-Source-The Stranger-
I found it among my things while sorting laundry: a t-shirt of Marx partying with Mao, Lenin, Stalin, and Che. I knew it was my daughter's. She is 17. It was time for me to have that talk with her. She needed to know truth about socialism, and how it relates to Marx, and why, as an economic project in the 20th century, it mostly failed in both the East and the West. I texted her. Asked her about the t-shirt. She texted back: "Yeah, I found it at the Goodwill."
I asked if she understood what it represented? She texted: "I thought it was funny LOL." I see. Well, it's not all fun and games. It is, in fact, something important that we need to discuss. You see, you grew up in a world that emerged not only after the collapse of socialism in the East, but also social democracy—the capitalist compromise with socialism—in the West (also known as Keynesianism—I will talk to you about John Maynard Keynes, maybe the most important economist of the 20th century, if you happen to find and buy a t-shirt of him partying). Your world is similar to the one I was raised in, in the sense that government is still huge.
This was not the case in the 19th century, the period defined by the consolidation of capitalism and liberalism (liberal, not as in the left or progressive politics, but as in free market and free trade ideology).
Back then, the liberal moment, governments were smallish. After World War II, they grew tremendously, often with budgets exceeding 50 percent of the GDP (this may surprise you, but government expenditures in the liberal moment were around 10 percent of the GDP). At first, a generous portion of this spending supported social democratic programs that were demanded by a public that had experienced the horrors of two capitalist wars, World Wars I and II, and still had painful memories of the Great Depression, a situation where idleness was politically imposed on capacity (the means to make things and generate employment), a madness within a madness. Many at this time thought liberalism (or laissez faire) was done for good. In the US, there was the New Deal; in the UK, there was the Beveridge Report.
The Soviet Union expanded its sphere of influence. China went red. And much of the post-colonial world was non-aligned. Governments at all stages of development played an active role in the management of their economies. For developing nations, infant industry polices, import substitution industrialization, capital controls, and the like were in vogue.
But did this new order (social democracy and socialism) resolve the crises of the 19th century (blunt and often brutal class struggles and economic busts), which resulted in the catastrophes of the first half of the 20th century? Social democracy was partially successful, but it was also never really politically secure. Its whole existence depended upon, not its ideals (welfare benefits, universal health care, public housing, Keynesian expenditures—building bridges and dams and what have you), but upon capitalists being satisfied with the size of profits. Read more
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