Montana Viewpoint: Socialism in America

Jim Elliott

President Donald Trump is branding Democrats as “Communists and Socialists.” What does that mean? As far as the threat of communism is concerned, to my knowledge there are two communist countries in the world, the failing government of Cuba and the Democratic People’s Republic of Korea. Oddly enough, on September 29, 2018, Trump claimed he and North Korea’s Chairman Kim Jong Un “fell in love.”

Well, maybe he changed his mind, Trump, I mean. Or maybe it was just “puppy love”. And Communist China? That has long since given itself over to a semi-capitalistic economy. What those three countries do have in common is that they are all repressive dictatorships, like Russia.

Socialism, on the other hand, is still alive and flourishing and needs to be defeated, at least in the mind of Republicans running for election. But what does “socialism” mean? It’s hard to know, kind of complicated, in fact. Here’s one person’s opinion: “The legitimate object of government is to do for a community of people whatever they need to have done, but can not do at all, or can not so well do, for themselves – in their separate, and individual capacities.” That’s Abraham Lincoln writing in 1854.

America is a staunchly Capitalistic nation, but with some programs that fall under the “socialist” umbrella. President Dwight D. Eisenhower’s marvelous Interstate Highway system was paid for by the federal government, but it wasn’t the first of its kind. That would be the construction by the federal government of “The National Road” which was first authorized in 1806 to run from the head of navigation on the Potomac River at Cumberland, Maryland to “the State of Ohio.” In 1838 it was completed to Vandalia Illinois and much later became part of Route US 40.

Significant socialistic programs that became a part of America’s fabric include the Social Security program, Medicare, and Medicaid.

Then there’s the Post Office, the government agency that pre-dates the founding of the nation. Begun on July 26, 1775 by an act of the second Continental Congress. Benjamin Franklin was the first Postmaster. It has been well run and efficient and has the highest public approval rating of any government agency. Don’t believe it? Try sending a letter in any other country.

Sometimes capitalism gets itself in trouble. If you remember the sub-prime lending crisis of 2008 caused by lenders extending credit to homebuyers they had no business lending to. Major banks and businesses were in danger of going under, a multi-billion-dollar bailout by Presidents George H. W. Bush and Barack Obama saved the American economy as well as the world’s. Many large businesses—all “too big to fail”—survived, but the brunt of the crisis fell on the American citizens. Unemployment soared to10%, 8.7 million people lost their jobs and another 8.5 million families lost their homes.

Nobody liked the solution very much—the taxpayer bailed out capitalist corporations, but any other alternatives would have been much worse. This kind of event is known as socializing the loss and privatizing the gain, a bad combination.

In the mid-1970s seven eastern railroads went bankrupt at the same time. Shipping and interstate commerce were disrupted until the government stepped in to socialize the railroads. Penn Central, the largest railroad in the nation at the time was merged into the federally controlled Consolidated Rail Corporation (CONRAIL) along with six other railroads. Conrail was owned 85% by the Government and 15% by employees. In its first few years it bled money, but in 1981, when Stanley Crane, former President of the Southern Railroad, took over, Conrail began turning a profit. Crane laid off employees and abandoned miles of unprofitable routes. He was able to do this because of bills passed by Congress allowing massive layoffs and route elimination.

In March of 1987, Conrail, the socialistic enterprise, was privatized and sold to individual investors in what was the largest IPO to that time.

Pure capitalism has its faults and failures. So does pure socialism. If we are worried about socialism sucking the soul out of American individualism, we should worry just as much about the profit motive of trillionaires doing the same.

Montana Viewpoint has appeared in weekly and online newspapers across Montana for
over 30 years. Jim Elliott served sixteen years in the Montana Legislature as a state
representative and state senator. He lives on his ranch in Trout Creek.