded. The Journal concludes: “The job market doesn’t get much better than this.”
American capitalism deserves great credit for its prodigious job creation which has helped to sustain our companies, our communities and our nation. The American dream is embodied in meaningful, stable, valuable work. More than just providing a living, a job can provide self-worth, respect and dignity. The “universal basic income” being espoused by some on the left wing may not provide these benefits.
Creating jobs is a high — perhaps the highest priority for our nation — and thus must be top of mind for executives and directors. Boards of directors have a big role to play in job creation. Ten years ago, I wrote a D&B publisher’s letter entitled “Job One is Jobs Won,” positing that boards are accountable for building businesses that retain good-paying jobs and create new ones. Given the record number of jobs created, directors should be both pleased and applauded.