President Trump earned a rousing cheer from Republican lawmakers during his State of the Union address when he proclaimed, “America will never be a socialist country.” His proud declaration echoed recent comments from conservative critics who have warned that the burgeoning progressive agenda in the Democratic Party, with its emphasis on higher taxes and government-run social welfare programs, would send the U.S. down the road of socialism and inevitable economic ruin. Look no further than Venezuela, the critics cry, for what happens to a county that dares to raise taxes on the rich or build a universal health care system.
The Wall Street Journal’s Greg Ip threw some cold water on the anti-socialist chorus in the wake of the president’s comments, however, pointing out that the policy proposals being discussed in Democratic circles right now don’t really qualify as “socialism.”
“Would these people actually know socialism if they saw it?” Ip asked Wednesday. “Taxing the rich, Medicare-for-all, and a Green New Deal that replaces fossil fuels with renewables are certainly liberal, probably radical, possibly unwise. But socialist? Hardly.”
Simply put, the proposed policies respond to market outcomes but do not replace the market with something like a government-run central command, Ip says – and only the latter represents true socialism.
Historically, there’s nothing unusual about the proposals Democrats are discussing, Ip writes. The U.S. has seen high marginal tax rates like the ones proposed by Rep. Ocasio-Cortez as recently as 1981, and the idea of a Green New Deal can trace its roots back to the Tennessee Valley Authority of the 1930s and the Interstate highway system of the 1950s.
“These Democratic proposals conscript private capital in the pursuit of social priorities,” Ip says, adding that President Trump has done something similar “by threatening companies who shift production out of the U.S.” And while critics are certainly free to disagree about the economic wisdom of pursuing any given tax policy or spending program, none of the plans currently on the table would come close to creating the state-directed economic institutions that have crashed so dramatically in Venezuela.