New Economy Journal

Has Socialism’s Moment Arrived in the Hearts of the Young?

The Young Person’s Issue - The Long Read

Volume 1, Issue 5

August 5, 2019

By - Scott Colvin

Cover photo by Jon Tyson on Unsplash
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How is this New Economy? Scott Colvin argues that socialism is a means, the means, to achieve just, emancipatory outcomes and is not just another political identity. Socialism is the solution to the problem, and not just a flavour of one solution. If so, the new economy movement is a socialist movement.


[1] There’s Something in the Water
[2] Capital’s Global Ambition
[3] A Constantly Morphing and Evolving Force
[4] The Arrival of Socialism is Inevitable
[5] But Will it Last?
[6] Threads in the Fabric of the Whole

[1] There’s Something in the Water

There’s something in the water.

In Flint, a sleepy, forgotten city in the State of Michigan, this has taken a morbid complexion.

Public officials in 2014 decided to switch the city’s water supply from Lake Huron to the Flint River. The Flint River was suspected, even then, of harbouring water contaminated beyond levels acceptable for safe human consumption.

Four months later, large parts of the city were recommended to boil their water before consuming. Six months after the supply switch, a General Motors assembly plant stopped using the new tap water after it continually corroded engine parts. An inability to control the levels of acidic contaminants caused the lead pipes ferrying water through the city to leach lead into household and other water. This had a cruel double-effect: lead filtered through to tap water at dangerous levels, but also caused the decontaminant effects of chlorine present in the water to be less effective, leaving harmful bacterial content to spike.

The catastrophe began with high prices for mainline water services. The city was in the grips of an existential financial crisis that threatened to bankrupt the proud midwestern town, much in the same way bankruptcy had earlier decimated nearby Detroit.

The bankruptcy of Detroit led to the appointment of ‘emergency manager’ Kevyn Orr, who was tasked with monetising the city’s assets in order to raise its head again from the bearing flood. Orr split up the Detroit Water and Sewerage Department and created a new Great Lakes Water Authority, with a mandate to privatise the sector. Eighty percent of the previous DWSD workforce was laid off.

The same emergency manager power was used by the state to compel a number of cost saving efforts in Flint, including switching to a new water source. Flint was being pushed, cajoled and bullied into avoiding a financial fate familiar to Detroit. And then the water came out brown.

The addition of an anti-corrosive into the water, a small change that could have severely reduced the harm of the crisis — if not the whole of it — would have only cost US$140 per day. The brutal and savage fight for safe drinking water continues to this day, as, even now, residents are recommended to drink only filtered or bottled water.

Neoliberal capitalism requires the public sector to organise itself around the principle of profit-maximisation in the same way that it requires profit to be the highest ideal of the so-called private sector. We can say so-called because under Neoliberalist capitalism all things become private — and not public — concerns, at which point the distinction becomes meaningless. This form of capitalism requires the presence of the market in every interaction at every level, including at the level of the general public. Where an individual’s ability to purchase a good or service is determined by their ability to adequately be rewarded by the market in another area for their provision of some other good or service, neoliberalism wants for the public at large to be weighed and measured on the same principle.

Cue Flint, where the public was deemed not sufficiently able to pay for the provision of clean, safe water, as a result of many individuals being unable to raise enough money from their own private pursuits. None of which is to say that, in general, there wasn’t enough money to pay for clean drinking water, because of course there was — but that does not matter in a public system run on private principles, where it is every person for themselves and no other. The wealth of nations doesn’t always provide for the needs of one.

[2] Capital’s Global Ambition

Perhaps more troubling than Flint is Puerto Rico.

Where the people of Flint were not able to access clean drinking water because it had ceased to be commercially viable for them to do so, the administration of the entirety of Puerto Rico has been given over to private interests.

The island is now run by a company - international consulting firm McKinsey & Company.

The tragedy of Puerto Rico unfolded slowly, over the better part of four decades, as the country’s government issued more and more bonds to pay for its spending, rather than adjusting its balance sheet in other ways, including increasing taxation revenue. In 2014 the debt funding reached an inflection point, and several international credit agencies lowered their rating of the island’s bonds to junk status — the financial equivalent of private multinational institutions snapping their fingers and levelling a previously-sturdy building.

This meant the territory was unable to find buyers of additional bonds on reasonable terms, jeopardising its ability to pay for its spending, and which spiralled into a full crisis, resulting in an inability for the government to pay for many public services, mass unemployment and civil discontent.

