Laura Hollis / Feb. 27, 2020

American Socialists Don't Understand American Business

At the heart of the rapidly spreading support for "socialism" in the United States is some pretty profound ignorance about business in the country.

At the heart of the rapidly spreading support for “socialism” in the United States is some pretty profound ignorance about business in the country.

A recent article in Salon is a good example. Last weekend, the online mag published an excerpt from a new book by Micah Uetricht and Meagan Day titled “Bigger Than Bernie: How We Go From the Sanders Campaign to Democratic Socialism.”

The excerpt is riddled with tired and outdated Marxist tropes about the “class struggle” between the “working class” and the “capitalist class” (the workers’ enemy class, according to Uetricht and Day); the need to pit “workers against bosses”; and, of course, the imminent “revolution” — which the authors insist could be bloodless, except that the “capitalists” will put up resistance to any efforts to eliminate capitalism. That resistance “will turn violent,” Day and Uetricht warn, in which case socialists will be justified in using self-defense.

Uh-huh.

The writers are stuck on the wrong continent and in the wrong century. In true “Bernie Bro” fashion, they speak in broad, sweeping gestures about the presumed failures of democracy and capitalism in the U.S., and look back wistfully at the efforts of the Russian Revolution. In speaking of American voters, they say: “Even though their choices are limited, their representatives are bought off by the rich, and the capitalist class holds the entire system hostage with the threat of devastating economic retaliation if things don’t go their way, the system does have some basic democratic elements that its citizens largely affirm and occasionally participate in.

"This is a tricky situation to navigate. If the democratic capitalist state were less developed, it might be possible to convince people to simply storm the gates, tear up the old rules, and start fresh in a socialist society. This is what socialists tried to do in Russia in 1917: the state was weak and after centuries of autocratic rule it didn’t have much legitimacy in the eyes of most Russians, so revolutionaries could get popular support for scrapping it and starting over.”

Ah, yes, the glorious Soviet revolution, which enjoyed so much “popular support,” reflected by widespread imprisonment and executions on a then-unprecedented scale. Adam Jones, a professor and scholar of genocide at the University of British Columbia, has written: “(T)here is very little in the record of human experience to match the violence unleashed between 1917, when the Bolsheviks took power, and 1953, when Joseph Stalin died and the Soviet Union moved to adopt a more restrained and largely non-murderous domestic policy.” Estimates of deaths caused by Soviet communists between 1917 and the fall of the Soviet Union in 1989 range anywhere from 15 million to over 60 million. Several million of these deaths took place in the gulags — Soviet prison camps for dissidents, the Orthodox religious, counterrevolutionaries and anyone condemned as “bourgeois” or an “enemy of the state.”

It is bad enough to be willfully ignorant about the economic devastation and political oppression that characterized life in the former Soviet Union. But all this talk of “workers versus owners” and a “capitalist class” betrays embarrassing — and dangerous — ignorance of real facts right here in these authors’ own country.

To hear Day and Uetricht (and Sen. Bernie Sanders) talk, a handful of robber barons owns all the means of production — the land, the factories, the industries — while everyone else — tens of millions of the slaving, underpaid proletariat — struggles in Dickensian conditions.

This may have been true in Russia at the end of the 19th century. It is most certainly not true of America in the 21st. The “abolish capitalism” crowd uses the terms “business” and “business owner” as epithets — accusations, as if every business were Enron.

They aren’t. Let’s take a look at the facts.

According to recent U.S. census data, there are approximately 30.4 million firms — businesses of any sort — in the U.S. Of that number, fully 81% — 24.8 million firms — employ only their owners. But even if we look at the 5.6 million firms that have other employees, almost 90% employ fewer than 20 people.

And by the way, this same structure holds true if we look only at businesses that are incorporated. Almost 90% of all corporations in the U.S. employ only the owners, or a small handful of employees.

In other words, huge numbers of Americans own their own companies. Millions more work for very small companies. And even when one looks at the relatively small number of large corporations that are publicly traded (fewer than 4,000), millions of their shares are held by small investors; 55% of Americans own stock individually or through participation in mutual funds or pensions.

What has made America so prosperous is the ease with which anyone can start a business. Women own businesses. Minorities own businesses. (There are more than 11 million minority-owned businesses in the U.S., employing more than 6 million people.) People without college degrees own businesses. Immigrants represent 20% of all entrepreneurs in this country overall — and more than half of America’s billion-dollar startups have at least one immigrant owner.

In a country where over 600,000 new businesses launch every year, the everyman (and everywoman) entrepreneurs are the “capitalists.” The “bosses” are the “working class.” The owners are the employees.

American business is an extraordinarily egalitarian enterprise, creating and distributing wealth. Socialism only destroys it.

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