I’m well aware of just how self-impressed I am. It’s because whenever I see someone writing what about what I’ve been thinking, my impression is, “What a brilliant thinker!” That’s what I thought when I saw Branko Milanovic’s article, Did Socialism Keep Capitalism Equal? What he’s getting at is the idea that as long as there was the Soviet empire, capitalists in the west had to be careful. They couldn’t allow inequality to get out of hand for fear that the people would just choose the other side. But now, without the threat of communism, the capitalists are going wild, because, hey, what options do the people have?
Well, there is one obvious answer to that: there was no communism before there was communism. There was no French Revolution before the French Revolution. This is part of a lesson that I’ve been trying to teach conservatives for years. It is hard to find a serious conservative who doesn’t think that FDR turned our capitalist utopia into a dystopian socialism. They just can’t see that what FDR most likely did was save capitalism in the United States. Otherwise, there probably would have been a revolution. And the US would have become a fascist state. (Because let’s face it: that’s where we tend to go as a people.)
But I think that Milanovic is really onto something. The rise of the whole “greed is good” mentality went along with the decline of the Soviet empire. In the 1950s, many people in the US government were worried that the Soviets could win the Cold War because of its centralization of power. It might not be so wonderful to live under, but such a system could — in theory — have been more effective in accomplishing its strategic goals. And that was a valid opinion — especially after Sputnik.
But by the 1970s and 1980s — regardless of the rhetoric of Nixon and Carter and Reagan — everyone knew that wasn’t true. And as a result, the rich grabbed more and more wealth and more and more power. As Milanovic points out, “Now, this idea comes from the fact that rich capitalist countries experienced an extraordinary period of decreasing inequality from around 1920s to 1980s…” But of course, the decline and fall of the Soviet empire is not the only possible reason for this. But I think the union story is hard to refute: the true decimation of unions is not due to skills-based jobs and globalization.
Ultimately, I think that Milanovic thinks that the threat of the Soviet empire (basically: fear of revolution) wasn’t the reason that we saw a decrease of inequality until about 1980 and then an increase. But it is certainly one of the reasons. And it is something that we who are not part of the power elite need to think about. We need something that will keep the rich in line. But the only thing that I can think of is solidarity. And the power elite have been fiendishly good at keeping the rest of us at each other’s throats, rather than focusing on how it is the power elite itself that is keeping us down. It would be sad indeed if we needed another Soviet empire for ordinary Americans to share in the wealth of this country.