Socialism vs. Welfare Statism vs. Free-Markets vs. Corporatism
One of the annoying things about America’s two-party system is that with so much of the political discussion locked in a “us vs. them” rhetorical stance it’s difficult to rise out and see how political models might move in a very different direction. We get so logjammed with overheated rhetoric that it’s sometimes difficult to capture the nuance of particular policies.
One area where this gets bandied about is in the cyclical critique that a particular policy is “socialist.” But most policies that get handed this critique aren’t “socialist” at all. Socialism is, strictly speaking, the nationalization of the production of goods and services. But here in the United States, the term “socialism” tends to get conflated with any government intervention in the economy, or any welfare state program. But they’re not the same thing. The way that GM was bailed out is, arguably, socialist, since the United States government is now the majority stakeholder in GM. The recently passed Health Care Reform Bill, on the other hand, is not socialist. Private insurance will remain private. Private hospitals will remain private. Private practices will remain private. It is instead properly thought of as welfare statism–part of a creation of a social safety net that attempts to mitigate risks that are outside of people’s control.
By conflating, as we often do, socialism and the welfare state, we ignore models by which free enterprise is compatible with a strong safety net. For example, Denmark, New Zealand, and Canada all have strong welfare states which include universal health care, yet all three are also in the top ten of the Heritage Foundation’s economic freedom rankings. It’s much easier to start a business in Denmark than it is the United States, for example–and people do at high rates! This despite Denmark’s higher levels of taxation. Now, would a Danish or New Zealand policy model necessarily be appropriate for the United States? Maybe, maybe not. But they provide an example worth considering where we can liberate markets while still providing a decent safety net. A rational analysis would be more appropriate than deriding every every attempt by the government to do something as being a “descent into tyranny.” Last time I checked, Canada and Denmark were not totalitarian hell-holes.
Additionally, there is also too often a tendency in this country–by both parties, to confuse being “pro-business” and being “pro-free-markets.” A TIF district to benefit a Walmart or a Costco might be “pro-business”, but in reality it represents an unfair government advantage for a large, national business against local, smaller businesses. Corn farmers are subsidized beyond the dreams of avarice. Major League Baseball is protected against competition. The list goes on. It’s even embedded in our tax structures. When we lower capital gains taxes, we tend to benefit large companies at the expense of smaller ones. All the tax-deferred retirement schemes benefits large businesses and financial companies to a much greater degree than small business. (Consider this — a small LLC which gives its employees a 401K plan with a match is almost certainly funding a larger, publically traded competitor through the operation of mutual funds.)
Even in areas where there is a technical violation of a deeply held liberty, that violation can still result in greater freedom. Consider the Civil Rights Act of 1964. Barry Goldwater argued, correctly, that the provisions in that Act which prohibited discrimination by private businesses was a violation of the freedom to assemble. But the inclusion of that provision led to a much greater de facto liberty than would have existed otherwise.
It’s important to remember that there was a split in the view of economic liberty and the role of government in business going back to the time of the Founding. Thomas Jefferson and James Madison took a dim view of corporations and banks, while Alexander Hamilton was their champion. Adam Smith argued that the joint-stock corporations of the day were inimical to free-markets, and Thomas Paine advocated a tax on wealthy landowners so the money could be redistributed to the community. Abraham Lincoln was a friend of the labor unions of the day, while trust-busting Grover Cleveland called in federal troops during the Pullman strikes.
None of these great arguments, however, play into the simple, partisan debates we have before us today–and I think that’s in large part to the further polarization of our two parties. I don’t think that partisanship is a bad thing, necessarily. After all, one of the points of having political parties is that you have competing visions for the polity. But I do think it’s a shame that one of the consequences of this particular polarized era is the way we tend to lockstep any and all policies into the worst slippery-slope strawmen that we have. Lord knows I’ve been guilty of that from time to time. But I do wish it happened less from everyone.