Why Socialism and Why Now? (And implications for white-collar workers)
Updated: Feb 1, 2021
A few days ago, I read about a true story on Twitter that apparently happened in the 1970’s. The story detailed what occurred with a Hispanic employee at a large food corporation.
This employee worked as a janitor in a food production plant, earning $4 per hour, but he was not an ordinary employee. He spent extra time to learn as much as he could about the company and that plant. He asked the sales manager if he could, on his own time, unpaid, accompany him to make sales calls on customers. He took extreme pride in everything he did at the plant. He became very knowledgeable about all the company’s food products and how they were made.
During a tough period at the company, the CEO sent a communication to all employees asking them to take more ownership in the company and ‘to act like you owned the company’ and to think about how the company could improve. He went so far as to let them know that if they had a good idea that they could not get implemented, to let him know.
The janitor found the phone number of the CEO and called him. The CEO had no idea who he was, but the janitor told him that he had a great idea but that nobody would listen to him. The CEO asked him to come up with a documented presentation of the idea, and that once he did, the CEO would call him and they would talk about his idea.
The janitor did what was requested, and a few days later, found himself on the phone with the CEO going through his presentation. His idea was that the company (famous for snack foods) should come up with a product line to appeal to the Hispanic community, and that there were hot spices that could be combined and added to the snack foods to make them tastier and more appealing to Hispanic customers. Wind the clock ahead, and 10 years later, this janitor had been promoted over the years and became a VP, his idea for a new product became a smashing success, and through his career, he amassed a fortune of close to $20M through compensation and bonuses.
It was a nice story, I thought, and was full of valuable lessons such as ‘take pride and ownership’, ‘work hard’, ‘come up with ideas to improve your company’, ‘if you believe in something, push your ideas to a conclusion’, etc.
Unexpected Reactions
Since this story was on Twitter, it was easy to read the comments from others. I would say a majority had the same reaction as I did, saying favorable things.
But I was shocked at how many people slammed the story as being impossible in today’s world, and that capitalism today is failing most in our population.
Without quoting individuals, here are my extracts of some key points that were made against our system of capitalism:
1 – Had the janitor been paid a living wage, he might have become a prolific inventor. The story proves that capitalism places barriers on impoverished individuals. Had he been represented by a union, he could have been even more successful.
2 – The story celebrated the wealth of the janitor, instead of asking why the janitor did not contribute most of his $20M to other janitors to help them live a better quality of life.
3 – This story could not occur today. Corporations would likely steal the janitor’s idea and someone in management would take credit for it. The American dream today is ‘such a lie’.
4 – Most companies today ‘don’t give a damn’ about their employees. For every success story like this, there are thousands of stories where the employee has their idea stolen and they get sued by their employer if they challenge it.
5 – 99% of people die in the same class to which they were born. There is no American dream anymore.
After digesting these comments, it struck me why, suddenly, in the last few years, socialism is in the news more and more, and a group of political progressives are espousing the virtues of socialism as well as democratic socialism, and are slamming the shortcomings of capitalism.
If this many people were saying these things about a single article, then that sentiment had to be much more widespread in the U.S. than I ever imagined.
What is Going On?
So, I began to research the views today of capitalism and socialism relative to our past, and to better understand what other countries have tried socialism or are living with socialism today.
As I began to read more about this, my Boomer background pre-conditioned me to anticipate that I would find out that socialism is having a small spike in popularity due to some political candidates in 2016 and 2020 espousing free college education and free health care for all. Wrong, Boomer!
Here is the surprising summary of what I found out about the sentiment of Americans, based upon surveys conducted by respected firms:
. College-aged Millennials have a positive view of socialism (58%), versus a 56% positive view of capitalism. Contrast this to those over age 55, where only 25% have a favorable view of socialism. Americans who are older increasingly think negatively about socialism, and younger Americans think more positively about socialism.
. Most Americans cannot define well the specifics of how socialism works, in contrast to capitalism. What does correlate, however, is that those Americans who tend to understand the specifics of socialism and democratic socialism tend to have more negative feelings about them. Those who cannot define the specifics of either tend to be more positive about them.
. About 50% of those under age 39 have a favorable view of socialism, and about 50% of that same age bracket also have a favorable view of capitalism. Think about that for a moment; for those under age 40 or so, socialism is thought of just as favorably as capitalism!
For a Boomer, this is just incredible to understand, since when we grew up, socialism and communism were considered to be ‘evil forms of governing’.
Then I remembered something that I realized when doing research for my book (Changing Collars: Lessons in Transitioning from Blue-Collar Roots to White-Collar Success) a few years back.
