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CAPITALISM V. SOCIALISM

DATA | INSIGHTS | RECOMMENDATIONS

To: Political Advocacy Committee From: U.S. Chamber of Commerce Re: Capitalism v. Socialism Date: September 17, 2019 This memorandum details high-level findings and recommendations based on a review of public polling and research commissioned by the U.S. Chamber regarding the public’s views on socialism and capitalism.

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I. Understanding public sentiment towards “capitalism” and “socialism” While overall public sentiment strongly favors capitalism over socialism, capitalism has less support among several key demographics – women, Hispanics, and 18 to 34 year olds.

Winning the Issues (April 15-16, 2019; 1000 registered voters)

Research commissioned by the U.S. Chamber1 among adults under the age of 40 shows greater support than opposition for both capitalism (+19 points) and socialism (+10 points).

1 USCC commissioned survey among n=1,500 adults, ages 18-39, July 2019

Capitalism (Favorable – Unfavorable)

Socialism (Favorable – Unfavorable)

Overall 55-27 27-55

Republicans 71-15 15-73

Democrats 42-36 40-37

Independents 53-27 25-58

Women 41-33 28-47

Hispanics 45-43 34-54

18-34 44-38 40-42

51%47%

32%

37%

0%

10%

20%

30%

40%

50%

60%

Capitalism Socialism

Adults Under 40

Favorable Unfavorable

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Taking a deeper dive into younger adults, women under the age of 30 are evenly split between favoring and opposing capitalism. Men under 30, on the other hand, are twice as likely to hold a favorable view of capitalism as an unfavorable view. Both men and women under 30 hold net positive views of socialism.

Economic Insecurity One driver of younger Americans’ views may be their assessment of the economy and the ability to “get ahead” today. We asked adults under 40 whether they agreed or disagreed with the statement: “Nowadays most people have the opportunity to get ahead and build the life they want for themselves.” Only 1 in 5 strongly agreed. And women were almost as likely to disagree (42%) as they were to agree (49%). Of those who think people don’t have the opportunity to get ahead, most say it is because:

“the economy favors those who are already rich” (55%) and

“wages for most people are too low to get ahead” (52%).

40%48%

39% 37%

0%

20%

40%

60%

Capitalism Socialism

Women Under 30

Favorable Unfavorable

60%52%

30% 33%

0%

20%

40%

60%

80%

Capitalism Socialism

Men Under 30

Favorable Unfavorable

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Younger Americans are concerned about their own access to upward mobility. When asked what they worry about, 45% select “not being able to make enough money to get ahead.” Not surprisingly, only 1 in 4 said that their “personal economic situation” was getting better these days, while similar levels (22%) report it is “getting worse.” Nearly half (45%) said it is staying about the same. Policy Views Voters tend to view much of the current progressive policy agenda as socialist. However, that is not necessarily a negative label, given the support for socialism, especially amongst many Democrats and younger voters.

Would you consider each of the following proposals to be a socialist policy? Yes – No

Overall Republicans Independents Democrats

Medicare for All 63-20 70-18 66-18 55-23

Free College Tuition 61-21 69-18 65-19 51-27

Single-Payer Health Care 42-30 51-26 42-30 34-33

Green New Deal 41-26 53-17 40-29 31-31

70% Marginal Tax Rate 40-25 56-18 39-27 29-29

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Key Takeaway: We are not in the midst of a socialist wave, but there is work to do, especially with younger Americans. We should not discount their concerns about the economy and their own personal financial situation.

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II. Capitalism and socialism are not viewed as mutually exclusive solutions Many Americans don’t view capitalism and socialism in distinct “either-or” terms. According to a Pew Research2 poll, 1 in 4 Americans have a positive view of both capitalism and socialism. Demographic groups with a near equal “favorable” opinion of both include:

adults under 30,

African-Americans,

Hispanics,

those making less than $30,000 annually, and

Democrats This confirms what the Chamber found in its survey of those under age 40. Asked which type of economic system they prefer, socialism or capitalism, they indicated a preference for a system that is more capitalist, but not exclusively so.

This likely reflects the fact that many Americans see problems that they do not believe the current economic system is solving and more to the point, are not convinced that socialism cannot address some problems (as evidenced on the chart on the next page).

2 https://www.pewresearch.org/fact-tank/2019/06/25/stark-partisan-divisions-in-americans-views-of-socialism-capitalism/

0%

5%

10%

15%

20%

25%

0 1 2 3 4 5 6 7 8 9 10

With 0 meaning pure socialism and 10 meaning pure capitalism, what kind of economy would you rather have – one that is more capitalist

or more socialist?

Median: 6.39

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For each of the following outcomes, which system would be more

likely to deliver that outcome?

Capitalism

Socialism

Being able to provide good wages and income to support a family 50 25

Having a better future for the next generation 50 26

Having a good quality of life 50 27

Having a secure retirement 49 25

Keeping taxes low for the middle class 47 26

Being able to manage the cost of living 47 28

Having a system in which everyone gets a fair shot 42 33

Having a healthcare system that is affordable and accessible 40 37

Winning the Issues (March 30-31, 2019; 1000 registered voters)

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Key Takeaway: Many Americans, including our target audiences, do not view this as a fight between two mutually exclusive economic systems.

