Faces of a new capitalism: How Millennials are embracing socialist values
| Baltimore and Boston
You might say that it was in a bread line where economics came into focus for Bernardo Vigil Rendon. He was employed, actually, at a bread factory.
One day, word came from on high: A new client needed the loaves packed in a different kind of box. The workers would be packing the same amount of bread, but the job would now be more difficult, and there would be no extra time allowed to do it. No extra pay.听
鈥淲e just have to do this鈥� was the message that filtered down, he recalls.
Why We Wrote This
Many Millennials are rebelling at an economic system that they believe puts profits over fairness and equality. Is capitalism too harsh?
What Mr. Vigil Rendon could see, along with fellow workers and even his immediate manager, was that, at about 15 cents extra per loaf, it meant a substantial new chunk of profit for the bread factory but nothing for those on the line.
鈥淚t was exceedingly hard鈥� for the workers, he says, and 鈥渜uite a windfall for the owners.鈥�
Today, Vigil Rendon has moved on to a workplace he likes much better, a bicycle store that鈥檚 owned by the workers collectively. The pay isn鈥檛 huge, but the job comes with perks that are unusual for such a small shop: a retirement savings plan, no staff cuts in the off-season, and a familial atmosphere that sometimes brings the shop鈥檚 adopted cat, Falkor, into an amiable nose-to-nose encounter with another worker鈥檚 towering dog. And in weekly meetings, everyone has a voice in decisions.
Now, as Baltimore Bicycle Works looks to open a second store (after 10 years in operation), it鈥檚 also hoping to be a harbinger of a wider transformation in the US economy. The workers here want to prove, one employee-owner at a time, that an egalitarian business model is a viable step up from a corporatist system that too often enshrines profit and greed, not workers and customers, as the overarching reason for existence.听
The bike shop, tucked under the brightly painted Howard Street Bridge in central Baltimore, is just one example of a leftward stirring on economic issues across the United States, especially among the young:听
鈥� In a shift since 2016, young Americans today view socialism more favorably than capitalism, this year.听
鈥� The public has been embracing ideas like 鈥淢edicare for all鈥� (59 percent support, according to a Kaiser Family Foundation poll) and a federally guaranteed job (46 percent, says a Rasmussen survey), tilting the energy in the Democratic Party toward its left wing.听
鈥� Labor unions have been edging up in popularity and scored a ballot-initiative win this year even in Republican-dominated Missouri.
鈥� Worker ownership 鈥� both and through full-fledged 鈥� is growing.
If Occupy Wall Street back in 2011 was a relatively short-lived protest, its spirit seems to be persisting and even expanding.听
All this hardly means that a Marxist revolution is imminent. But, beyond a mere symptom of polarized politics, it reveals a discontent with the economic system that鈥檚 echoed even by some economists on the conservative end of the spectrum.
鈥淐learly US capitalism failed in providing what it promised,鈥� says Luigi Zingales of the University of Chicago鈥檚 Booth School of Business, referring to the benefits delivered by truly competitive markets. 鈥淓ither we fix capitalism to provide what it promised, or we might end up losing capitalism or ... democracy, or maybe both at the same time.鈥�
That鈥檚 a stunning assessment since the economy, by many measures, is not just strong but thriving. Unemployment is approaching half-century lows. Consumer confidence has revived. Economic growth topped 4 percent in the second quarter. Yet many Americans still feel fearful or disillusioned. Why?听
In some ways, capitalism is a victim of its own success. When Soviet socialism essentially collapsed in 1989 and China started opening up its economy, both caused a surge in the pool of global labor to compete with Western workers. And the sheer magnitude of technological innovation, while widely cheered as capitalism鈥檚 biggest triumph, feeds insecurity as machines threaten jobs across the economy.听
Still, in other ways capitalism鈥檚 flaws are on display. Experts say moneyed interests have encouraged trends that fuel inequality and resentment. These include attacks on organized labor, rising concentrations of corporate power within industries, soaring pay for executives, and trade policies that have protected elites while putting blue-collar workers at risk.
