Stop Worrying About Socialism

New York City mayoral candidate Zohran Mamdani is grabbing headlines and causing a panic among conservatives and some democrats alike that, if elected, he would force a socialist/Marxist governing model onto the nation’s largest city. Given that he has a healthy lead in all the polls, his ascendence appears likely.

It is a well-known fact that for societies of free people (like the USA), the socialist governing model has failed everywhere in the world where it has been tried. Yes, there are a few countries in the world today that do operate under socialist or communist governments, notably China, North Korea, and Cuba. In these countries, citizens have no recourse but to endure the negative effects that socialism or communism brings. Also, the people in those countries do not have the kind of personal liberty and freedoms so deeply valued here in the US and in other democratically styled countries.

The question is, how worried should we be, or more significantly, how worried should New York City residents be, about Mamdani? Well, New York City residents can’t be that worried since the majority of them want Mamdani to be mayor, at least according to the polls. Why is this? We see two reasons:

• They are woefully uneducated about the meaning of socialism and Marxism and how it has performed throughout history in societies of free people.

• They don’t care about those historical facts and are focused instead on a promised immediate economic benefit to them.

Redistributing wealth and abandoning a capitalist economic model in favor of a government run economy is being presented to voters as getting “something for nothing”.  For those already receiving financial benefits from the city government, and who believe they should receive even more, this kind of immediate gratification is all that matters.

Lower and middle-class residents, already suffocating from the staggeringly high cost of living in New York City, are predisposed to gravitate to what Mamdani is promising. The fantasy of newfound prosperity without having to spend any extra effort to get it is a cruel empty pledge. Having that fantasy preached to them by a young, well-spoken, and engaging politician may prove too powerful to resist.

Back on planet earth, Mamdani’s plan to pay for all his promises runs contrary to all reason. New York City already has the highest top income tax rate of any city in the country – 14.776% (10.9% state + 3.867% city). The city also has the highest corporate tax rate in the country at 16.49% (7.25% state + 8.85% city + 0.4% MTA). Because of this, wealthy residents and corporations are moving out of the city to more tax friendly locales and choosing not to incur this oppressive tax burden. They can do this because we are a federal republic of free states here in the US, and not a single socialist or communist state. More than 370 corporations have left the city during the last five years, during which time the city’s population has decreased by 631,000 people, a 7.4% drop.

Mamdani plans to fund his socialist agenda by increasing the taxes on corporations and wealthy residents even further. Given the exodus from the city in the last five years, it’s reasonable to assume the flight of corporations and high earners will accelerate. So even with a higher tax rate, the result will be less overall revenue for the city because fewer people and companies will be paying any taxes. Mamdani won’t have the money to pay for all the goodies he’s promising to voters (free bus rides, free child care, free tuition at City University of New York, freezing rents, etc.). The city will either incur a large debt¹ or will have to make trade-offs with other city services, like policing, to remain solvent.

Driving the rich people out by way of excessive taxation is the exact opposite of what is needed to save the city. For Mamdani, this is where economic truth destructively collides with his Marxist ideology. Mamdani articulated his ideology best during an interview on NBC’s Meet the Press when he said, “I don’t think we should have billionaires because having such vast wealth is problematic during a time of significant economic inequality”.

The problem is that the US was not founded on a principle of “economic equality”. That phrase is nowhere to be seen in either the Constitution or the Declaration of Independence. Also, love them or hate them, millionaires and billionaires currently provide most of the tax revenue at the federal, state and local levels. Logic dictates that these people should be encouraged to live in cities and towns that depend heavily on local income taxes for revenue. The best way to do that is to keep the tax rates on high earners low enough so they stay.

The rest of the Mamdani agenda is standard socialism with a small touch of communism mixed in. For example, he wants there to be government run grocery stores. He is not advocating that the government take over existing grocery stores – that would be true communism. His grocery stores would presumably have lower food prices by taking out the profit part of the equation and be able to compete favorably with the existing stores. It sounds good in theory, but this is just another example of why socialism doesn’t work within a free society based on capitalism. Here’s why:

The existing grocery stores will not simply stand idle while a new competitor moves in attempting to undercut their prices and steal their profits. They will respond as they would to any other rival, with things like special offers, additional services, and a heavy dose of marketing and advertising.  Also, government grocery stores would have to compete for the best employees, the best bulk pricing, constantly refreshed stock, efficient checkout, convenient locations, good parking, a fast and friendly service desk, other in-store services (banks, Starbucks, custom deli and bakery services), etc. All these things matter, and customers have become accustomed to them. The top grocery store chains have evolved and fine-tuned these services over a period of many decades. Does Mamdani believe he can match that overnight? Does he think customers will give up all those other things just to have marginally lower prices?

Most importantly, would he be able to gain and keep the trust of the consumer? In highly competitive businesses such as this, advertising and marketing can be ruthless. How would Mamdani prevent the inevitable advertising campaign that the food in the government stores is not as good because it is “cheap”? The fact is that government has never been able to effectively compete with private industry at any level. This foray into the grocery business will be no different. New York City will end up learning a lesson that is apparently new to them, but well-known to others throughout history.  

Should Mamdani win the mayoral election this November, the sky will not fall, and New York City will not turn socialist. At worst, the city will lose more corporations and affluent people due to stupidly high tax rates and face either bankruptcy or (more likely) a slate of broken promises from its new mayor. Either of these outcomes is disastrous for the city, but socialism will not be one of them.

¹ Although New York City is bound by law to have a balanced budget, they have been getting around that law as of late. The city budget has been in severe deficit in each of the last two years (over $1 billion in 2024 alone). By carrying over budget surpluses from prior years, the city is able to mask an underlying fiscal deficit in recent years (which is growing). When those past surpluses run out (soon), the city will face a massive budget reckoning unless spending is drastically cut or taxes raised even further.