Since 2012, I have taught public policy at Dartmouth College and led courses on education policy, health care, tax policy, income inequality, and related topics. I’m three times older than some of my students, and more importantly, I am old enough to have firsthand experiences with socialism, inflation, and high rates of urban crime. After many years lecturing on these issues, I’ve observed one prevalent pattern among my students and other idealistic young people I interact with: It’s difficult for them to comprehend the harm of these problems if they have lived mostly in their absence.
On paper, my students are some of the most intelligent in the nation, but on the first day teaching my course Future of Capitalism, more than half of my students said in a survey that they would like the US to “move toward socialism.” However, by day three, it was clear that most students did not understand what socialism is.
This example embodies how today’s progressive youth are spearheading policies that discount history. While well-intentioned, many young, idealistic people are making policy mistakes because they have not experienced the tradeoffs associated with the policies they are advocating for. Those who ignore history are doomed to subscribe to impractical policies and come up with slogans like “defund the police.”
For example, when making a case for socialism, many young progressives point to Scandinavian countries like Sweden and Denmark. But here’s the thing: Sweden and Denmark are not socialist countries. They are capitalist countries with robust social safety nets. In a socialist system, the government owns and operates the primary means of production, everything from manufacturing consumer goods to allocating housing. (Countries we think of as communist, such as the Soviet Union, were arguably socialist because they never achieved Marx’s vision of ownership by the people.)
In 1986, I crossed through Checkpoint Charlie from West Berlin to East Berlin and was shocked, both by my interactions with the East German border police and by the differences I observed on the two sides of the wall.
When I traveled to the Soviet Union in 1988, a young man on a public bus leaned across the aisle and asked if he could trade me for my watch band. When I demurred, he asked if I had any toothpaste or deodorant that I might part with.
In the spring of 1989, I was in Hungary when the fence came down between Hungary and Austria, allowing those in the East to flock across the border to see what life was like on the other side. Lacking any hard currency, most quickly returned home.
The lesson we learned from the truly socialist countries—the USSR, the Eastern bloc, Cuba, Mao’s China—is that the degree of government control required to deliver on the socialist ideology becomes repressive and inefficient. Did anyone get on a raft in Miami and try to escape to Castro’s Cuba?
In the case of inflation, I worry that progressives will push back against any Fed efforts to contain rising prices. Inflation is a general rise in the price level, meaning that the average cost of goods and services rises as fast, if not faster, than wages for workers. Inflation gives the illusion of helping working people while doing the opposite.
I grew up caddying at a local country club. At the beginning of every summer, the new rates were posted on the wall of the caddy shack. (Yes, there really was a shabby little room called the caddy shack.) Each year, we earned at least a dollar more per bag than the year before.
But the 1970s were hardly a bang-up stretch for working people, and Jimmy Carter was voted out of office in 1980 after the misery index climbed to 19.7 percent. Many who grew up in the 70s know of the misery index, but in short, it is a measurement of the economic distress felt by everyday people. If you don’t know what the misery index is, you didn’t live through the 1970s.
Crime is another issue that young progressives often misinterpret. Crime leads to many existential problems. It diminishes social trust, exacerbates racial and economic segregation, and threatens the tax base in places that most need better schools and social services. Today, many American cities are seeing a spike in crime. In fact, 12 major American cities broke annual homicide rates this year.
In 1994, about the time when Bill Clinton was advocating for the now-maligned crime bill, I was living in Chicago. There were 638 murders in the city that year—sixty percent more than two decades later. The Chicago Tribune did a study during that period of why people were leaving the city for the suburbs. Crime was the number one reason, ahead of schools.
Let me be clear about where I’m writing from: I voted for Joe Biden and Hillary Clinton and Barack Obama. I ran for Congress in 2009 as a Democrat. My concern is that well-meaning people are falling prey to the oldest aphorism in public policy: Every problem has a simple solution—and it’s usually wrong.
Yes, America incarcerates too many people, and this has a disproportionate impact on communities that are already disadvantaged. I wrote a cover story for The Economist in 2002 on “America’s Convict Problem.” I have been thinking about this challenge since before some of my students were born.
However, the answer to America’s incarceration problem is not pretending that crime is victimless. The answer lies in reducing the number of crimes committed, prosecuting those who do significant harm to society, addressing our mental health crisis, devoting more resources to rehabilitation, changing criminal statutes so that they do not disproportionately affect people of color, reconciling the tension between punishment and rehabilitation, legalizing or decriminalizing more drug use, treating addiction, and training our law enforcement officials better.
Sadly, that does not fit on a bumper sticker.
Next is the topic of wealth distribution. In the past decade, this topic has shot into the forefront of the American conversation – think Occupy Wall Street and slogans like ‘We Are the 99%’. More recently, ProPublica published a lengthy investigation on how America’s billionaires are avoiding federal income taxes through harnessing legal tax loopholes.
Yes, the wealth distribution in America is dangerously skewed. Gallup has found that fewer than a third of Americans think the distribution of money and wealth in America is fair. Even the capitalists are worried about capitalism. Ray Dalio, the founder of Bridgewater Associates, the largest hedge fund in the world, was quoted in the Wall Street Journal (not exactly a proletariat rag) as saying: “I believe that all good things are taken to an extreme become self-destructive and that everything must evolve or die. This is now true for capitalism.”
Most Americans would agree that we need to provide more security and opportunity for working people. During the early days of the pandemic, it was perversely revealing that many “essential workers”—those whom we literally cannot do without—were barely making enough to get by.
Is socialism the answer? I’m not sure what socialism means in the American political context. That word has become a calorie-free catchphrase – on the left and the right – for those who do not understand the nuances of socialism or capitalism. I do know that few people look back on Albania in the ‘80s as a workers’ paradise.
Inflation is fool’s good, too. Yes, the wages of low-skill workers have climbed encouragingly as the economy runs hot and employers scramble to fill positions. But we should hold the polite applause. As I learned in my caddying days, the numbers on the check matter only relative to what they can buy. Wages grew 3.6 percent in the first six months of 2021. Prices rose 5.4 percent over the same period.
A Gallup poll released last week found that 45 percent of American households are facing some degree of hardship because of rising prices.
It’s too early to know if rising prices are transitory or baked into the economy. We do have decades of data showing that persistent inflation does more harm than good, particularly for households without assets that rise in value with inflation. The Fed alone can’t fix what ails working America.
What will help low-wage workers? Raising their productivity, supplementing wages through policies like the Earned Income Tax Credit, building more housing in areas with rapid job growth (here’s looking at you, California), raising the minimum wage in ways that are sensitive to the local labor market, removing unnecessary licensing laws to facilitate mobility, and improving our social safety net so that those who contribute meaningfully to society, or are unable to do so, can enjoy a dignified life.
One can talk vaguely about socialism and “the carceral state” and heartless central bankers, but those are the policy equivalents of show trials. They’re less attractive if you know how they turn out. Worse, they divert attention from policies—more substantive, if less superficially attractive—that would improve lives.
Charles Wheelan
Charles Wheelan is a senior lecturer and policy fellow at the Rockefeller Center at Dartmouth College. He joined the Dartmouth faculty fulltime in June of 2012. He was awarded the Dean of the Faculty Teaching Award in 2020.
