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.
Alex, your points make sense, but that’s not the point of the comment. Did Dr. Joyner invite you for lunch and give you a clear-out time of April 9 for your office following this post?
(Yes, I’m resorting to semi-inside jokes. It’s Friday.)
On the other hand, Fascism keeps private ownership of the commercial sector but under strict government direction. To that end, the Obama administration employs a mix of Socialism and Fascism.
One could argue that it is still all Socialism, given that one is akin to International Socialism and the other is a strict National Socialism.
I like (as I’ve just said) government spending as a percentage of GDP as a nice translatable measure of Socialism. It isn’t perfect, but it averages across many disparate government strategies.
The obvious problem with spending as a measure of “statism” is that it misses regulation entirely. The government requires me to buy headlights for my car. That reduces my freedom. My headlight purchases count as GDP, but not as government spending. (I don’t suppose anyone here is so hard-core libertarian that they’d roll-back the headlight requirement 😉
As you say Alex, a lot of it is about what you are trying to measure, and what word you want to use for it.
I do think the economic freedom thing for Denmark is a little weird, probably because despite stories from my Danish relatives, it is a very foreign culture to me. (I believe store hours are legislated, and alcohol may not be purchased after 8pm, as a couple data points.)
That said, I don’t find the Danish system scary, or necessarily unpleasant.
and one could argue that there is nothing inherently wrong with socialism other then irrational fear. But so what? Economic systems don’t kill people, people kill people.
@ John
There’s no difference at the bottom line between fascism and socialism… as Hitler himself noted. And in the current application….
… means that government is the defacto owner.
Actually, all the top countries have exceedingly high “business freedom.” America’s is ever-so-slightly worse because of overlapping regulations created by our Federal system.
I tend not to think of regulation, which much of ObamaCare amounts to, as socialism even though it has the effect of a nominal “taking” of private property and converting it to government use. I do think the expansion of Medicaid is socialism. And the “public option” would have been socialism, too. The Health Care Exchanges could morph into socialism but they’re not that now.
It depends on which socialism and which fascism you mean, Eric. Modern Danish socialists are a bit different than old German Fascists.
But in terms of measures of state involvement in the economy, I believe that some try to estimate how much of GDP is “directed” and move that to the “state” side of the “government spending as a percentage of GDP” equation.
John425 hit the nail on the head. HCR is not socialist; it is objectively fascist.
People associate that term with jackboots and concentration camps, but that’s National Socialism. Fascism is a “totalitarian philosophy of government that glorifies the state and nation and assigns to the state control over every aspect of national life.” Or, as Mussolini hisownself put it: ‘authoritarian’, ‘social’, and ‘popular.’
When private companies are left private but production directed by government, it’s fascism in its purest form. And we’ve been progressively becoming more fascist for decades. That progression has increased significantly the last few years as profits for huge segments of the market have been officially left private while the risks have been socialized. HCR is simply another escalation.
Eric,
I would say that your conflation is an oversimplification. Fascism isn’t just about political control of the economic sphere–it’s about political control of every sphere. One can imagine a socialist country that nevertheless maintains freedom of speech and a representative democracy. Fascism, on the other hand, by definition doesn’t allow for either.
That said, I do believe that economic liberty should be encouraged, which is why I’m not a socialist. I do not believe, however, that a welfare state is necessarily incompatible with free-markets or general political liberty.
Well in our system the government is the defacto of everything since they have the constitutional power to grant (and by extension un-grant) charters of incorporation. Corporations are creatures of the state and therefor a statist institution. Stalin was a statist so by Glenn Beck logic corporations are communist.
But really this whole socialist=horror meme is so so stupid. Most businesses love socialism as long as it pertains to risk. There is nothing inherently wrong or destructive about socialism other then in the twisted minds of hardcore ideologues.
Dodd,
Is every government intervention in the economy fascist? That seems to be quite an oversimplification to me. If there are no legitimate government regulations of the economy, then the only legitimate political form is anarchism.
Hell, socialism isn’t necessarily incompatible with free-markets or general political liberty.
Until I see states like Iowa, Kansas, and Nebraska rejecting the last century of US farm policy this idea that socialism is inherently evil won’t pass the laugh test.
Spam filter is awful aggressive today
You’ve got to admit Dodd, the only people who really owned the word Fascism were the jackboot types. (LOL, literally, they all wore jackboots.)
Take Argentina, or Cuba, for example.
Oh… wait…
Alex, you’re arguing , however correctly, inside the context of the college debate society. I’m arguing from the standpoint of what people actually go through. In short, reality.
Dodd,
You are right about the fact that Nazism and fascism, per se, are not the same thing.
However, I have a difficult time agreeing with your application of the term.
By that definition any government regulation is “fascism” which is a rather odd definition of the term. I am not sure it is possible to have a modern states sans regulations. I suppose it depends on what you mean by “production directed by the government.”
How much “direction” makes a regulation “fascist”?
Is it fascism if I am told that I can only drive my privately owned automobile on the right side of the street?
Is requiring certain workplace safety regulations an example of fascist policy?
Mussolini:
Yes, that sounds just like the United States. (Although, I am sure, some people will say that it does). We are far too pluralistic for the above to make sense in the US context.
I can’t see how requiring people to buy health insurance, or expanding Medicaid, fits the above definition of fascism.
It’s fun to say “I have headlights on my car because the fascists require it.” It’s a bit more of a problem to believe it.
Alex:
You are attempting nuance and precision. Please surrender your blogger credentials.
That’s the oversimplification. There’s a broad middle ground between requiring every citizen to buy health insurance (turning it into a de facto public utility owned by private persons) and anarchy.
