In this article, we shall discuss the 15 most socialist states in the US. To skip our detailed analysis of socialism and its integration with free-market economics, go directly and see 5 Most Socialist States in the U.S.
According to Britannica, socialist economics comprises a set of economic theories, political philosophies, and social practices which are best characterized by social ownership and operation of the means of production within any given economy usually through autonomous cooperatives or direct public ownership, wherein the primary purpose of all production is use and not profit. Instead of profit maximization, company policies are more geared towards profit optimization and more equitable distribution of company profit. There are numerous schools of socialist thought; however, the most prevalent one today is that of systems which utilize markets for allocating capital goods and factors of production amongst economic units. More traditional schools of socialist thought borrow from models of Marxian economics which more so provides a foundation for socialism on the basis of a critique of capitalism. However, as neoliberal economics and evolutionary economics garnered traction post the Washington Consensus in 1989, more comprehensive models of socialism sprang up particularly in Nordic countries like the Netherlands, Finland, and Sweden. Socialist economies dominated our list of the 30 Happiest Countries in the World.
The Nordic model is one of the most successful economic models in the world, and combines essential elements of free-market capitalism and social corporatism. It is incredibly popular in some of the most socialist states in the US. Although the model makes a commitment to private ownership as dictated by free-market economic doctrines, the Nordic economic model is characterized by elaborate socialist tenets like a social safety net, strong public pension plans, high levels of democracy according to the Democracy Index, free trade combined with collective risk sharing, low levels of corruption, high trade union density and collective bargaining coverage, and a strong history of worker rights protections. According to a research paper by L Mjoset, the Nordic model is best characterized as a system of competitive capitalism combined with an enormous proportion of the population employed in the public sector, in areas like healthcare and higher education. Although there are significant points of disagreement amongst Nordic countries with respect to their economic model, there are many common characteristics like an enormous amount of state owned companies across industries. Some of the biggest success stories to emerge from the Nordic model of economics are Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), Equinor ASA (NYSE:EQNR), and Novo Nordisk A/S (NYSE:NVO). To read more on some of the largest Nordic companies in the world, check out our coverage of the 25 Biggest Nordic Companies.
Integrating Socialism With Free-Market Economics: An Overview
However, the Nordic model of integrating capitalism and socialism is not without its adversaries, even in some of the the most socialist states in the US. According to Forbes, for every Denmark, Finland, and Sweden, the world has also seen a Venezuela, Cuba, and Vietnam. In traditionally poorer countries with large population densities, socialism is characterized by slow economic growth, less entrepreneurial opportunity and competition, and a potential lack of motivation by employees due to lesser cumulative rewards. Furthermore, socialistic systems also encourage reliance on cooperative pooling to generate economic growth. Economic competition is discouraged, and hence, there is little to no incentivization for innovation, entrepreneurial ventures, and economic dynamism.
Over the past couple of decades, the Chinese model of state capitalism has proven to be an economic success story in Asia for countries with large populations. State capitalism is another derivative of socialist thought, wherein the state acts as the largest stakeholder in the economy and functions as a single corporation, extracting surplus value from the workforce to invest it further into production. Dynamism is ensured by encouraging competition between multiple state-owned players for profit optimization instead of profit maximization. Derived from what is now known as the Beijing consensus, the economic model focused on incremental reform, innovation and experimentation, export-led growth, state capitalism, instead of a full tilt towards socialist planning or free-market economics, and authoritarianism. An antithesis to Western neoliberal thought and many of the presuppositions held by some of the most socialist states in the US, China’s economic model propelled it to drag millions above the poverty line, establish an economic superstructure which is equitable as well as dynamic, and landed the country a seat at the table of some of the largest economies in the world. Owing to a successful integration of capitalism and socialist economics, China featured on our list of 15 Socialist Countries That Have Succeeded.
A report by the Henry Jackson Initiative highlights some of the pitfalls associated with the current Western economic model of neoliberal, free-market economics. It reasserts that the free-market leads to the creation of natural monopolies making it difficult for other businesses to enter the market. Furthermore, it exacerbates economic inequality and a lack of public goods. Since producers are driven wholly by the drive to maintain their bottom-line, this objective is often prioritized over the welfare of workers and consumers. However, the report also realizes that the success of companies like Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), Equinor ASA (NYSE:EQNR), and Novo Nordisk A/S (NYSE:NVO), operating within market socialist economic models, is also an anomaly and not replicable in countries with different socio-economic, geopolitical positions as the Nordic countries. In its report, the Initiative noted that despite its many pitfalls, it is undeniable that capitalism has made the world healthier, richer and freer than ever, some thing which the the most socialist states in the US also find it difficult to deny. The report notes that profit maximization is a good incentive for businesses to innovate and bring about dynamism within a given economy.