One of McKinsey’s first and primary tasks has been to find a solution for Puerto Rico’s dangerous levels of debt, which threatens to tip the territory into bankruptcy. Except McKinsey’s interest is not dispassionate as much as it is conflicted. The company owns at least US$20 million in bonds issued by the Puerto Rican government, with a potential restructure plan having significant consequences for whether McKinsey will see a return on its investment.

McKinsey owns its bonds through a subsidiary investment vehicle, the McKinsey Investment Office Partners. While the MIO Partners holds US$20 million in Puerto Rican bonds, a further entity the MIO has invested in, the hedge fund Whitebox Advisors, holds at least a further US$170 million. In bankruptcy proceedings, conflicts of interest such as these would need to be disclosed and any challenges to them disposed of in court. The encroachment of private on public, however, unchecked and unnoticed, is still a wild west where the only rule is the one you can negotiate, and the law empowering McKinsey’s role in Puerto Rico contains no such requirement of disclosure.

At least, if the Company doesn’t manage to make money from its efforts in the debt market, it has the fees it’s charging the Puerto Rican government to fall back on: US$50 million as of November 2018, ongoing to this day, charged at a fixed fee floating round US$2 million per month.

McKinsey is a breeding ground for mega-wealthy executives, with the company in 2015 boasting that “at the last count, about 450 former McKinsey consultants were running billion-dollar-plus organizations around the world” (and surely higher now, with the number trending up). Just as those former and current McKinsey employees form a virtuous circle passing through boardrooms and legislative chambers, so does its philosophy of private organisation of public spaces, and a radical destruction of the line between the two concepts.

[3] A Constantly Morphing and Evolving Force

Common to the bankruptcies or near-bankruptcies in Detroit, Flint and Puerto Rico is the theme of the private sector being mandated to find a solution, using private sector principles. This may seem like a blending of the private and public spheres, or at least the coming of greater integration of the two, but the barbarians are already well past the gates. The private sector thrives on picking up ‘distressed assets’, which is a euphemism for bankrupt or near-bankrupt assets, buying these at heavily-reduced prices and selling them for a profit.

In that light, it isn’t so much that private action in response to troubled public assets signals a creeping of private influence into the public space. Rather, it is a sign that the public sector has already been integrated into the private — whether we noticed or not.

Ravenous global capital has grown hungry enough to swallow whole communities and countries. And its hunger is pulling it in other new directions, as well.

We’re told that we now live under the beginning of the reign of ‘surveillance capitalism’, in which everything we do, every Google search term, every tired eye blinking at an image on Instagram, even every heartbeat, is or will be used, scrutinised, analysed, to produce a more effective product.

As Shoshana Zuboff wrote in her 1988 book, The Age of the Smart Machine: The Future of Work and Power, this form of capitalism “unilaterally claims human experience as free raw material” to be used in its production of the goods and services it sells back to us. Under such a system we are commodity and purchaser. Our lives are being packaged and sold back to us, unendingly.

Wild visions of universal commercialisation are even being exported beyond the final frontier. Where the first space race, between the US and the former USSR, certainly had capitalistic overtones insofar as the overarching point for both was to demonstrate and thereafter cultivate a greater economic dominance than the other, the forthcoming second space race will far exceed it in financial rationale.

This second space race is being lead by Jeff Bezos of Amazon and Tesla’s Elon Musk, among others. Bezos’s Blue Origin wants to colonise the Moon and mine its natural resources. Musk’s SpaceX wants to colonise the Moon and Mars. Current technologies are so nascent that others will undoubtedly join the race before clear favourites for the dictatorship of space colonies are known. Should they be successful, they will very likely have significant determination of the economics and politics that subsist beyond Earth.

Capitalism has survived and has become so dominant because survival and domination are inherent to its nature. It is inevitable that a system predicated on further entrenching itself and on replicating itself as it grows outwards would come to be the main system. This is similar to the Anthropic principle by which, of course, the universe must have had the conditions necessary to foster life and, of course, evolution must have resulted in human beings, otherwise we would not be here to observe those facts.

The biological imperative in capitalism means that, of course, it continues to assert its primacy, and stretches ever into new and novel forms.

[4] The Arrival of Socialism is Inevitable

With few exceptions, the Bronx is the one place in New York City where the streets are no harder in winter than they are at any other time of the year. Cool winds seem always to skip down the concrete sidewalk and dictate some backbeat to the rhythm of life. I lived in New York for several months, and was always captivated by the Bronx, so near to the opulent metropolis Manhattan, so far from most busy New Yorkers’ minds.

