Socialism sings its siren song to American youth. Here’s what we should do about it: Alec Ross


Too many young Americans are falling prey to the siren song of socialism, but there is something we can do about it. A shocking percentage of millennials (ages 25-40) and Gen Z (ages 17-24) favor socialism over capitalism.

Studies place support for socialism among these young Americans consistently above 40%, with more than half supporting a “complete change in our economic system away from capitalism.” And while it would be easy to assume that rejection of capitalism exists only among Democrats, the data tells us something different.

Study shows the percentage of Republicans between the ages of 18 and 34 who have a positive outlook on capitalism has dropped from over 80% before the COVID pandemic to just 66% now.

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These young Americans were the first generation that does not remember Communism and the USSR. They could not see the misery and oppression that accompanied socialism and led to its failure.

Do I think that the adherence of young Americans to socialism is naive and misguided? Yes.

But it is not enough to simply say “capitalism is better”.

Study shows the percentage of Republicans between the ages of 18 and 34 who have a positive outlook on capitalism has dropped from over 80% before the COVID pandemic to just 66% now.

What has turned out to be true is that the abandonment of the “stakeholder capitalism” that defined the American economic system and fueled decades of growth after WWII has turned out bad for the American middle class. and for American youth.

Stakeholder capitalism was the dominant form of capitalism in America from the time of Truman to Reagan. Companies had to generate profits while striving to improve the well-being of their employees, support the communities in which they operated and, in general, serve the public good.

It meant little things like sponsoring Little League and local charities in their community and also big things like not firing workers at the first sign of trouble. The companies were headquartered in towns and cities across America where the CEO’s kids went to the same schools and played on the same sports teams as the workers’ kids.

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Then things changed. The main ideology of American capitalism shifted from stakeholder capitalism to “shareholder capitalism” which held that maximizing returns for owners and investors was all that mattered, and any large investment in other stakeholders was disabilities. It drew a dividing line between a company’s shareholders and all other parties affected by its business, including its employees, community, country and customers.

This is why companies began to move their headquarters out of the heart of America to tax-optimized locations where companies did not have to pay taxes. He ended longer-term investments in a company in favor of stock buybacks that emptied a company’s coffers for the sole purpose of driving up its stock price. American workers are the ones who suffer the consequences both financially and in terms of safety and well-being.

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Think about the experience of flying on one of America’s last major airlines. Boeing and major U.S. airlines have received massive government bailouts, although the airlines generated more than $ 49 billion in free cash flow over the previous decade. The reason they weren’t able to tap that $ 49 billion once the issues hit wasn’t because they had invested in new planes, better service, or better wages for their workers. .

Author Alec Ross (Alec Ross)

No, they spent $ 47 billion of that $ 49 billion on stock buybacks. Boeing spent $ 43 billion of its $ 58 billion free cash flow during that period on share buybacks, despite the need to invest in making its planes safer. These share buybacks did nothing for passengers or employees; they just inflated stocks for investors, and as soon as problems arose, taxpayers bailed them out.

The irony is that it is more socialist than capitalist. This is corporate socialism for the 2020s: we are socializing the costs for taxpayers and privatizing the gains for shareholders.

And then there is only the impact on the bottom line on American workers. If the level of inequality in the United States had remained at a constant level for the past forty years instead of expanding to its current Mad Max-like state, that would have meant that $ 50 trillion would have gone to workers earning less than the 90th percentile. That’s $ 1,100 more each month for each worker.

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This is what happens when you don’t pay a worker a single dollar that might otherwise go to a shareholder. And these shareholders are not the middle class. The richest 10% of Americans now own 89% of its shares, a historic high.

It is not about the gap between rich and poor. It’s about the growing gap between the rich and the middle class.

These are the circumstances that allowed the myth of the history of socialism to penetrate and capture the minds of millions of young Americans. To win them back, we must repair our capitalism by giving primacy to workers and communities alongside shareholders.

Alec Ross is the bestselling author of “The Roaring 2020s: Businesses, Countries, People – and the Struggle for Our Future. “