A 鈥淭rump effect鈥� may have added some fuel. The Gallup-tracked attitude shift among Millennials since the 2016 election reflects a decline in their affinity for capitalism (not rising support for socialism), and the change comes alongside negative views of a billionaire president who has cut taxes for the rich.
All this, coupled with the legacy of the Great Recession, has helped shape a young generation eager for economic change and whose collective voice may be large enough to have some impact. Many Millennials appear to have more interest in tempering capitalism than replacing it. Still, the questions they鈥檙e raising are consequential, touching on values such as freedom and fairness and the viability of the American dream.
In short, while the travails of the economic system aren鈥檛 the sole cause of America鈥檚 political disarray, they鈥檙e a piece of it. Where citizens take that system next will do much to define America鈥檚 strength and social cohesion as a nation.
***
If you summed up what rankles Elena Botella about US capitalism today, it might boil down to two issues: equality and opportunity. Even in a land of abundance, she says a lot of people will 鈥渘ever have enough in savings to stop worrying,鈥� let alone to fulfill their larger potential.
听
鈥淚 don鈥檛 think we鈥檝e done a good job at all of sharing the dividends from growth in a way that鈥檚 either fair to workers or good for society,鈥� says Ms. Botella, a Millennial in Washington, D.C., who has worked in the credit-card industry and is now doing research for a possible book.
For Botella, like many other younger Americans, the financial crisis and ensuing recession was a defining event. Back in 2011, as a college student, she was part of the Occupy Wall Street protests.
But her view now is a nuanced one 鈥� a search for better ideas, not a firm commitment to socialism. 鈥淚 think it鈥檚 clear that capitalism has done a good job of creating a lot of abundance and prosperity,鈥� she says.
That statement is a reminder that Millennials are hardly lockstep foes of capitalism. She鈥檚 also voicing an assessment that鈥檚 widely shared among economic historians. By the early 19th century, in Europe and America, forces coalesced that helped spur a historic rise in living standards. Specific breakthroughs and discoveries played a role. But undergirding it all was the interaction among shopkeepers and consumers, investors and inventors, that Adam Smith had glorified as the 鈥渋nvisible hand鈥� in his 1776 work, 鈥淭he Wealth of Nations.鈥�
Note that Smith didn鈥檛 use the word 鈥渃apitalism鈥� in his paean to free markets. Yet as industrial organization scaled up, the term emerged and quickly became a magnet for vilification as well as praise.
In suburban Los Angeles, Asma Men is a young mother who can relate to both responses. Her parents came to America as refugees: Her father fled Vietnam when Communists took over the south; her mother is Khmer from Cambodia.
鈥淸Socialism] sounds good on paper,鈥� she says, 鈥渂ut knowing the trauma of such political environments based on where my family comes from, it鈥檚 easier said than done.鈥�
Yet 鈥渨hen we talk about the economy, I do feel a little bit disillusioned in the sense of just how the middle class is getting really strapped and the rich are getting richer,鈥� says Ms. Men, who has a master鈥檚 degree in public policy.听
In fact, some of the earliest concerns about capitalism are the very ones that remain salient today: that the system fuels inequality, degrades the environment, and tears the social fabric with disruptive change.
Ben Packer, a young technology worker in New York City, has no qualms about identifying as a socialist.听
鈥淚 think people in my generation have had a pretty profoundly negative experience with capitalism,鈥� he says, citing student debt burdens, high rents, and the nation鈥檚 faltering progress on things such as poverty.
Mr. Packer says you can preserve a market system of producers and consumers even with state-owned enterprises involved. Already, he adds, a lot of innovation comes from the public sector 鈥嬧�� from biomedical research to computers and the internet. 鈥淵ou really get innovation when the government subsidizes the costs and the risks.鈥�
Packer is a member of the modest but growing Democratic Socialists of America. The DSA has expanded its ranks from 6,000 in 2016 to about 50,000 today. He works in politics, using his computer skills to help elect left-wing Democrats.
