Even after the overthrow of over-centralized planning in China in 1978 under Deng Xiaoping, and the destruction of the Berlin Wall in 1989, socialism still plays an important role in economic thought. After all, the success of mixed economies such as Finland and Denmark speak for the potential of socialism as an economic system.
The form of socialism native to the United States is called democratic socialism. It has held credence with famous figures throughout history, such as Albert Einstein and Martin Luther King Jr. Its credibility today is upheld by the presence of Bernie Sanders, a self-avowed democratic socialist, in the list of 2016 presidential candidates.
Origins of Democratic Socialism
Free Market Liberalism
The basic concept of free market liberalism, or capitalism, is founded on the Invisible Hand theory of Adam Smith. Basically, according to Smith, demand and supply of goods and services would dictate price and production. There was no or little need for regulation. However, it resulted in great income inequalities, as those who became wealthy under the system took steps to block the free market and maintain their wealth.
Soviet Model of Socialism
After the overthrow of the Tsars in Russia, and the Bolshevik Revolution in 1917, Vladimir Lenin began the second phase of Communism. He nationalized all industries and public goods such as education, and instituted central economic planning. This resulted in gigantic oil and steel production, but also in a level of non-competitiveness and economic stagnation. The use of centralized planning for military might also made the economic system suspect.
Concepts of Democratic Socialism
Democratic socialists realized that capitalism and central planning have one thing in common. Both economic systems could be used to unfairly oppress the working-class. With this in mind, they took concepts from both democracy and socialism.
The Democratic Side
A politically democratic society ensures that each individual still has his own rights and voice in society. A democratic society empowers the working class to speak, organize, and lobby on their own behalfs. In democratic socialism, political democracy lays the foundation for the individual to have the political power needed for them to take part in corporate decision-making.
The Socialist Side
Socialism and its more extreme form, Communism, have always had something to do with public ownership. In democratic socialism, the socialist side requires that ownership or at least regulation of the economy should be with the working class and the corporations. In that way, planning and decision-making is conducted by all the concerned members of society. In this kind of society, cooperatives and unions are usually supported.
Democratic Socialism in the 2016 Presidential Elections
Bernie Sanders, who won as an Independent Senator, is running on the Democratic ticket as a Democratic Socialist. In a speech outlining what he wants to accomplish in the nation, he explains that government ownership of all means of production is not in his plan. What he wants to do is raise taxes on the wealthy, and fund multiple programs that give social opportunities to the middle-class.
Democratic Socialism: A Controversial System
Democratic socialism is mainly controversial because it has many definitions. Capitalist and centrally planned economies have defined themselves through history. However, the viability of democratic socialism is incredibly successful in very few societies, such as Denmark and Finland. If America does become democratic socialist, it will add a better concept of how socialism works in a nation that has always been a democracy.