Capitalism and Poverty: A Socialist Analysis

Poverty is not created in a vacuum. Socialists understand that poverty is caused by the natural workings of a capitalist marketplace that has always excluded a significant part of the population from decent jobs and, thus, from the ability to purchase on the private market goods necessary for a decent life for themselves and their children. Socialists also recognize that poverty under capitalism is largely maintained by a skewed distribution of wealth and services, not by lack of a work ethic.

A socialist analysis of homelessness illustrates how the workings of capitalism cause one major aspect of poverty--a lack of affordable housing. Nearly twenty years ago, New York Mayor Ed Koch successfully closed many Single Room Occupancies (SROs), apartment buildings of one-room dwellings with shared kitchen and bath. SROs provided inadequate shelter for many of the city’s poor: alcoholics, the mentally ill and others unable to find permanent work or housing. Koch capitalized on the unpopularity of these abodes for his pro-gentrification agenda. Although SROs were hardly a paragon of housing, shutting them down inevitably increased homelessness, as did the Reagan administration’s deinstitutionalization of the mentally ill, without providing adequate out–patient treatment for this population.

Michael Harrington wrote about this troubling paradox in a 1988 piece “Socialism Best Informs Our Politics.” Harrington acknowledged that a democratic socialist, like any liberal, will defend SROs as an imperfect tool for preventing homelessness. However, a socialist will see the mayor’s actions not only as an act of illiberal inhumanity but also as part of the larger capitalist agenda to put profits above human needs and to treat the basic need for decent housing as a private commodity to be sold for profit. Socialists recognize that “gentrification” only benefits those who can afford expensive private housing. Socialism offers a vision of a just society that moves beyond piecemeal reforms. Socialists struggle not only to replace the SROs with a better government housing policy but also to create a society where everyone will live in good quality housing. Such a universal right to housing need not be provided solely by public housing; a mix of non-profit housing trusts, cooperatives and union pension-financed apartment buildings characterize much of the superior housing stock in such countries as the Netherlands and Germany. 

Socialists also understand the central role that deindustrialization and the resulting loss of well-paying union jobs has played in the devastation of our urban centers. If one travels to Detroit, the former auto capital of the world, one sees not only abandoned shopping centers but also vacated hotels and sports stadiums. But even in ostensibly wealthier urban centers, the financial sector’s gains do not eliminate poverty and the low-wage economy, as millions of non-unionized, vulnerable, low-wage workers work to serve the affluent 20% who represent close to 70% of American purchasing power. Thus socialists understand that our society won’t overcome poverty until democratic pressure from below forces the state to engage in the types of job training and public investment (in alternative energy, mass transit and infrastructure) that will create high-wage, productive jobs for all.

Growing numbers of Americans–especially the young–recognize capitalism’s unfairness and limitations. A 2010 Pew Research Center December 2011 poll found that 49% of young people (age 18-29) have a favorable view of socialism and 47%, a negative view of capitalism. Confronted by rising student debt and diminished job prospects, young Americans find our profit-driven society harder to justify.

The effort to re-elect an African-American president has enabled the Republicans to revisit racialized attacks on welfare. High unemployment caused by the recession diminished the effectiveness of workfare in getting unemployed single mothers into jobs. This jobs deficit led the Obama administration to accept (mostly Republican) governors’ requests that their states be allowed to experiment with new forms of fulfilling the workfare requirements, like job skills classes. Yet Republican advertisements juxtaposed videos of employed white workers with claims that the Obama has ended workfare requirements and sends “no strings attached” checks to welfare recipients. Of course, most welfare recipients are white. This “racialization” of welfare politics by both Republicans and some Democrats is an attempt to divide people by claiming that poverty programs only benefit “undeserving” poor people of color.

In reality, the Obama administration remains committed to strict workfare requirements, even though they prevent many poor mothers and children from accessing Temporary Aid to Need Families benefits. A study by the Center for Budget and Policy Priorities illustrates the brutal consequences of 1996 “welfare reform.” In 1995, 67% of poor children received welfare; today, only 27% of poor children do. The report estimates that food stamps are the only source of income for over eight million Americans, mostly unemployed single mothers and their children.

Ultimately, today’s anti-poverty advocacy could benefit from a socialist consciousness. Our social programs need defense and expansion. To achieve the long-term goal of abolishing poverty, we need a full-employment, productive, unionized economy. We also must present social and cooperative alternatives for the future, in which progressively raised public revenues finance the social provision of basic human needs–healthcare, childcare, education and housing.

