The U.S. stock market is a decade into a rally that has seen broad indexes triple in value and generate $30 trillion in wealth. The unemployment rate is 3.8% nationally, and the early caucus and primary states of Iowa and New Hampshire are tied with even lower seasonally adjusted rates of 2.4%. Real annual growth in the gross domestic product was recently estimated at 2.9% for the U.S. in 2018, outpacing other developed economies such as those of Japan and Europe.
Does this sound like a textbook case of pre-revolutionary misery? Not exactly.
To hear the press and some leading Democrats tell it, though, America is on the cusp of a historic transition from capitalism to socialism.
The independent senator from Vermont, Bernie Sanders, is polling well among Democrats and drawing large crowds with an openly and self-described socialist program. Another self-described socialist, Alexandria Ocasio-Cortez (D-N.Y), showed up in Texas over the weekend to pronounce that "to me, capitalism is irredeemable."
The Real Clear Politics headlines list is sizzling with the capitalism-socialism debate: "American Capitalism is under attack," writes Trish Regan at Fox Business. RealClear has two takes on the question from The New York Times alone: Roger Cohen's "Socialism and the 2020 American Election," and Bret Stephens advising that "Capitalism shouldn't be a dirty word." Writes Cohen: "A 21st-century American election is about to be fought over socialism. Amazing!"
As someone who a decade ago founded a website called FutureOfCapitalism.com, I can't say that I didn't see this debate coming. A decade ago, though, the unemployment rate was 9 or even 10%, and U.S. stock market indices had declined by more than 50% from their peaks.
Back then, Nobel-prize-winning New York Times columnist Paul Krugman was advocating nationalizing the banks, and President Obama was pushing a major government expansion of the federal government's role in the health care industry.
My concern had always been that it would be an economic downturn that would trigger socialism, the same way the Great Depression unleashed big government programs as a response.
Socialists, though, see virtually any economic condition as paving the path away from capitalism. In bad economic times, the population rebels against the system that can be blamed for having led to deprivation. And in good economic times, the heightened inequality means that class tensions are heightened, as soaring visible wealth stokes envy and resentment.
It may be that the danger of socialism is greater in good times than in bad, because in good times, people are susceptible to the illusion that the country can afford socialism.
Our current system is sufficiently mixed that when someone tries to credit capitalism for our present prosperity, it's inevitably pointed out that businesses and employees have benefited from government programs.
American socialists tend to stop short of advocating outright communism, just as American capitalists tend to stop short of advocating full-blown laissez-faire libertarianism.
Too often, though, the word "socialism" is just camouflage that avoids the more specific policy proposals. It hides the answers to more important questions, like, "what else, precisely, would you put the government in charge of that it isn't in charge of already? How much would that cost, and how would you pay for those new activities? And what makes you think that the new activities won't have their own unintended consequences or adverse effects on incentives?"
Likewise, those presenting themselves as defenders of capitalism might be asked what specific government programs, if any, they'd privatize, eliminate, or otherwise put out of business.
Without these specifics, the socialism-capitalism debate risks getting stale, or highly abstract and philosophical. When a debate's been going on this long, it's a good indication that it has less to do with empirical conditions in the economy, and more to do with underlying, pre-existing values and beliefs about wealth, property, opportunity, and equality.