A specter is haunting business—the specter of millennial socialism.
No I’m not channeling Karl Marx, Friedrich Engels, and the opening line of their Communist Manifesto, which appeared 170 years ago. I am channeling a cover story in The Economist, which appeared last week!
“Socialism is storming back because it has formed an incisive critique” of business, the article warned. And most newly awakened socialists are young people: More than half of Americans aged 18-29 have a positive view of socialism, according to Gallup, while only 45% have a positive view of capitalism. “Socialism’s renewed vitality is remarkable,” the magazine concludes, with a mix of admiration and trepidation.
It’s one thing for a single magazine to make such a provocative argument. But the socialist specter is haunting longtime pundits and would-be politicians alike. Political analyst Fred Barnes recently warned in the Wall Street Journal that “Socialism may not define the new era, but neither is it likely to fade.” That same angst seems to be at the heart of the nascent presidential campaign of Howard Schultz, the former Starbucks CEO. Asked why, during his days as an executive, he turned down a campaign-contribution request from Senator Elizabeth Warren, he told the Washington Post: “I don’t believe the country should be heading to socialism.”
Executives and investors have so far mostly watched this discussion nervously from the sidelines. But business doesn’t operate in a vacuum, and all this talk of socialism is a sign of the breadth and depth of dissatisfaction with rising economic inequality, declining social mobility, and accelerating climate change. It’s hard to maintain a booming economy and a rising stock market amidst bitter social divisions and angry political discourse.
Which is why all sides would benefit from ending the socialism sideshow sooner rather than later. On the left, with due respect to Eugene Debs, Norman Thomas, and Bernie Sanders, European-style, means-of-production socialism has had no real standing in the American vocabulary. Meanwhile, on the right, “socialist” is just the latest (and most convenient) label to denounce ideas with which conservatives disagree. But words matter: Executives and investors can’t reckon honestly with the defects of the economic system they helped build (and benefit from), and can’t figure out how to make the system more legitimate to more people (especially young people), if they can’t rise above rhetoric that bears no relationship to reality.
So forget capitalism versus socialism. The more revealing debate for business, the issues executives and investors have to struggle with, is why and how, in the language of renowned Harvard philosopher Michael Sandel, we have “drifted from having a market economy to being a market society.” In other words, has the logic of profit and loss, winners and losers, insinuated itself so deeply into all aspects of society that we have eroded the sense of shared experiences and common bonds that once held together people of different means and backgrounds? Have we become a culture that knows the price of everything and the value of nothing? When the unforgiving logic of Wall Street occupies Main Street, when everything has a price, do we create divisions we can’t afford?
Sandel explored these questions a few years ago in his book What Money Can’t Buy—and his distinction between a market economy and a market society feels more urgent than ever. A market economy, he explains, is “a valuable and effective tool for organizing productive activity.” A market society “is a way of life in which market values seep into every aspect of human endeavor. It’s a place where social relations are made over in the image of the market.”
Consider just a few modest snapshots of a “market society” at work. We now have “members only” lines at movie theaters that allow customers (who pay $23.95 per month) to skip the wait for popcorn and mozzarella sticks. There’s a Fast Pass lane to see Santa at the shopping mall. At airports, it has become routine for affluent travelers to stand in TSA lines that move faster than the lines for the vast majority of passengers. The truly rich don’t just skip the slow lines, they fly private. Why should they care about the decrepit conditions of America’s airports?
In Minneapolis and other cities, according to Sandel, commuters can pay a steep daily charge to use the car-pool-only lane, even when they are driving by themselves. So policies that are meant to encourage civic-minded use (car pooling) of a public resource (roads) are instead turned into a fee-for-service opportunity for well-to-do commuters to get to work faster.
Even in jails, Sandel chronicles how a number of cities allow nonviolent offenders to pay a fee to upgrade their prison cells. In Santa Ana, California, he reports, $82 per night gets you “a clean, quiet jail cell away from the cells for nonpaying prisoners.” Crime may not pay, but if you can pay, jail is more comfortable.
These are small examples of market-driven ideas to generate incremental revenue in struggling fields (movie theaters, malls) or for cash-strapped government services (airport security, the prison system) that, when piled one atop the other, begin to pull at the social fabric that holds us together. Sandel calls this phenomenon “the skyboxification of everyday life”—the gnawing sense that the most fortunate among us sit high above the vast majority, insulated from their worries, struggles, and headaches. In other words, there is more to this era’s deep-seated unease than whether wages at the bottom of the scale will ever rise (they are, glacially), or whether a ten-year economic expansion will finally begin to close the wealth gap (it hasn’t). There is a recognition that as the laws of economics infiltrate the shared experiences of everyday life, the promise of “E pluribus unum” is giving way to the reality of, “This entrance is for VIPs only.”
As the legendary economist Arthur Okun observed in his masterwork Equality and Efficiency, a sustainable society “strives for balance: giving the market its place and at the same time keeping the market in its place.” So executives and investors who expect people, especially young people, to recognize the unrivaled capacity of capitalism to create jobs and generate wealth must themselves recognize the line where capitalism ends and the common good begins. As Michael Mandel notes, “Democracy does not require perfect equality, but it does require that citizens share a common life.” To sustain the virtues of a market economy, it’s time to reckon with the unsustainability of a market society.