For now, few people who proudly accept the socialist label hold elective office. Sen. Bernie Sanders of Vermont is a self-
described democratic socialist, and two DSA members appear poised to win House seats this fall, including Alexandria Ocasio-
Cortez, who made national headlines by ousting a longtime Democratic representative in a primary in New York.
But already, even without socialists wielding much power, ideas such as worker ownership and transcending the profit motive have been making inroads in the US economy. Companies organized as worker cooperatives are on the rise. Some 32 million Americans have at least some equity in their workplaces through employee stock ownership plans, stock option plans, and 401(k) plans. Publix Super Markets, with 190,000 employees, is the nation鈥檚 largest employee-owned company.听
Another growing realm is 鈥渟ocial enterprises鈥� or public-benefit corporations 鈥� businesses that seek to earn profits but also frame their mission around benefits to society or the environment.
Some economic research suggests employee ownership can enhance a company鈥檚 performance. And depending on the details, it鈥檚 an idea that can draw support from both liberals and conservatives.听
鈥淐apitalism works best when normal people can freely participate in the economy, when they are rewarded for hard work, when they have a stake in the company that they work for, and when they can easily start a business,鈥� says Andrew Kidd, a conservative economist and a Millennial in Columbus, Ohio. 鈥淚t just leads toward innovation.鈥�
***
The presumption is often that young people will naturally migrate toward more conservative views, including about economic issues, as they age. But will that happen this time?
Gallup poll conducted July 30-Aug. 5
For a hint of why that may not be the case, meet Alison Macrina. Like many people, her political attitudes didn鈥檛 spring forth fully formed. As a high school student in the early 2000s, she was a vocal opponent of the US-led wars in Afghanistan and Iraq, but her critique, she says, didn鈥檛 expand beyond that.
鈥淚 had only really identified those problems in their own little bubble,鈥� she says. 鈥淚 hadn鈥檛 really connected [the wars] more deeply to capitalism as a global economic structure.鈥�
But the economy was very much on her mind after she received her master鈥檚 degree in library science in 2009, when employment was scarce. 鈥淪aying that I was having trouble is a massive understatement,鈥� she says. 鈥淚t took me, I think, a whole year to find a job.鈥�
Ms. Macrina wasn鈥檛 alone. 鈥淭here was this great influx of people who were moving back home,鈥� she says of her peers. 鈥淧eople were working multiple jobs.鈥� Everyone was 鈥渇reaking out鈥� about student loans.
Macrina had initially placed her hopes in President Barack Obama. 鈥淚 thought he was going to take care of us,鈥� she says.听
But she was quickly disillusioned by the bailout of a few Wall Street firms and auto companies and Mr. Obama鈥檚 failure to prosecute the bankers. 鈥淭he Democrats are not going to help us, let alone the Republicans,鈥� she says, 鈥渟o we have to do our own thing.鈥�
Macrina went on to found the Library Freedom Institute, which trains librarians in online privacy. Along the way, she joined the DSA.
Macrina鈥檚 trajectory is typical of many people her age, says Ruth Milkman, a sociologist at the Graduate Center, City University of New York. 鈥淭hese are kids who did everything they were supposed to. They graduate from college or whatever, and then comes 2008,鈥� she says. 鈥淭hat, combined with the economic restructuring that鈥檚 creating all these horrible jobs for everybody, that feeds your disdain for capitalism pretty personally.鈥澨�
Professor Milkman argues the past 10 years have turned Millennials into a 鈥減olitical generation.鈥� Their outlook, she and others say, may continue to be influenced by these experiences.
Of course, many Millennials never became disillusioned by what they saw as the collapse of the American dream because it wasn鈥檛 promised to them in the first place.听
Joshua Ham was born in South Central Los Angeles in 1995, when the neighborhood was known for poverty, drugs, and crime. 鈥淭he gentrifiers [now] call it SoLa,鈥� he says, laughing at the moniker.听
Mr. Ham鈥檚 political awakening came at the age of 15, when he received a three-day suspension for talking in class. The harshness of the punishment, along with the Los Angeles Unified School District鈥檚 policy of handing out $250 tickets for truancy, opened his eyes to the links between the severe punishments given to black public school students and the disproportionate incarceration rates of black adults. 鈥淭hey funnel you to the prison-industrial complex basically,鈥� he says.
