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(((Yonatan Zunger))) @yonatanzunger
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This is a slightly old article, but it's still a crucial read: it explains the system of "White Socialism," which the US created in the 1930's-60's as a counteroffer to (Red) Socialism.…
"White Socialism" is the system of guarantees that Americans got for being "good citizens:" pensions and unemployment insurance via Social Security, employer-provided (and tax-subsidized) health care, education via the GI Bill, mortgages via Fannie Mae, and so on.
It was billed as the "anti-Socialism," but it did fundamentally the same kinds of things that Socialism did — provide a community-funded safety net so that everyone could afford to take more risks in their life, and have some certainty. But it came with one big asterisk.
The American social programs were generally funneled through one's employer (Social Security payments, health insurance, etc), which meant that access to them depended on being an employee in good standing: so people had reason not to organize too hard.
And as the name implies, there was one other condition for White Socialism: you had to be white to get it. Sometimes this happened quasi-officially, as with health care in which employers chose who got it, but most often it was de jure.
Redlining (for mortgages), exemption of certain professions (for Social Security eligibility), restrictions on where you could use GI Bill funding, and so on, meant that while everyone paid taxes for it, the benefits were for white Americans only.
Mortgage eligibility was (in the long run) the most important of these, because this controlled not just people's ability to accumulate wealth, but where people lived, which in turn controlled everything from schools to police.
But the crucial point of White Socialism was this: it provided an alternative to Red Socialism, which had been gaining increasing attention among workers (of all colors) especially since 1917. It gave just enough people a chance at a good life, if they played along.
And it worked: the post-WWII US economic boom shared its fruits in a shockingly egalitarian way. Consider the idea that someone working in a factory should be able to live responsibly and end up with a solidly middle-class existence: has that *ever* happened in history?
We literally have a phrase "working class." The idea that a wage worker could become middle class was unprecedented: and it was possible only because of the post-war boom, and because White Socialism redistributed the wealth.
But its decision to not distribute the wealth evenly was very deliberate. The creation of a permanent economic underclass, living in designated areas, and easily marked as "criminal;" and white workers *seeing their interests as opposed to those of Black workers*.
Why is that last bit so crucial? Because by creating two pools of workers who had opposite interests, the people needing to hire them could keep them effectively bidding against each other. Impoverishing one group then let wages be kept low for the other group.
Because here's the other secret of White Socialism: while it distributed wealth in a relatively egalitarian fashion, it wasn't actually *that* egalitarian. There were certain caps on inequality built in to it, but those were removed in the early 80's.
This was the "Reagan Revolution," which led to a huge explosion of business — but as the graphs show, this wasn't the same kind of "explosion of business" that we saw in the past.…
(The famous plot from the above link)
There are a lot of reasons for this divergence, and that deregulation was only part of it; the others have to do with things like the rise of automation. This article is a good dive for those who want to know more:…
And long before this fractionation began to happen, when White Socialism was first being built (in the panic among the wealthy after the Depression and FDR), or when its predecessor New Slavery was being built (in the panic after the Civil War), this kind of thing was understood.
The labor history of the US from 1880-1939 is extremely interesting. Essentially, Socialist (and later, Communist) ideas started to become popular, since working conditions in 1880 US were pretty similar to those in 1880 England.
The suppression of labor movements was a key goal of industrial leaders, just as things like a 40-hour workweek and marginal safety standards were key goals of workers.
I'm not going to try to write an entire history of labor in the US right now, but if you want to understand both why you get health care through your employer, and why people can be jailed indefinitely pretrial for lacking bail money, that's where to start.
And "White Socialism" was the carrot which went with the stick — an offer of a good life, for people declared white and who played along. Until the mid-70's, when it started to fall apart (with the end of the postwar boom) and again in the 00's.
Ultimately, for one simple reason: Greed won. The people running the system forgot why they put it in there, and decided to start to shut down the worker protections that were present, and just get all the money they could. "Corporate raiders" and the like ensured it.
So "White Socialism" was replaced with the "Gig Economy." But that doesn't mean that its racial legacy vanished: the differences in access, wealth, education, policing, and everything else stay in place to this day, and will until they're actively fixed.
So what's the way out? Remember the upside of White Socialism: the formation of a stable middle class, which came by distributing the wealth created by a boom much smaller than the modern tech one more broadly among the workers.