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III. Engaging in an ideological or political fight over socialism backfires with certain audiences

In focus groups conducted by the Chamber we learned that while older, more moderate Democrats reject the principles of socialism, they believe the term has become a smear used by Republicans. As a result, they are sympathetic to policies labeled “socialist.” The Chamber recently tested this in a poll of likely voters in a state with a competitive Senate race. Respondents were asked in a split sample whether they would be more or less likely to vote for a candidate who supported a list of progressive policies. Half the sample were asked the question with the word “socialist” inserted to describe the policies, the other half were asked without the “socialist” descriptor. As a topline matter, the use of the word “socialist” to describe the policies made no significant difference. However, this topline masks important movement in certain segments of voters. Strong GOP voters increased their opposition to the candidate who supported socialist policies, while independent voters were significantly more likely to support a candidate if their policies were described as “socialist.” Similarly, support for the “socialist” policies increased among soft Democrats. In short, simply describing policies as “socialist” can boost opposition from the Republican base, but in turn, it boosts support among Independents and soft Democrats.

More Likely – Less Likely

More or less likely to vote for a candidate… Overall Strong GOP

Independents Soft Democrats

who supports policies like a single-payer healthcare system, free college tuition, eliminating student loan debt, and a massive restructuring of our energy industry to combat climate change even if those policies mean higher taxes for the middle class.

37%-59%

12%-83%

32%-64% 68%-29%

who supports SOCIALIST policies like…(same as above)

39%-58%

3%-95% 49%-51% 71%-24%

Net Change Toward Supporting “Socialist”

-3 -20 +29 +9

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Similarly, ideological arguments, even when framed as a question of fairness, do not appear to resonate, at least not with Americans under 40:

Majority levels of adults under the age of 40 think specific socialist policies could be “fair.” Nearly 6 in 10 think it is completely or mostly fair to tax people at a much higher rate the more they earn, provide the same insurance to someone who works as to someone who chooses not to work, cancel all student loan debt, and redistribute income between the rich and poor.

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Completely / Mostly Fair (Completely Fair)

Government taxing some people at much higher rate because they earn more money

59% (23%)

Everyone getting the same health insurance whether they are working, unemployed, or choosing not to work

58% (29%)

Cancelling all student loan debt held by those who went to college and borrowed money to pay tuition and expenses

56% (27%)

Redistributing income so that the gap between rich and poor is smaller

55% (24%)

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Key Takeaway: In the fight to increase support for capitalism, we lose ground with key audiences if we simply rely on philosophical or partisan terms or ideology. We must recognize that younger Americans initially view socialist ideas as “fair” and advance arguments that cause them to rethink this view.

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IV. Socialism must be defined through practical examples, especially cost Demonstrating the personal costs of specific socialist policies is the most effective way to increase opposition to socialism. In the same survey of adults under 40, 51% thought that policies to provide universal healthcare, free college, forgive student debt, and combat climate change would be “unfair” if it required raising taxes on the middle class by about $19,000 a year.

A recent poll of registered voters in battleground districts revealed a significant increase in opposition to Medicare for All when survey participants were informed that “independent studies have shown that Medicare for All as proposed in Congress would mean doctor shortages, longer wait times for urgent medical care and delays in access to the latest drugs for cancer and other serious diseases.”

Net Movement Total Oppose

Overall -12 60%

18-44 -12 49%

Independents -14 58%

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Key Takeaway: Focusing on the personal costs of socialist policies is the most effective argument against socialism

39%

51%

0% 10% 20% 30% 40% 50% 60%

Fair or Unfair: Raising taxes on middle class people by about $19,000 per year to cover the expense of new programs that would combat climate change, forgive student loan debt, provide universal health care and

free college tuition to everyone.

Unfair Fair

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V. We need to build-up support for capitalism

While many younger Americans have a positive view of socialism, perhaps more disconcerting is the fact that, over the past decade, positive views of capitalism have fallen significantly.

Gallup A little education about the benefits of capitalism and the consequences of socialism, however, can significantly move the needle in support of capitalism. As part of the Chamber’s research focused on adults under 40, we tested support for capitalism and socialism initially without providing a definition of either. We later repeated the same question after serving a very basic and neutral definition: “Capitalism is an economic system where individuals and markets decide how resources should be distributed, while socialism is an economic system where government plays a major role in deciding how resources should be distributed. The results of this brief, controlled research exercise are displayed in the table below.

30%

40%

50%

60%

70%

2010 2012 2016 2018

Views of Capitalism and Socialism: Age 18 to 29

Positive View of Capitalism Positive View of Socialism

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It is worth noting that voters want to hear arguments about why capitalism is better and are less interested in hearing negative arguments about socialism.

Also of importance is the language used in any education efforts. Adults under 40 are more favorable towards the terms “free markets” and “free enterprise.”

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Key Takeaway: Education about why free enterprise works must be front and center. Voters want to hear arguments about why capitalism works and a simple definition can significantly move the needle. We can also strengthen the argument for capitalism with some audiences by using the phrases “free enterprise” and “free markets.”

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Conclusions: Quick Reference Guide

Capitalism v. Socialism: Do’s and Don’ts

Don’t oversell the economy. Do acknowledge that we can do better.

Don’t just use shorthand or labels

(e.g. “socialist”).

Do finish the argument about the costs

of socialist policies.

Don’t make it a political or

ideological fight.

Do make it about the personal costs of

socialist policies.

Don’t just attack socialism. Do build up capitalism.

Don’t make it an “either/or”

between capitalism and socialism.

Do recognize that people are more

interested in a solution than the system.

Don’t assume people know what

socialism and capitalism are.

Do provide a basic definition and use

“free market” and “free enterprise.”