What I discovered in my research, when looking for causes of changing values in the workplace, was that the mix of television programs, movies, streamed events, etc., today is very different compared to when I was growing up in the 60’s and 70’s, and different specifically related to the income levels of the characters in these programs.
Today vs. Fifty Years Ago
I found that today, you cannot find many, if any, programs that show average Americans working in a ‘normal’ job earning ‘normal’ wages.
I think back to my youthful days, when there were so many sitcoms and movies about the typical American family dealing with normal everyday problems. In these shows, the parent or parents worked in average-paying jobs, either as plumbers, electricians, office managers, engineers, barbers and beauticians, restaurant owners, teachers, police, firefighters, etc.
The families were generally not wealthy. Their stories dealt with a variety of issues, from managing their financial resources as best they could, children that wanted more than the family could afford, parents teaching their children that honesty, hard work, saving, taking care of what they had, helping around the home, etc. were values and habits that would serve them well in later life. There was some excellent humor, but most shows tended to end with some sort of lesson to learn for viewers.
I don’t recall any of these programs ending with someone in the family winning the lottery or winning a game show and becoming a millionaire. Nor do I recall any shows or stories then about becoming a realtor in large cities selling multi-million-dollar homes, or a program about millionaire housewives visiting spas or sitting around talking about their new jewelry, homes, cars, vacations, etc. I don’t recall movies where Wall Street executives became multi-millionaires overnight selling stocks, and behaving like idiots while spending lavishly on office parties, fast cars and huge homes.
I don’t recall watching a show about helping millionaires find a mate through a dating service only serving millionaires. There were no reality shows that covered the actual family lives of millionaires as they flew on their private jets, relaxed at the pool or winery, sipped expensive drinks, or had surgical procedures done to improve their appearance.
There was no coverage of teens or young adults making videos that ‘went viral’, making them stars apparently overnight, at least for a few weeks or months. (of course, this was the 70’s when there was no social media!)
I don’t remember sports stars signing contracts that overnight made them worth hundreds of millions of dollars. I also don’t remember sports fans being interested in the political views of the highest-paid sports stars or movie stars for that matter.
There seems to be many more examples of ‘get rich quick’ stories in our media today, and far too few examples of someone working hard and taking pride in their work over perhaps a lifetime, and gradually earning a comfortable financial situation via saving, investing in themselves and improving their skills, gaining more responsibility in their careers, etc.
Growing up, I cannot remember watching movies about grisly murders, or movies about wild bachelor and bachelorette parties where hotel rooms and cars were totally trashed due to alcohol or drugs. I don’t remember where sex was glamorized as much as we see today in programs and movies.
What is the Message Today?
Somehow, some way, over the past several decades, via TV shows, movies, magazines, newspapers, and social media, it appears as though our society is sending the message that if you cannot see your way to becoming extremely wealthy, that your life is not interesting or worthwhile. The message seems to be that if you are ‘stuck’ in a humdrum job, the ‘system’ is screwing you over, and you deserve much better. In effect, I get the sense that the message is “Only suckers work menial jobs making average wages.” A side message seems to be that what is on the outside that people can see, is more important than what is on the inside.
What About Businesses and Private Enterprise?
Over time, it seems that the businesses that provide solid products, services, jobs, employee healthcare, community investments, etc., are beginning to be seen as the villains. The story goes that these large company executives underpay and overwork employees, steal, cheat, collect excessive paychecks and bonuses, while ruining our environment.
Somehow, we have transitioned from a culture that valued these companies and the good-paying jobs they provided, to one that seems to seek as many negatives as possible in any business success.
Clearly, some of this sentiment likely derives from real examples of companies which were poorly run or which had few if any ethics. Perhaps the parents or grandparents of the younger generations had negative things happen at the hands of their employers, such as layoffs, downsizing, shutdowns, divestitures, etc., and this generation may remember those events all too well.
However, the reality is that no company is guaranteed success, and due to competition, changes in consumer preferences, cost escalation, or price erosion, companies many times have to take actions in an attempt to survive, or to satisfy shareholders. These actions can result in negative impacts for employees. No company can afford to pay exorbitant wages if they are barely scratching out a profit, even if they wanted to. If a company sees itself going out of business without making substantial changes, who can blame the leaders for making those changes?
However, I would hypothesize that much of this anti-capitalist sentiment comes from the thousands of hours of programming, movies, social media, and publications that are watched or read across our country every day, every hour, every minute.
Other Potential Causes
Are there other causes of this increasing positive focus upon socialism?