The Bronx is where young US Congresswomen Alexandria Ocasio-Cortez — ‘AOC’ to those in the know — is from. AOC won a New York House of Representatives election last year over 14-year incumbent Joe Crowley in a stunning upset. She has already, in her less than 12 months in office, electrified the American political landscape. Her brilliant articulateness has caused clips of her appearances in debates, at inquiries and on panels to go viral, and she has received four times as many social media interactions as the top Democratic presidential candidates.

She is Puerto Rican, with a mother born on the island and a father growing up in the Bronx to a Puerto Rican family.

Alongside Bernie Sanders, Rashida Tlaib, Ilhan Omar and others, Ocasio-Cortez has brought the word ‘socialism’ to the forefront of public thought, and has done wonders to reduce the stigma associated with it. Socialism is now a little bit cool — predominantly with younger people. Over 40% of Americans now agree that socialism is a good thing.

Ocasio-Cortez and Rashida Tlaib are the first elected female US congresspeople who are members of the Democratic Socialists of America (and the third and fourth overall). The emergence of the DSA is emblematic of a broader emergence of socialist subculture, with millenials and Gen-Z increasingly likely to identify as such. American leftist publication Jacobin has grown into a significant force, employing a team of talented writers and editors publishing high-quality content in a snappy, modern format that is as sophisticated in its offering as any mainstream publication. (The name Jacobin is taken from a famous revolutionary political club from the French Revolution.) Hip NY Mag asked: ‘When did Everyone Become a Socialist?’, and has published a lengthy list on the topic of socialism as it traces its editorial fingers over the trends of now. Even Teen Vogue has become an unlikely comrade of the cause.

This is not to diminish the importance of the DSA, and other overtly socialist organisations, over the course of US political history. Eugene Debs, Rosa Luxemburg and other leftists have long left their marks on political discourse, with the fortunes of leftism waxing and waning over the decades since their lives. But, and perhaps on account of the ease of modern communication, leftism seems a greater force than it has since the ‘New Deal’ times following the Second World War.

It is no coincidence that at this time of peak capitalism many would choose to question its central tenets and look for alternatives. The course of dialectical materialism is a lesson on the observation that as things come to their zenith and most-distilled form, they, at the same time, cultivate the contradictions that will eventually result in them being deposed. As modern capitalism so overtly deprives, starves and kills — stretching its form further to ever greater purity and danger — so, too, does it nourish discontent hungry for its end.

However, as we know, it isn’t as simple as a choice between neoliberal capitalism and an alternative. It’s the choice between a continually permeating, adjusting, developing neoliberal capitalism (or post-neoliberal capitalism) and something that is not that. Flint demonstrates that, as does Puerto Rico. Both are examples of a kind of accelerationism towards greater commercialisation of every aspect of our lives.

[5] But Will it Last?

If the influence of socialism has grown and shrunk over time — though generally kept at bay by capitalism — what’s to say it will have any greater success in altering the fundamental order at this ascendent point? What does it need to do to really take hold? How can it last?

To linger, socialism will need to be woven into the narrative of this generation’s struggle, as some or many key themes emerge in the story told by each successive generation of itself. This is true at face value, but also when considering that all of the other central issues of this generation (climate catastrophe, income inequality, social equity) seem to require socialist solutions — some answer that relies on a coming together for the common good at the expense of the wealthiest few.

Looking for historical analogies is fraught, but informative. It can be hard to generalise across decades. The baby boomers were, at least to a point or at a time, interested in a racial equality that was considered radical by their contemporaries. They made great strides in this emancipatory effort at a legislative level in many places, though as imperfectly as anything else. What they did not achieve was to effect a lasting and total change to the structure of society. Theirs was no radical fait accompli, no universal ever-lasting victory.

The lesson is that legislation and laws are insufficient. They can be wound back (as has been the case of Aboriginal rights in Australia), they can be rendered moot (as is the case in the gerrymandering of American voting populations); and they can cause bitter spite, as may still be perceived in modern New Zealand, where parts of the white majority consider their Maori brothers and sisters to be afforded protections and deference undeserved.

Cornel West, appearing recently on the Joe Rogan Experience podcast (of all places), made the point that the effort towards the emancipation of people from the tyranny of authority must set in its sights the freeing of society from the totalitarianism of capital. That emancipation must break bread with the notion that capitalism is incompatible with freedom.

The enemies of progress towards a more fair and just society know that the battle is for the hearts and the minds of all people, and they choose to wage their battle on that turf. Their fight is not one that lives and dies in the courtroom or in the legislative chamber, although it finds expression in those places and fights for domination of those arenas. They reduce the challenge of co-opting society to bear more the fruits of equality to the merely ideological. The soul of neoliberal capitalism is not interested in taking heed of an argument over the well-being of civil society, a discussion of what is best for the health and prosperity of most people.

