Democratic Socialism’s Mirage

I am a native New Yorker — that’s right, born in Manhattan. I worked most of my career in New York City. I am also a capitalist — why? Because I recognize that everything in my life is the direct result of capitalism — every innovation, every tool, every social media platform is a direct result of, yes, capitalism. I have seen the failed welfare state from the inside as an apartment owner of Section 8 housing. I have seen the fraud that goes unchecked year after year. I have also seen first-hand the effects of regulated housing and rent stabilization. The prospect of a democratic socialism becoming the mayor of America’s greatest city is scary and sad.

New York City Elections

As a former resident and professional in THE city, I’ve witnessed its highs and lows — from abandoned housing in the 1970s to the city’s great renaissance ushered in by mayors Guliani and Bloomberg. The city has been in economic and social decline ever since. Now, a new mayoral election looms on November 4, 2025 and Zohran Mamdani, the Democratic Socialists of America-backed candidate, holds a substantial lead in recent polls — 48% in the Marist survey, compared to Andrew Cuomo’s 32% and Curtis Sliwa’s 16%. His platform of rent controls, wealth taxes, and expanded public control over housing and healthcare raises serious concerns for the city’s future.

I am old enough to know what Times Square looked like in the 1970s and 1980s and in a recent visit to NYC, it was clear that we are headed back to those days — and fast. Back then it was window washing pan handlers, now its aggressive characters accosting tourists for pictures. If you walked 42nd street in 1983, you saw drug dealers everywhere. Now in 2025, they are back — just now a few are legal. The common denominator of these returns to dark times? Incompetent city leadership.

The Democratic Socialist

Enter Zohran Mamdani, a self-proclaimed Democratic Socialist. What does this even mean? Democratic socialism seeks to achieve social ownership of key industries — such as healthcare and energy — through democratic processes, rather than revolutionary upheaval. It’s exemplified by proposals like Bernie Sanders’ Medicare for All, which aim to redistribute resources for greater equality.

Communism, in contrast, calls for the complete abolition of private property and class structures, often through authoritarian means, as seen in historical examples like the Soviet Union. Yet, the lines blur in practice. Both systems rely on coercive redistribution, which can lead to centralized control and diminished individual freedoms.

What does this Mean in Practice?

In socialist frameworks, a new elite — often bureaucrats — emerges, wielding disproportionate power. Mamdani’s advocacy for “public control” of housing mirrors this, potentially shifting decision-making from individuals to the state. No matter how noble the intent, reality is starkly different. As George Orwell illustrated in Animal Farm, “All animals are equal, but some animals are more equal than others.” This is the inevitability of Democratic Socialism.

Capitalism: The Natural Order of Human Ambition

From my own experiences building a career in New York, I’ve come to see capitalism as an extension of human nature. Our evolutionary history, shaped by scarcity and competition, favors self-interest, innovation, and voluntary exchange. These traits have driven progress, from the tools I use daily to the platforms that connect us globally. Socialism and Communism, by enforcing equal outcomes regardless of effort, disrupts this natural dynamic. It suppresses the incentives that motivate people to create and improve, leading to inefficiency and resentment. When systems ignore our inherent drive for personal achievement, they inevitably falter.

Take the example of China —despite being governed by the Chinese Communist Party since 1949, China’s meteoric economic rise over the past four decades is largely attributable to its strategic embrace of capitalist principles. Beginning with reforms in 1978, the country opened up to foreign investment, established special economic zones, and encouraged private enterprise, transforming it from a centrally planned economy into the world’s second-largest by nominal GDP, lifting hundreds of millions out of poverty through incentives for innovation, competition, and global trade. This adoption of economic capitalism has fueled unprecedented growth and now, innovation too.

The Inevitable Bust: Why Democratic Socialism Fails

Democratic socialism’s shortcomings are evident in economic theory and history. The “economic calculation problem” highlights how central planners struggle to allocate resources without market-driven prices, resulting in shortages — as witnessed in Venezuela and the former Soviet Union. High taxes and regulations further erode incentives, discouraging entrepreneurship and investment.

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The Late Margaret Thatcher — Former Prime Minister United Kingdom

Fiscal sustainability is another critical issue. As Margaret Thatcher observed, “The problem with socialism is that you eventually run out of other people’s money.” While Nordic models are often cited as successes, they rely on underlying capitalist structures with strong free markets. But how many new innovations come out of the Nordic countries?

In New York, Mamdani’s proposed tax increases and rent controls could exacerbate wealth flight, which has already cost the city billions in revenue from departing high earners. This might lead to more company departures and stalled business development, diminishing the vibrant economy I’ve known throughout my career.