I am not sure, but probably. Some blame our university system (which by the way is viewed around the world as the best advanced education system anywhere) for increasingly supporting a more liberal progressive agenda and for educating about the positives about socialism and communism. I am no longer a student and cannot confirm this, but there seems to be general agreement that there has been a shift over the decades towards universities supporting more leftist views than conservative views.
Some blame this on the failing family structure in our country, where the younger generations have statistically seen less stability in their family structure and therefore, perhaps, less trust in our overall capitalist system.
Some blame the reduced focus upon religion across America. Some blame parents and grandparents of my generation for giving their children and grandchildren ‘everything they wanted’ without forcing them to work and save for what they needed or desired. My generation is also blamed for rewarding their children for participating versus winning; i.e., ‘everyone gets a participation trophy’, and not teaching this generation how to lose with grace.
Outcomes
Whatever the causes, and it is likely there are many, the most dangerous outcome is the mentality of a portion of the younger generations that seems to lack optimism or hope within our capitalist system to better their lot in life. Without hope and dreams, why would anyone work hard to succeed?
And without hope and dreams, under any economic and social system, it is all too easy to fall into the mindset that you should do the bare minimum to get by, because in your mind, extra effort will not result in anything better.
Once someone adopts the ‘do the bare minimum’ mentality, government support programs become even more attractive. Suddenly, free college education, lower taxes for lower wage-earners, free health care, richer programs for things such as rent and food assistance, government ownership of more and more assets, less private enterprise, etc., seem like great solutions for those who see the positive implications of these and other changes for their particular stage of life. And for this group to realize additional gains, the government must spend more to provide more.
Initially, socialism might appear as a better system, where the redistribution of wealth from rich to poor sounds like a great system for the poor. Centralized government planning for everything sounds like a much more equitable and fair way to get things done. (Yes, the way socialism works is that the government takes control of primary industries and companies and runs them!)
The theory is that everyone shares, everyone eventually will realize a similar standard of living, the lower levels of society are lifted, and the higher levels of society see their standard of living fall and their assets taken away. But for socialists, this re-distribution of wealth is proper and what the wealthier deserve, even though they may have made significant sacrifices in their lives and made risky entrepreneurial investments to succeed.
It may appear to some that socialism creates this huge safety net to take care of everyone, leaving nobody homeless or without food or medical care.
But there are a variety of history lessons about what can happen under a socialist system. The countries of Cuba, Venezuela, Brazil, Greece and some Scandinavian countries are written about frequently. I encourage everyone to read about these countries and their stories surrounding socialism. Depending upon the author, there are different twists and explanations, but it is worth the time to do some reading.
Clearly, there are dangers, and it would appear few true successes. I found this short video about the history of Brazil over the past 20 years, just as one example. There are many more available about all of these countries.
The pattern seems to be that socialism begins OK, then citizens demand more governmental assistance and programs since it seems to them as though they are not paying for these programs, just the wealthy are. So, the government, to stay in power, tends to yield to these demands, and spends more on these programs, increasing taxes on the wealthy and borrowing more via government bonds. Minimum wages are increased because the masses demand this.
At that point, given so much free money, currency devaluation begins, and the buying power of the masses falls, creating the poverty that socialism was meant to eliminate. Large companies begin exiting that country due to excessive taxes, jobs depart the country, unemployment increases, and more government assistance is needed. The wealthy begin to take action to move their financial assets offshore to avoid the higher tax rates, or to consider moving out of their home country. This forces even higher taxes and more currency devaluation. Many economies cannot recover, or perhaps they are damaged to the point that it takes decades to recover under a different system.
Just One Opinion
I do not claim to be an economic expert nor an expert about socialism, or even ‘democratic socialism’ which is supported by some on the political left today. But as someone who grew up in a relatively poor blue-collar family, in a capitalist country, I have learned a lot about private enterprise in my 45 years working a variety of jobs.
Here are some of the things I have come to realize about a capitalist system:
1 – Hard work and determination pay off. It may take years or decades to realize the fruits of a consistent mindset of working hard and focus, but with few exceptions, those individuals are rewarded who are willing to do a bit extra. Those not willing to work hard, or to work at all, can get left behind or see fewer of the fruits of labor.
2 – Those who genuinely care about helping their employer succeed, do much better in the long run that someone who only cares about maximizing what they get (pay, benefits, rewards, etc.) from their employer.