What neoliberalism does instead, and does so to devastating effect, is neuter the discussion into one of identities. This is identity politics 101 — isolate an identity and isolate a perspective from which that identity cannot be disassociated.

The question of sustaining the current push of socialism long enough for it to have significant effect is whether it can be recognised as more than a political identity and as the hidden-in-plain-sight solution; whether branding a person socialist will be enough to dismiss their arguments, or if genuine debate will be needed.

Critics of socialism like to say that the left has presented no viable alternatives, but merely a ‘vibe’ or feeling of what should or should not be done — without specifics to flesh out those lofty ideas. This, obviously, misses the point that neoliberalism lacks largely in the way of detail, and is instead an overarching ideology influencing policy decisions at each juncture. Neoliberalism is not a step plan that requires a domineering mastermind to implement, it is a system of thought that weighs on the minds of all of those in positions of influence; not the power of one but the graft of many to bring it about.

Even putting aside the fact that neoliberalism is as much ambiguous ambition as any alternative, the argument that socialism does not offer workable solutions seems to be a red herring. In fact, the modern left is teeming with ideas. Modern Monetary Theory in respect of balancing sovereign debt; setting a ‘maximum’ income; the notion that any value given to shareholders must be met with some value returned to workers; a ‘Green New Deal’ funded by a wealth tax; Universal Basic Income; employee ownership of businesses — even policies as simple as a 70% top marginal tax rate concretise left principles in a manner that can be debated in serious policy forums.

The ideological battle encourages an obsession with impermeable perceptions of counter-capitalism that stymie proper discussion. Socialism is just people wanting a free ride. But isn’t the real free ride with the wealthy? Intergenerational wealth transfer is the ultimate free ride — inheritance is literally money for nothing without even the promise that you’ll do something useful with it. Tax cuts for the very wealthy return more money to their hands than a social system ever could, and taxation burdens lower-income families much more than it does international corporations.

Even the mildest humouring of an argument for socialism goes quickly beyond the charge of advocating for a free ride, and into the realisation that socialism, at its core, is a strike in the direction of equity, of wanting wealth to be common and without poverty.

When it comes to challenges facing the present upswell in sentiment towards alternatives to capitalism, the misconception of socialism may be the most significant. It’s macro, it’s faceless. It is the main impediment to progress. How to convince on a massive scale that socialism is a means, the means, to achieve just, emancipatory outcomes and is not just another political identity to which to belong or not. We know that socialism is the solution to the problem, and not just a flavour of one solution.

[6] Threads in the Fabric of the Whole

Australia has not had a Flint. It is not likely to become a Puerto Rico any time soon, either. Income inequality is not as high as it is in the United States. The Socialist Alternative is not the DSA. Red Flag is not Jacobin. Our wealthiest one-percent enjoy the same amount of wealth as only (only) the bottom 70% of society, while in America, those in the one-percent hoard as much as the bottom 90% combined. (This is all notwithstanding the neglect of Indigenous Australian peoples and communities, with many communities deprived of essentials and economic suffering much greater than with other communities — all of which is forgotten by mainstream media.)

However, Australian incomes are becoming increasingly disparate and wealth concentration is growing. Our politicians are increasingly fanatical about strongly-private solutions to public issues. An interest in socialism simmers among the young, even if it hasn’t broken out yet.

Australian identity politics is similar to those of other countries, albeit with a local veneer. We hear about ‘tall poppy syndrome’ and the ‘politics of envy’. Australia may not have the same issues as some of our overseas compatriots, but the arguments will be the same. Identity politics works the same everywhere.

Despite all of this, the issues socialism may solve are inherently international. Climate catastrophe is the most obvious, but forget not how intertwined the international hubs of capital are. 2008, after all, was not that long ago.

Socialism’s long-term success may well depend on the types of arguments that are entertained and permitted in the public space. Neoliberalism has reached such a state of contradiction and insanity that the Washington Post ‘fact-checked’ Bernie Sanders’ statement that “Three people in this country own more wealth than the bottom half of America” by responding thatpeople in the bottom half [of wealth] have essentially no wealth, as debts cancel out whatever assets they might have. So the comparison is not especially meaningful.” What an insight.

The battle for public spirit and debate will go on, and we can’t say with certainty whether and for how long socialism will stay in its ascendency and not fall past its prime meridian into shadow. For now, however, it remains a spectre peering over the shoulder of the most important issues of the day — as always it does as the contradictions of capitalism bear themselves out.

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