Top Earners Have Choices

I live in Texas now and I’m not alone. According to recent reports analyzing IRS migration data, New York State (with a heavy concentration from New York City) experienced significant out-migration of high-income earners between 2020 and 2022. Approximately 225,000 individuals in the top 20% of earners (household income over $172,000 annually) left the state during this time, disproportionately originating from NYC. Data for 2024–2025 is not yet fully available, but trends suggest continued, though slowing, outflows.

Outsized Tax Impact of Policies

Due to New York’s shrinking share of U.S. millionaires (falling from 12.7% in 2010 to 8.7% in 2022), the state forewent an estimated $10.7 billion in additional PIT revenue in 2022 alone, equivalent to what 32,000 more millionaires would have generated, while NYC lost out on $2.5 billion (equivalent to 15,000 more millionaires). Separately, the migration to Florida resulted in a $14 billion loss in adjusted gross income from NYC between 2018–2022, implying billions in forgone taxes given the top 1%’s 40% share of state income taxes overall.

The Human Toll: Socialist Programs’ Statistical Shadow

As a Section 8 landlord in New York City, I’ve witnessed firsthand the unintended consequences of welfare programs that were meant to be lifelines but often become anchors. These initiatives from the 1960s promised to eradicate poverty through social programs. These efforts more than tripled federal expenditures on health, education, and welfare, growing to over 15% of the federal budget by 1970. However, over the decades, they’ve contributed to profound social shifts.

Poverty rates, which had been declining steadily — dropping 40% for Black families between 1940 and 1960 through education and economic gains — stagnated after the mid-1960s, hovering around 12–15% with no net progress despite trillions spent. Family structures frayed under perverse incentives: Benefits structured around single-parent households discouraged marriage, leading to a surge in single-mother families from about 9% in 1960 to over 27% today, particularly in low-income communities. This breakdown correlated with rising crime rates in welfare-dependent areas, as idleness and fractured homes fostered environments ripe for delinquency, with urban crime spiking in the 1970s and 1980s before later reforms.

The Addiction Cycle

Compounding this is the phenomenon of dependency addiction — a cycle where reliance on aid becomes habitual, eroding personal initiative and trapping families in multi-generational loops. Studies show that while some use welfare briefly (some exit within a year), a significant portion — upwards of 70%+ — remains long-term or returns intermittently.

This isn’t mere assistance; it’s an enabling force that sustains a culture of stagnation, as I’ve observed in tenants who cycle through programs without upward mobility, their children inheriting the same patterns. I recall having an entire extended family; Grandmother, Mother and Daughter, each with their own Section 8 benefits in the same apartment building.

The unintended effects don’t end there. The programs foster a culture of limited ambition, reflected in low-performing schools where dependency-linked poverty doubles dropout rates and lowers test scores by 30%. Crime rates climb 20–50% in high-welfare zones, and economic output trails 15–25% below average.

Shocking Fact: Did you know that 59% of illegal immigrant households use at least one federal program? See the report here.

New York City’s Wake-Up Call

I am passionate about New York City even though I’m not there much these days, but I’m even more passionate about capitalism. Zohran Mamdani frames democratic socialism as “life with dignity” — envisioning a utopia of free buses, public grocery stores, universal healthcare, and housing for all, where no one is left behind in the grind of city life. All shiny promises to be sure — alluring to many voters.

Certainly, the cost of living has spiraled, and lower and middle-class families are definitely getting squeezed. I am sympathetic to this struggle. It is real and unrelenting. But here’s the harsh reality: You get what you pay for in life, and Mamdani’s vision of endless “free stuff” ignores that fundamental truth. The irony of these social programs — rooted in the democratic socialist ethos — is that they don’t uplift; they perpetuate and exacerbate the very problems they claim to solve.

They foster a vicious cycle of dependence that echoes generation after generation, trapping families in poverty’s grip while eroding ambition and innovation. The promise of “social dignity” rings hollow, unmoored from the real-world dynamics of human nature and economics. In truth, the more “free” handouts we dole out, the more expensive they become in societal terms — draining resources, inflating taxes, and accelerating wealth flight that hollows out communities.

If you want to really improve the lives of New Yorkers do it through the capitalist system. Incentivize grocery stores by providing economic incentives and combat theft in lower income stores by enforcing the law (Mamdani is a defund the police advocate). Work with real estate capital to develop mutually beneficial programs to spur development instead of putting real estate owners on a death spiral of fixed revenues but inflating expenses. And perhaps the most important of all is to reduce taxes — keep your high taxpayers there and encourage business to be there.

Unfortunately, it seems that sometimes you can’t stop a train wreck even if you can see it coming from miles away. So, to Zohran Mamdani, I wish you well. Maybe reality will educate you on the benefits of capitalism and you can get New York City off the tracks in time.

Let me know what you think.