Hence, the report delves into an elaborate exploration of different variables, both socialist and capitalist, which led to the success of Nordic companies like Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), Equinor ASA (NYSE:EQNR), and Novo Nordisk A/S (NYSE:NVO) and creates a model through which other companies can ensure that all stakeholders – not just shareholders – derive benefits from business. The three crucial areas which companies can work in are a successful navigation of the education gap by including widespread access to get people into the workforce, helping SMEs without compromising their own profitability, and reforming management and governance for the long-term. These policies can bring about economic growth whilst appeasing some of the most socialist states in the US.
Juli Hansen / Shutterstock.com
Our Methodology
To compile our list of the 15 most socialist states in the US, we decided to undertake a consensus-based approach using a diverse variety of credible sources and research which studied the history of socialist thought, voting patterns, and economic policies of each state in the U.S. (1, 2, 3, 4, 5, 6, 7, 8, 9, 10). We then shortlisted more than 30 states which appeared most frequently during our research. Since socialism is an incredibly dynamic and complex philosophy, we established a three-pronged criteria to measure the degree to which socialism is present in each US state; the criteria is premised on the economic policies of the state (15 points), the potency of its social welfare program (10 points), and regulatory intervention by the state (5 points). We then proceeded to award each state a cumulative score according to the aforementioned criteria and selected 15 states which scored the highest points. Subsequently, we ranked each entry based on the total points scored, from lowest to highest. Where there was a tie, we broke it based on the economic policies of the state.
15 Most Socialist States In The US
15. North Carolina
Total Score: 8
For much of its existence, North Carolina has been a supporter of the Democratic Party. The state spends exorbitant amounts of money on social welfare, making it one of the most socialist states in the US.
14. Ohio
Total Score: 9
Research by DJ Ryan explains the socialist origins and influence of the Ohio Constitution. Ohio has frequently voted for far-left, socialist politicians. The state has one of the best healthcare systems in the U.S. It also houses an extensive safety net, high taxes, and boasts relatively high regulatory involvement by the government in business affairs.
13. Kentucky
Total Score: 11
The Socialist Party of America maintained a strong presence in Kentucky for much of its existence. Today, Kentucky boasts one of the strongest social welfare programs in the country. Labor unions in the state are also highly empowered, making Kentucky one of the most socialist states in the US.
12. Vermont
Total Score: 13
As the home state of America’s most socialist senator in Bernie Sanders, Vermont is definitely one of the most socialist states in the US. Its consistent support for Sanders and other members of the Democratic Party, high taxes, and enhanced government oversight with respect to economic activity lands Vermont on our list.
11. Arkansas
Total Score: 13
Although tough to imagine in current contexts, Arkansas was a hotbed for radical labor organizing and socialist thought at the beginning of the 20th century. The state has green-lit numerous bills which expand the social safety net, increase taxes, and upscale investment into social welfare.
10. Mississippi
Total Score: 14
Although Mississippi is an enormous contributor to federal defense spending, the state government controls the type of products, the design and specification of products, and the number of products to be purchased. Government domination of markets, coupled with high tax rates, make Mississippi one of the most socialist states in the US.
9. Rhode Island
Total Score: 16
With massive public spending and high regulatory involvement of state institutions in economic activity, Rhode Island is one of the most socialist states in the US.
8. Wisconsin
Total Score: 17
With a rich history of ‘sewer socialism’ dating back to the nineteenth century, Wisconsin is known across the US for its pragmatic solutions to basic public services like water treatment, education, parks and libraries. Milwaukee especially has evolved dramatically at the behest of potent socialist economic policies and philosophies.
7. Wyoming
Total Score: 19
Wyoming has a rich history of socialism which peaked in the early 1900s, in mining areas across the state. With one of the best social welfare programs in the country and enormous concessions to labor unions, Wyoming is considered an incredibly socialist state to conduct business in.
6. Hawaii
Total Score: 19
Hawaii has one of the highest costs of living in the United States. This is supplemented by the second-highest tax burden in the country of 11.57%. As a hotbed of support for Democrat socialist policies, Hawaii is one of the most socialist states in the US.
Click here to continue reading and see 5 Most Socialist States in the US.
Suggested Articles:
- 10 Best Predictive Analytics Stocks to Buy
- 13 Best Shipping and Container Stocks To Buy
- 20 Countries With the Most Centenarians (People Over 100)
Disclosure: None. 15 Most Socialist States in the US is originally published on Insider Monkey.