Unbridled capitalism results in undemocratic policies. Thus, the more we can take aspects of economic security out of the market place, the more we can limit the power of private capitalists to determine our society’s future. Even liberals would agree that a strengthening of Social Security (a form of public pensions) would decrease citizens’ reliance on underfunded private and for-profit IRAs. Not every progressive knows that the fight to end poverty demands not only the expansion of universal forms of social provision but also an expansion of democracy itself. The visionary gradualism that Harrington wrote about nearly twenty-five years ago still guides the work of socialists today. Socialists work to critique the structural causes of poverty, and they envision a more just society than any well-meaning liberal can imagine. Despite our differences with our liberal allies, DSA believes that both socialists and progressives must strive to curtail unnecessary and unjust suffering today; but we must also do the “long distance” work of building a society that one day abolishes exploitation and poverty.

David Duhalde is pursuing a MPP/MBA with a concentration in poverty alleviation at the Heller School for Social Policy and Management of Brandeis University. Most recently, David was the Unemployment Insurance Summer Research Intern at the National Employment Law Project in New York City.  David was the National Youth Organizer for the Democratic Socialists of America and is current the Treasurer of the the Boston DSA local. 

Introduction to Socialist Feminism Call

June 27, 2017
· 77 rsvps

Join DSA activist Judith Gardiner to explore “socialist feminism.” How does it differ from other forms of feminism? How and when did it develop? What does it mean for our activism? 9 pm ET, 8 pm CT, 7 pm MT, 6 pm PT.

Data Security for DSA Members

June 27, 2017

Ack! I googled myself and didn't like what I found!

WHAT: A DSA Webinar about "Doxing"

We're proud of our organizing, and chapter work is transparent for both political and practical reasons. However, there are basic precautions you can take in this time of rapid DSA growth to protect your privacy.

Key Wiki is a website that meticulously documents DSA activity and posts it for the world to see. If you're an active DSA member, likely your name is on their website. This is an example of "doxing".

As DSA becomes larger, more visible, and more powerful, we might expect that more websites like this will pop up, and more of our members' information might be posted publicly on the web.

Join a live webinar on Tuesday, June 27 with data security expert Alison Macrina, to learn:

  1. what is doxing? with examples and ways to prevent it
  2. how to keep your passwords strong and your data secure
  3. where to find your personal info on the internet and how to get it removed
  4. social media best practices for DSA organizers
  5. what to do if you've already been doxed

Zoom Link:

Call-in Info: +1 408 638 0968
Meeting ID: 917 327 6528

Introduction to Democratic Socialism

July 06, 2017
· 22 rsvps

Join Rahel Biru, NYC DSA co-chair, and Joseph Schwartz, DSA Vice-Chair, on this webinar for an overview of what we in Democratic Socialists of America mean when we talk about "socialism," "capitalism" and the goals of the socialist movement.  8 PM ET; 7 PM CT; 6 PM MT; 5 PM PT.

  1. This webinar is free for any DSA member in good standing.
  2. You need a computer with good internet access.
  3. Your computer must have headphones (preferred) or speakers; you can speak thru a mic or use chat to "speak".
  4. If you have questions, contact Joseph Schwartz,
  5. If you have technical questions, contact Tony Schmitt,, 608-355-6568.

DSA New Member Orientation Call

July 09, 2017
· 6 rsvps

You've joined DSA - Great. Now register for this New Member Orientation call and find out more about our politics and our vision.  And, most importantly, how you can become involved.  9 PM ET; 8 PM CT; 7 PM MT; 6 PM PT.

Running for the National Political Committee

July 11, 2017
· 4 rsvps

Join this call to hear a presentation and ask questions about the role, duties and time commitment of a member of DSA's National Political Committee. In the meantime, check out the information already on our website about the NPC.

Feminist Working Group

July 12, 2017

People of all genders are welcome to join this call to discuss DSA's work on women's issues, especially in light of the new political reality that we face after the elections.  9 pm ET; 8 pm CT; 7 pm MT; 6 pm PT.

Film Discussion: Pride

September 10, 2017
· 12 rsvps

Join DSA members Eric Brasure and Brendan Hamill to discuss the British film Pride (2014). It’s 1984, British coal miners are on strike, and a group of gays and lesbians in London bring the queer community together to support the miners in their fight. Based on the true story of Lesbians and Gays Support the Miners. The film is available for rent on YouTube, Amazon, and iTunes. 8 ET/7 CT/6 MT/5 PT.

Film Discussion: Union Maids

September 24, 2017
· 11 rsvps


Join DSA member and labor historian Susan Hirsch in discussing Union Maids (1976). Nominated for an Academy Award, this documentary follows three Chicago labor organizers (Kate Hyndman, Stella Nowicki, and Sylvia Woods) active beginning in the 1930s. The filmmakers were members of the New American Movement (a precursor of DSA), and the late Vicki Starr (aka Stella Nowicki) was a longtime member of Chicago DSA and the Chicago Women's Liberation Union. It’s available free on YouTube, though sound quality is poor. 8ET/7CT/6MT/5PT.