Forty-four percent of Millennials are, like Ham, nonwhite, making them the most ethnically diverse generation in US history 鈥� a factor that contributes to their liberal tilt.
Today, Ham works for the Brothers, Sons, Selves Coalition, a youth organizing nonprofit. And he鈥檚 politically active on the issue of prison reform. 鈥淲hat saved my life was youth organizing,鈥� he says, 鈥渁nd having mentors that looked like me.鈥�
***
If the US economic system needs some repair or reinvention, what are the options? And what might the electorate support?
The public at large isn鈥檛 calling to ditch capitalism. Gallup this year found that 56 percent of Americans have a positive view of capitalism, compared with just 37 percent for socialism. Even younger US voters show a mix of conservative and liberal traits.
At the same time, younger voters are pressing for change. They鈥檙e more likely than their elders to embrace things such as government-provided health care and greater help for the poor. And to many Millennials, the change they seek is not so much bigger government as a power shift away from wealthy and privileged elites.
鈥淚鈥檇 love to live in a world that is just democratic in every sense,鈥� says Nick Fuller Googins, a fiction writer and solar-panel installer who lives in Mount Vernon, Maine.听
An older Millennial who鈥檚 done a range of jobs from auto repair to teaching, he says too many people today lack the opportunity to reach their potential because they鈥檙e just grinding out a living or trying to hang on to a job with health benefits.听
鈥淐apitalism ... is having the opposite effect of creating freedom,鈥� he says. 鈥淎 more equal society could unleash these amazing waves of creativity and entrepreneurship.鈥澨�
His views reveal how, on the political left, the affinity for socialism doesn鈥檛 mean espousing the central planning of yesteryear.
More often it means strengthening social-welfare programs and addressing perceived flaws in the private sector through new regulations and incentives. And although the prescriptions vary, it鈥檚 hardly just avowed socialists who are calling for major changes.
Darrell West, a Brookings Institution expert on governance and technological change, writes about how America adapted to the wave of industrialization and dislocation that spanned from the late 1800s Gilded Age through the Great Depression. The nation鈥檚 response included antitrust laws, major commitments to public education, and the adoption of safety net programs such as unemployment insurance and Social Security.听
In the same way, Dr. West and others argue, fresh responses are needed for today鈥檚 era of inequality and technological disruption. Among Democrats, some likely aspirants for the 2020 presidential nomination are embracing universal health care and government-supported college or technical school. They also aim to rebalance capitalism through proposals such as higher taxes on the wealthy or requiring big corporations to give workers 40 percent of boardroom seats 鈥� of Massachusetts.
While Republican leaders are hesitant to expand entitlement programs, some are considering worker-oriented themes. These ideas include expanding the earned-income tax credit, which can bolster lower-income bank accounts without discouraging work.
For both government programs and corporate reforms, economists caution against assuming there are simple fixes. New government spending, for example, can mean higher taxes or boosting public debt. Still, they see the potential to reduce inequality without harming growth.听
Dr. Zingales, the Chicago economist and author of the 2012 book 鈥�,鈥� urges a restoration of well-functioning markets, 鈥媙ot socialism, as the answer to concerns about fairness and prosperity. To foster more competition, he suggests, for example, antitrust reforms, taxes on corporate lobbying, and a school-voucher program with extra support for less-privileged students. 鈥淸Socialism is] such a defeated concept that only young people who don鈥檛 remember enough of history can find that appealing,鈥� he asserts.
At the Baltimore bike shop, whether you call it socialism or not, workers say their collective-ownership model could benefit small and large companies alike. On a recent Thursday, the employee owners have just finished a staff meeting. Some are busy checking on inventories while others help customers or fit a bike with new fenders.
As co-owners, 鈥淎re we all best friends?鈥� asks Bernardo Vigil Rendon. 鈥淣o, but ... we know at the end of the day, if I have an idea, everyone鈥檚 going to vote on it. We鈥檝e all made common cause here.鈥�
