“The weeds of socialism are better than the crops of capitalism.” —Chairman Mao Zedong
Bernie Sanders won Santa Cruz County primaries twice and now Ocasio-Cortez, Mandami, El-Sayed and Flanagan gain power. DSA friendly candidates threaten moderate Democrats and independent votes enough to give MAGA a fighting chance in November. Democratic Socialists of America claim 95,000 members.
Would socialism look more like DSA dreams, Republican nightmares or Nordic compromises? With threats from right and left, can personal financial planning survive?
The DSA Program
In “What is Democratic Socialism,” the DSA proclaims: “We want a democracy that creates space for us all to flourish not just survive and answers the fundamental questions of our lives with the input of all. We want to collectively own the key economic drivers that dominate our lives, such as energy production and transportation.”
On the site program.dsausa.org, the DSA shamelessly prophesies: “You work as much as you are able and no more than needed…You have no debt. You don’t need health insurance. You don’t pay a mortgage or have a landlord, because comfortable housing is a human right. Your retirement is publicly funded. Food, education, energy, medicine, and transportation aren’t for-profit businesses; they are common goods and utilities.”
DSA would “Expand public resources to support recreation, learning, and social spaces accessible to all.” Sustainable publicly owned transit and energy replace fossil fuels. Investment, insurance and estate planning here is a question for government, not individuals.
Mao’s Ideological Purity
The spectre of Maoism transformed Chinese agricultural society down “the road of socialism under the leadership of the party.” So government controlled not only politics and religion, but production, borders, the arts and education. Peasants ate from common kitchens and married according to party needs. Individuals couldn’t even plan their daily dress.
Estates of landlords — even poor landlords — and entrepreneurs were confiscated. Seized housing guaranteed housing “rights.” There were no stock or insurance markets and security was greatest for peasants who denounced neighbors publicly and worked harder and longer even when government horribly mismanaged steel production with backyard furnaces. To collectivize agriculture, the party appropriated food to starve tens of millions.
Nordic Socialism?
In UN World Happiness Reports, Nordics rank the happiest people and surely honest democracy, subsidized education and healthcare contribute. Unicameral legislatures and proportional representation model the DSA’s critique of America’s independent presidency and judiciary. Roughly 30% of the people work in health care, education and government and workers are highly unionized with government settling disputes. Unemployment insurance and government childcare are regular.
But Deng Xiaoping brought markets back to China and the Swedish Social Democrats deregulated banking and currency in the 1980s. The financial crisis of 1990-94 resulted in deregulation. Socialists beware: Swedes get vouchers for educational choice and save in subsidized mutual fund accounts.
Scandification.com says: “Sweden is a highly liberalized and competitive open-market economy. The country happily trades with countries all around the globe. Most Swedish enterprises are privately owned and pay quite low taxes compared to other parts of the globe.” The Heritage Foundation’s Index of Economic Freedom ranks Sweden ahead of the United States!
Questions for Socialists
What happens when socialism meets Amazon.com variety with bleak lifestyle choices? Canadians already venture abroad for delayed healthcare and Moscow bread lines were infamous. And we don’t all enjoy paying for solar panels on dull housing projects. F.A. Hayek says that the task of providing for everyone’s needs or wants while knowing all the human and natural resources is too much for any planning committee without the invisible hand of pricing. Mandami is already challenged delivering free buses.
Poor worker motivation challenged Mao to lead constant rallies with art glorifying low-paid production — not short work and environmental purity. The DSO admittedly seeks “…aggressive wealth taxes on the richest individuals and corporations to spend on public goods and infrastructure.” Nordic countries tax over 40% of GDP versus OECD averages of 33.9%. Like our income tax, burdens start with the rich, but El-Sayed admitted that “you paid a little more in taxes” for free healthcare.
Planning is impossible in Maoist China where planners would be lynched. Sweden’s welfare state hosts CFPs and tax planning with market investments flourishes. If Socialism — or Fascism — conquers America, we won’t have so many choices.
Robert Arne, EA, CFP, MS, of Carpe Diem Financial Life Planning, gives holistic financial advice as his client’s fee-only fiduciary. He serves mostly Santa Cruz Mountain dwellers. These articles must not be read as personal financial, mortgage, tax or investment advice; consult appropriate professionals. Learn more at www.carpediem.financial.