When people tell me that we can't afford to do such things anymore, I become instantly suspicious. The economy has grown a *lot* since 1950, much more than the population. Some costs have risen, but some have fallen as well; we know how to adjust for inflation.
What's changed is wealth concentration. And this isn't important because it means a few people are really rich: it's important because it means that *a lot of money is taken out of circulation by that.*
It's similar with companies. Something I suspect is an under-researched statistic is the total cash reserves of companies. Cash reserves are essentially money a company has, that it isn't investing in its own growth.
Now, a bit of a cash reserve is a good idea always, as insurance for trouble, but numbers like Apple's $256B cash reserves go way beyond "insurance." That's money the company can't figure out how to usefully spend.
Now in theory, if a company ends up with more money than it can spend, it invests it — which has the upside that *other* companies, which need money to expand, get it, and the money stays in useful circulation.
So a good way to think about this is with the "Stokes' Theorem Approach," something I explained in this article.…
Essentially, if you add up all the places wealth is entering the system, and subtract everywhere it's leaving, that's the net change in wealth right there. Any transaction that *isn't* either creating or destroying wealth is simply moving it around.
So if you look at the universe of corporate cash reserves, money can leave this world by buying non-financial goods (eg building factories), by going to workers (wage increases or hiring), or by going to investors (dividends and buybacks).
Wage analyses show that category 2 is basically Not Happening except in some specific areas (eg software engineers, right now). Category 1 is happening in a pretty limited way — expansion is via automation, mostly. Category 3 is happening quite a bit.
But even more so, total cash reserves keep going up. And in fact, they're even more concentrated among companies than they are among people: Apple, MS, Alphabet, Cisco, and Oracle together hold $594B of cash!…
Not to mention private individuals, like Jeff Bezos' $132.4B.
For comparison, the US GDP is about $18.57T. That means that a significant percentage of all the wealth on the table is sitting around in "cash reserves," moving from company to company, investor to investor, but never landing anywhere.
Companies can use the threat of taking their money elsewhere (offshoring) to fight taxation, and do — even though they're hard-pressed to figure out what to do with it.
The net answer: I strongly suspect we could rebuild a system like we had in the 1950's, but without its flaws — without the inherent racism, without the employer control — and frankly even better, because productivity has skyrocketed since then.
And the only reason we don't do this is because the people currently hoarding those resources — hoarding, as in they have them and can't even do anything with them! — are being given final say in how they get used.
A dragon-based economy is not a healthy economy.

There's no reason this has to be true. The assertion that companies' (and individuals') property rights in arbitrary amounts of wealth are absolute is not a law of nature; it's something we *decided* on as a society. It's something we can change.
Here's a radical idea: You already don't "own" your kidneys in the same sense that you "own" your shirt or your car. Your kidneys can't be seized by a court for payment of a debt, for example.
There's all sorts of historical precedent for this kind of difference. Until pretty recently, land was something "inalienably held" — you couldn't sell it, but it couldn't be taken from you, either.
(Footnote: People always say it was so great that people could sell their land, but what happened? People who owned a small bit of land were forced to sell at the first economic hardship, so they couldn't bounce back the way they could before.
That's exactly the "financial shock" theory of wealth in action, as linked above:… )
So going back to this idea: there's money and things you have and you use, like your house, your car, your savings account. (For those lucky enough to have those) It's pretty widely agreed that this stuff should be *yours*.
But if you control a $1B fund, that might not be "yours" in the same sense. At that point, you're controlling a significant fraction of your community's total wealth — maybe at that point, it's better to think of yourself as being its *steward* on the community's behalf.
We could argue about where the line between "pure ownership" and "stewardship" kicks in, and it probably shouldn't be a sharp line, but a continuum. But once you start talking about more money than you could spend, it's a good idea to talk stewardship.
You can run your business, you can grow it, you can make it big. Your personal bank account can grow to all the money you might need. And you could also find yourself steward of a great portion of public wealth — a position of importance and honor.
The only change is that you wouldn't have unilateral authority over all of it; rather, you were its steward *towards an end*. And in exchange for that, you get a different kind of payment: the chance to build something that will last beyond your lifetime. A community.
Is this outrageous? I don't think so. And this alone could have a substantial effect on our economy, enough to make a lot of the *good* ideas of the 1950's feasible again. And today, isn't that worth us considering? //
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