Municipal Socialism: An Early Assessment
Almost six months into the Mamdani era, details have begun to emerge about how exactly “socialism” is translated into the municipal context.
Earlier this month, in celebrating New York City’s FY27 budget plan, the Mamdani administration declared victory not only for the mayor himself but for the Democratic Socialists of America.
Other commentators felt that other factors, such as Gov. Kathy Hochul’s political needs or deference to unions, have shaped the budget process more than socialist values. Still, sometimes it’s useful to take politicians at their word.
“Socialist” is not only a brand that New York Democrats use to distinguish themselves from one another in a one-party context. They mean it, or some appear to. And almost six months into the Mamdani era, details have begun to emerge about how exactly “socialism” is translated into the municipal context.
We’ve learned so far that the class war’s likely to be permanent, worker power’s promise remains dubious, and socialist New York will be a more inward-oriented place than the city it replaced.
The Class War Will Be Permanent
Managing the politics of deficits is a crucial test for any mayor. Mayors need to appear to control the budget and, by extension, the city government, distinct from the numerous advocacy organizations demanding more money or legislative bodies. That’s true even when the budget’s in deficit, as with New York City this cycle.
Mayor Mamdani’s contribution to the art of budgetary politics has been to reframe the deficit in class-war terms. There is no recession. Therefore, the only explanation for why New York doesn’t have enough money must somehow lie in under-taxation of those who can and should pay more (not overspending). Mamdani has been able to treat the deficit (initially estimated at $12 billion) as almost a political gift, since he can’t be blamed for it, since he inherited it, and he wants to tax the rich for his own socialist reasons. He wants to tax the rich to forge class consciousness.
New York’s diversity is often seen as a cause of its deep-blue politics and could therefore also be seen as contributing to the city’s conduciveness to socialism. But standard explanations for why socialism never thrived in America point to diversity as a major reason1.
Let’s define “working class” in New York City as a household income between $50,000 and $100,000. That’s close to 800,000 households. They’re pretty diverse, but socialists see them as natural allies who just don’t know it yet. Workers need to think of themselves as workers if they’re to be united against capital. Mamdani can do by calling for taxing the rich, which he can keep doing for the foreseeable future, because New York’s budget is projected to remain structurally imbalanced for the foreseeable future.
Mayor Bill de Blasio also saw taxing the rich as an end in itself. Early in his mayoralty, de Blasio saw a pre-K program funded by taxing the city’s wealthy as superior to one funded by general state revenues. But that was a temporary goal set during de Blasio’s 2013 mayoral campaign. He frontloaded his class warfare, then moved on to other initiatives and controversies, many of a non-economic nature.
Socialists, as distinct from leftists as a whole, pride themselves on their disciplined focus on economics. They revere Sen. Bernie Sanders because he has never changed. So, Mayor Mamdani’s recent Wall Street charm offensive notwithstanding, New York City’s class war has just begun.
Worker Power Underwhelms
But even if workers in New York gained more power, would that be a good thing? Not according to the experience of pension governance.
That experience has been on display throughout the FY27 budget cycle.
At the state level, unions have been demanding benefit increases. At the local level, Mamdani wants to cut contributions and supports increasing benefits. Every single pension-related idea floated during this cycle has been fiscally irresponsible, suggesting that both New York’s working class and its socialist leadership aren’t up to the challenge of socialist governance.
A socialist-led working class doesn’t just want more money from capital; they ultimately want to run the economy by transferring control over major corporate entities from capital to labor. Socialists believe that a labor-led economy will be better in all kinds of ways—fairer, less crisis-prone, more long-term oriented, you name it—than with the billionaires in charge.
Many of us have trouble imagining that scenario. How would an Amazon run by its employees function differently from one run by Jeff Bezos? Thus, the value of seeing pension system governance as a proxy for socialist governance. Pension funds may not be businesses, but they are multi-billion-dollar entities over which unions wield massive influence and are forced to make crucial strategic decisions, such as howto balance members’ short-term vs. long-term interests.
Nationwide, state and local pension systems are underfunded by $1-5 trillion dollars (depending on the actuarial assumptions), in a few cases, they’ve made cities insolvent, and their insatiable employer contribution demands ($10.4 billion this year in the case of New York City, a sum exceeding the budgets of all agencies but two) have deprived government service systems of critical investment. None of that would have happened had unions and progressive officials avoided the kind of gimmickry and benefit sweeteners Mamdani and the unions are lobbying for.
The billionaires can make a strong argument: someone has to be in charge of the economy’s commanding heights, we stand proudly behind our leadership record, and if labor replaces us, everything will go downhill. We know this because the examples we do have of worker power in America, such as pension governance (and, by the way, faculty governance in higher education), are almost never invoked as examples of effective governance.
New York’s Turning Inward
Scholars of municipal government have long debated whether internal factors, such as interest-group pressure, or external factors, such as economic competition with other states and localities, determine policy outcomes.
‘Accountability to voters is paramount,’ we have been continually reminded during our populist times. But within the American federalist system, one definition of leadership is mayors and governors stepping back from vote counting and taking a broader, longer-term view of the competitive context.
A local leadership truly desperate to compete against other states and localities probably wouldn’t do something like start America’s second-largest housing voucher program after the federal Section 8 program. But they would do it if they were desperate to make local activists happy.
Mamdani and many others across the broader left complacently dismiss the idea that New York needs to worry about competing for billionaires.2 Mamdani certainly competes for attention. His view of New York, relative to other states and cities, resembles that of Swedish Prime Minister Olaf Palme’s view of his country as a “moral superpower.” Virtuously socialist New York will lead by example. But this is a concept of competition that translates more into media hits than economic activity.
Regardless of whether a city wants to compete for billionaires, it should strive to compete about something meaningfully economic.
This is obvious during crisis conditions. New York benefited handsomely from the fact that, coming out of 9/11, Mayor Bloomberg’s economic development team was determined to take nothing for granted. Just as local leaders should handle the budget responsibly, whether or not it’s in deficit, they should also stoke competitiveness into the local economy even when it’s not in a state of collapse. Complacency is a vice.
Municipal socialism, based on what we’ve seen so far, seems inclined to take local socioeconomic conditions for granted. A budget that holds everyone harmless is excellent. Keep the money circulating throughout the local system of services funded, provided, and/or regulated by the government. To keep the billionaire globalists from living in your mind rent-free, don’t think too much about what Florida or Texas are up to. Municipal socialism embraces an inward-looking political model well suited to the populist era.
“…immigration created an extraordinarily diverse labor force in which class coherence was undermined by ethnic, racial, and religious identity. The importance of this has been noted by many observers of the American labor movement, including Marx and Engels. Ethnic diversity hurt socialists, who appealed to workers along class lines, and helped Democrats and Republicans, who had no inhibitions in making ethnic appeals.” (Seymour Martin Lipset and Gary Marks, It Didn’t Happen Here: Why Socialism Failed in the United States (New York: W.W. Norton & Company, 2000), p. 125
Not every socialist believes that capital will always chicken out. In The Socialist Manifesto (2019), Bhaskar Sunkara speaks respectfully of the threat of “capital strikes,” which are “perfectly rational in conditions of reduced profitability or high uncertainty.” If lockout threats are serious business, why shouldn’t firm relocation to Miami be, as well?
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