3 – As much as white-collar managers and executives are described negatively in way too many movies and books and TV shows, the reality is that the great majority (I would estimate well over 99%) are exemplary people doing excellent work. Those being managed by these leaders are the same. People dedicate their lives to improving themselves and their companies, take great pride in their work, work effectively on teams, and are responsible for products that are much, much better than products from even a decade ago. Services have also improved by leaps and bounds from decades ago. Today, you can get so much done as a consumer on the internet, when it is convenient for the consumer. All working within our American system have the incentive to keep improving, to both solidify their job security, but also to gradually improve their financial lot.
4 – Anything provided for free is not appreciated as much, and typically results in inequities, waste, and feelings of resentment. For instance, if we started to provide free college educations, would you see students working part-time jobs to offset the cost of education? Would students truly appreciate their college educations and study diligently, when they were free? Would you ever see a student settle for a lower-level or regional university education, when they could attend a premier university for the same cost? (i.e., free) Some countries provide not only free education but stipends in housing and food allowances, and have subsequently been deluged with ‘career students’ who never leverage their education into a career, but who continue to study and collect subsidies and earn higher levels of degrees.
5 – Innovation and risk-taking only occur as much as they do in the U.S. because there are potential (but not assured) financial rewards for those who succeed. Under a socialist system, If the government takes over most primary industries, who will risk capital and personal effort to innovate if there are no personal financial rewards? How will the government innovate under a system where everyone gets the same, and is treated the same? Most stories I have read about socialist countries indicate that innovation dies and investments evaporate.
6 – The combination of working smart, continuous improvement, and an empowered and educated workforce, is a tough combination to beat! Competition forces organizations to keep improving, becoming more efficient, and continually innovating. Competition is a hallmark of capitalism. With centralized government ownership and planning, competition generally is avoided because government planners do not have the time or dollars to setup and fund competitors within the same industry. True, global competition can and does occur in socialist countries, but socialist governments tend to build obstacles to global trade to protect their state-owned companies.
Conclusions
As someone who has been successful working in a capitalist system, I am clearly not a neutral observer of the pros and cons of socialism vs capitalism. I firmly believe that what we have built in this country, with all its warts and problems, is the envy of the world. We have millions of people around the world outside the U.S. doing whatever they can to either live in the U.S. or to get an education here, with the possible outcome of becoming a U.S. citizen.
Why would that be the case unless we have an admired system?
After travelling to just about every part of the world during my career, I can attest that many Americans take too much for granted here. We can afford many things here that others cannot within their systems. We enjoy 99.9% uptime of electrical power and the internet, our water is generally clean, our air is generally clean. Our food is healthy and inspections of food processing plants are frequent. Our streets are maintained, our freedoms are legally protected; we can generally say what we want and do what we want unless they violate others’ rights or safety. Our police, fire and military protection are often taken for granted; we just assume they will be there at all times if needed. Our transportation systems, although aging in some areas, are the envy of the world.
Is it a perfect system or country? Cleary not, but from what I have seen, it is a darned good one!
Does that mean that socialism is terrible and that we should work against it?
I am coming to the realization that this ‘socialism initiative’ is not going away. Boomers like me cannot just ignore this any longer. It is time to get educated, to read, to engage in the discussion and debate and understand what is going on with the other generations. We can all learn something from recent trends, but ignoring what is going on will not help.
All generations need to be talking to one another so that we can learn. It does no good for boomers to talk to boomers and complain about socialism and democratic socialist candidates. Gen Zers and Millennials talking to one another about how Boomers have screwed up the planet and our country, will not have any ability to change the views or understanding of Boomers without engagement with them.
I wish I had more complete and accurate answers to why opinions have changed so rapidly in our country about capitalism and socialism. I wish I had a proposal to make modifications to our capitalist system that would improve what we have, without destroying the fundamentals of capitalism that have made us successful. But I suspect this will continue to emerge as a critical issue for the future of our country and the future of our citizens.
The only constant in life is change, and I suspect there are aspects of our capitalist system that need to change (as it has changed since our beginnings) so that we can adapt to what is driving the interest in socialism in our country. Adaptation cannot occur without learning and understanding. Let’s get to it!
Parts of this article were excerpted from several chapters in my new book “Changing Collars: Lessons in Transitioning from Blue-Collar Roots to White-Collar Success”.
(Daniel Muller is a business executive, expert on white-collar culture and soft skills, and author. To learn more, to contact him, to purchase the book, or to sign-up to his subscriber list, visit his website.)
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This best-selling book has hit #1 on his publisher's website in non-fiction. He has spoken to corporations, professional groups, students and clubs about this and other business topics, and is available for podcasts, team or individual consultations, seminars, and speaking engagements, including corporate training programs.
