Those who hurl the “s-word” misunderstand the role of the state in American history. While they accurately point to the enormous growth in government since the Civil War and claim that it has stripped Americans of their individualism and self-reliance, the focus of the state’s activities has been subsidizing and promoting “private” enterprise. Government growth promoted by Gilded Age Republicans, New Deal Democrats and Reagan revolutionaries has been one of the most enduring constants in American history. Despite regular election cycle pleas to shrink the size of government, a unifying theme of political experience has been the government’s growing intervention in the market on behalf of the business community.
For an exceptional few decades, however, things were different. Sparked by the Great Depression and the rise of the New Deal, the government expanded its responsibilities to include working people as well as business. It was not accidental that between 1945 and 1972, while business grew drastically, income inequality declined significantly for Americans while posing no threat to the nation’s wealthiest. Nor was it accidental that in the decades of growth since the early ’70s, a reversion to uniformly pro-business policies promoted a significant rise in income inequality with the top 1 percent of all incomes enjoying the largest percentiles of growth. This too is a direct result of government’s beneficence to the private sector.
The issue, therefore, is not government intervention, yes or no; rather it is on behalf of whose interests government intervenes. When the government assists business by bailing out the financial markets — as it often should — it is called supporting the market. When government helps regular folks, as with health care reform, it stirs up fears of something called “socialism.”
Republican Theodore Roosevelt understood the central role of property for American individualism and citizenship — much like those who wield the fear-laden charge of socialism today. But, he argued in 1910, when human rights are in conflict with property rights, “humans rights must have the upper hand, for property belongs to man and not man to property.” Some today would call this socialism.
