15 Democratic Socialism Pros and Cons

Democratic Socialism combines the ideas of democracy and socialism into one governing and societal unit. According to the Democratic Socialists of America, there are three key reforms that are supported with this structure.

1. The desire to decrease that money has on politics within capitalistic governments.
2. The ability to empower every person in their workplace, their home, and their economy.
3. The need to restructure cultural and gender relationships to create more equality.

Instead of focusing on private profit or an attitude that rewards those who are able to survive, the process of Democratic Socialism is to create a humane vision where everyone has the chance to share their voice while have core supports available to them in a mutually supportive environment.

Here are some of the key pros and cons of Democratic Socialism to think about and discuss.

List of the Pros of Democratic Socialism

1. It reduces classism within local societies.
In Democratic Socialism, there are not “haves” or “have nots” because there is a sense of community ownership in all things. Private production is used for the public good. At the same time, individuals within the society are able to elect their government officials freely, without fear of political reprisal. That means the differences in wealth and culture are reduced because everyone is working toward a common good.

2. It gives everyone an opportunity to pursue success.
In a truly capitalistic environment, only those with means and opportunity can pursue options like good healthcare coverage or a college education. In the U.S., there is already a form of Democratic Socialism in place with the public schools offered in the K-12 grade range. This form of governing simply extends the concepts which are already working in a democratic society and applies them to other components of it. Each person has an opportunity to pursue their own definition of success.

3. It eliminates the threat of price fixing.
In Democratic Socialism, the government either controls, owns, or monitors every organization that provides goods and services. Instead of using free market demands to raise prices or form mergers or monopolies, the society is able to govern pricing and regulations to allow access to anyone who may need those items. There is no structure available that allows suppliers to alter pricing simply because there is a high demand for what they have.

4. It creates income equality within society.
In the United States right now, the inequality gap has been growing for more than two generations. In 1980, only 50% of children earned more than their parents. In 1940, 92% of children were able to earn more than their parents. The Top 1% of income earners in the U.S. bring in more than 20% of all income. In 1970, the bottom 50% of earners brought in more than 20% of all income. Adults in the top 1% earn 81 times more than adults in the bottom 50%, on average. Under Democratic Socialism structures, these gaps wouldn’t fully disappear. They would, however, become greatly reduced.

5. It reduces the threat of economic cycles.
During the Great Recession years of 2007-2009, many families around the world struggled to make ends meet. Jobs were lost. People were forced to find underemployment opportunities just to pay their bills. Since then, wages have exploded for the upper income tier, growing as much as 230%. For the bottom tier of income earners, some individuals haven’t seen a pay raise since 2007. Democratic Socialism reduces the threat of these economic cycles, making it easier for households to take care of their basic needs while still having income access to pursue opportunities.

6. It creates an economy that is more efficient.
Within the structures of Democratic Socialism, there is no longer a push to sell unneeded goods or services to consumers. That means less money is spent on marketing, allowing for more to be spent on production, innovation, or wage growth. People still receive what they need for comfort and daily living without the constant brand messaging demanding to be heard.

7. It offers more room for value judgments.
Products can be offered in a society based on Democratic Socialism that are based on value judgments instead of profit judgments. Even if production creates a loss, the government can subsidize production to make needed items available to everyone. In a structure based on capitalism, goods and services are based on profits first and value second.

List of the Cons of Democratic Socialism

1. It cedes more control over basic needs to the government.
Even though officials may still be elected, Democratic Socialism is still on the socialism spectrum. That means the government is given more control over how lives can be lived. There may be added benefits to social access, but that requires money, which means higher tax rates. Then there are fewer options available because the government is in control of the competition. At the end of the day, in its extreme form, the government would be telling everyone what they can do, where they can work, and what they can purchase.

2. It could cause a net financial loss instead of gains for families.
Even Bernie Sanders admits that higher taxes are required in such a system, with a 25% tax rate proposed for the median income earner in the United States under his plan. In the Sanders plan, the top tax rate would still be under 40%. That means a greater tax burden, relative to available income, is given to the middle- and low-income earners instead of the higher income earners.

3. It would limit the influence of unions, civilian oversight committees, and similar institutions.
Democratic Socialism would cede the rights of workers to the government through employment. If the government decides that having a union is not in their best interest, then they can get rid of it. Public employees have already experienced this in government structures that are closer to capitalism. That means there is a greater potential for unsafe work places, lower wages, and less overall incentive to work if all the physical needs of an individual are automatically met by the government.

4. It can reduce innovation.
There may be an advantage in Democratic Socialism in that people with specific skills or talents are placed into jobs that directly benefit from that experience. At the same time, however, production within a socialism-style government structures tends to focus on domestic needs instead of new opportunities. That limits innovation because there is little, if any, competition with the government to develop new ideas. Over time, that means the society can lag behind others that incentivize innovation.

5. It can create more bureaucracy.
The government will want to determine who is eligible to receive specific benefits. Applicants must fill out paperwork to prove their eligibility. Ongoing renewals must be processed. The goal of Democratic Socialism may be to streamline society and equalize access to services, but more bureaucracy is created in doing so. That means it could take much more time to make services available to those who need them.

6. It creates more government spending.
For an economy to grow, there must be a balance between domestic and foreign trade. As innovation declines and manufacturing grows stagnant, fewer international opportunities develop. That means the government may be forced to import more items, creating trade deficits with their neighbors. Without innovation, maintenance and repairs overages become common as equipment ages. In time, the government spends more than it would if it had simply invested capital into existing systems to upgrade them.

7. It can create a lack of societal motivation.
There will always be people within any society that do not participate in the workforce. In the United States right now, about one-third of all people who are of a working age are choosing not to join the workforce. Under a system of Democratic Socialism, those figures could increase even further. If there is no reward for producing more than someone else, yet both individuals have their basic needs met, the individual working is more likely to give up than the individual not working choosing to join the workforce.

8. It cannot prevent a corruptible government.
Human beings are fallible creatures. We are prone to mistakes. We are also capable of doing abhorrent things to one another in certain circumstances. Under the structures of socialism, no matter where it happens to be on the spectrum, there are fewer checks and balances in place to limit the effects of corruption. New leaders can be elected by the people, but not immediately. Hierarchies tend to emerge under this structure, with leaders working to shore up power where they can.

These Democratic Socialism pros and cons are an overview of the subject only. This structure is not Communism, which many claim, nor is it the “next evolution of capitalism.” It is somewhere in the middle, a proposed compromise by those who want more people to experience success. Basic needs are met, but with fewer incentives.

Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.