So let's start with the first one.
You can call it "modern socialism" some people call it "democratic socialism".
It has a lot of names but it was that kind we talked about first in the first half of
this program.
Namely, when the government is called in, you leave enterprises in the hands of the
private owners and operators (as you have in capitalism), you leave the market as the
basic institution to distribute goods and services, but the government comes in to regulate
and to re-distribute the wealth, because of the tendencies towards inequality that capitalism
without government tends to show us over and over again.
I think the things I would like to stress there are that on the one hand people in that
kind of a socialist society are usually quite supportive of it.
If you look at the Scandinavian countries and a number of the Western European countries
that are kind of prime examples of this sort of thing, or you look at the image of what
Mr. Bernie Sanders wants for the United States (and he himself refers to Denmark and so on
as models, at least in part) you get the impression that what this means is that working people
have kind of two sources well-being.
On the one hand they work and earn a wage or a salary, and on the other hand they have
a very generous supply of public services made available to them by that socialist government.
If you look in Europe's history (for example Scandinavia, or France, or Germany, or Italy)
you'll see that it was the socialists who pushed for the national health service that
they have, the unemployment compensation system that they have, the subsidized transportation,
the subsidized public education.
These were all ways for the government to come in and make life better for the average
person.
So there's a sense of support for the socialists in those countries and for the socialism they
have, which is one explanation for why it has been so durable over the last century
in which it was established there.
The problem, if you like (and we have to weigh the costs and benefits of all of these), the
problem for this kind of socialism is that it is very insecure.
Let me explain.
If you leave the ownership and operation of enterprises in the hands of private people
then those private people are, in all cases, a very small minority of the society.
They sit at the top of the economic system.
They're the ones who own the bulk of the shares, they're the ones who sit on the Board of Directors,
all of that.
And they are constantly struggling to use those positions they have, which includes
getting the surplus or profits of the society, into their hands to diminish the regulations,
to be free-er, to do things they're enterprises lead them to believe will be profitable.
They don't want to be hemmed in by regulations and they don't want their wealth taken from
them by a redistributive government.
So they begin to push back and they have the incentive but they also have the resources
to push back and so they take away the very socialist benefits that have been captured
in earlier periods of their history, which means this kind of socialism is fundamentals
insecure.
Here's a second problem of that kind of socialism, redistribution: governments that use taxes
to move wealth, at least in part, away from those at the top and spread them that wealth
out more evenly across the society.
This leads to incredible social tensions.
Wherever redistribution happens, that is a result.
I used this example, I'm gonna use it again.
If you take your child to the park, and you have two children, and you take them to the
park and now it's time to get ice cream cones, and if you get the ice cream cones and you
get two of them and you give them to one child and then you say "Oh, this isn't fair.
Let's redistribute" and you pull one cone away from the one child to give to the other,
you're creating a level of tension you would never have had to deal with if you'd given
each child one cone at the beginning.
When we have a government step in to redistribute we invite intense social struggle, intense
social animosities amongst us as a people.
It's not smart.
And that kind of socialism is constantly bedeviled by struggles among people over a redistribution
you would not have if you distributed it less unequally to begin with.