Again, regulation isn’t necessarily fascist. Nor is it automatically free of the taint. Broadly and very loosely speaking (for purposes of a friendly discussion thread), when the gov’t limits harmful acts, it is exercising its legitimate police power. When it requires private industry to act in certain ways, it starts to look like fascism. Thus, prohibitting dumping of harmful chemicals is legitimate (not necessarily by the federal gov’t in every instance, of course) but dictating permissible private profit is fascist.
@reynolds:
Fine. Let’s try it with nuance and precision. Is it possible that in some lab somewhere, there’s a big enough difference between Fascism and the other kinds of socialism to allow what Alex says to be true.
But out here in the real world, there’s no working examples of it.
“Thus, prohibitting dumping of harmful chemicals is legitimate (not necessarily by the federal gov’t in every instance, of course) ”
We prohibit this dumping because it will harm people’s health, maybe even kill them. People’s quality of health, and sometimes their lives are lost, when they are unable to afford health care. This is a growing problem as more employers drop their employees from their plan.
To the larger topic, fascism has multiple definitions and descriptions. italian fascism was different than German fascism. It is mostly used as a pejorative with little regard for what it really means. So, any time the state does something, imposes a law or regulation with which we disagree, we call it fascism. Was it fascism taking us into a war of pre-emptive aggression? How about abortion? German fascists forbid Aryan women having an abortion. Are pro-life people than fascists? This is an absurd label, for the large part. We should debate and vote upon these laws based upon their merits or demerits rather than try to link them to a political movement which, frankly, few understand anymore.
Steve
Eric:
I have no idea what you just said. Can you explain?
What I find interesting on the Heritage freedom scale is Singapore’s ranking at #2. Whats odd is that 60% of Singapore’s GDP comes from government “linked” companies.
So is this a “free” economic society or a state run economy, or a mix of the two?
Also, virtually all of the top 30 ranked countries have some sort of “socialized” medical plans.
So how does that square with the doomsday scenario of government mandated healthcare somehow destroying the “capitalist” market competitiveness of economies when the Heritage Foundation and the WSJ, both bastions of right wing conservative orthodoxies, rank these countries so highly on their economic freedom list?
Is it possible that socialist countries aren’t the dystopian nightmares so often portrayed by the right in defense of deregulation and government interference in the market?
@Eric,
Are you making the argument that Argentina is a totalitarian state? They have free elections, a free press, a Congress, political parties, etc.
Cuba, on the other hand, is most certainly a totalitarian state. But I don’t recall arguing that socialism is incompatible with totalitarianism–of course it is. You’d be a fool to argue otherwise.
I don’t know about that. Lot’s of democratic countries have signficant amounts of economic nationalization without devolving into totalitarianism. I mean, even Alaska doesn’t allow private ownership of its oil fields, instead maintaining them as public land and extracting lease payments out of the oil companies. For my part, I think that nationalization is generally a bad idea. But it’s undeniable that socialism can co-exist with a democratic state.
@Dodd,
You lost me on this one. By this argument, prohibition of dumping in rivers is not fascist (I’d agree). But mandating that all cars are manufactured with headlights would be fascist, since there’s no prohibition of a harmful act.
Or am I missing something?
Painfully false equivalence. Prohibiting a harmful act is absolutely nothing like forcing every breathing citizen to enter into a contract with a private company.
Something I am quite clearly going out of my way not to do, so it’s unclear why you’re diverting to this tangent.
Requiring cars to have certain features (like headlights or wraparound taillights or what-have-you – almost always things manufacturers thought of, not bureaucrats) is technically fascist, yes. It’s gov’t ordering of production (also, it’s usually not even necessary to ensure the feature exists since the manufacturers already have an incentive – sales – to include them). It’s obviously small-bore fascism, but it’s just this sort of creeping, small-scale encroachment that’s comprised the aforementioned decades-long progression.
Really? Try having an opposing view.
Tell us how ‘free’ those elections are, again, Alex. Mind, this is a fresh article, today. Didn’t even have to dig much for it.
You might call them ‘free elections’, Alex… and in a clinical way, you may actually be correct. Yet out here in the real world, it just ain’t true…
Eric @ 15:05 –
What does Chavez have to do with Argentina? The President of Argentina is Cristina Fernandez Kirchner.
At the point where a government mandate on headlights is described as “fascist” the word has lost all practical use.
Marty:
In Eric’s world they’re all Mexicans.
Not a bad piece, but this line is fairly inaccurate:
“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.”
Most small businesses are in the business of supplying large businesses. They are most likely funding their customers, not their competitors. And if they do compete with some firm, they’re funding some of the money to be bought out by that big firm.
Mr. Dodd,
Is it fascism to have meat inspectors dictating to companies how much e coli levels are allowable to protect the public’s right not to get sick?
Marty:
True enough… mia culpa. I’ve been working on an article on Chavez and got the two crossed up.
Still, Kircher draws more from Chavez than you might think.
“Something I am quite clearly going out of my way not to do, so it’s unclear why you’re diverting to this tangent.”
It is exactly what you are doing. Let me quote you.
“John425 hit the nail on the head. HCR is not socialist; it is objectively fascist.”
Objectively? Again, there are multiple definitions of fascism. If you want to extract one sliver of fascist practice and compare it to the individual mandate, you can also prove that this is a practice held in common with essentially every other first world country, as most require that you pay for or contribute towards health care. IOW, they are all fascists. The term become meaningless because only you, and those who agree with you, are not fascists. Fascism is an ideology composed of many parts. You dont get to just pick and choose the parts you want to make an association. This was done selectively in the past to “prove” that Bush was a fascist. That was wrong then. Your claim here is also wrong.
Steve
If you read the post, you might note that Alex gave three REAL examples. But if they aren’t real enough for you, please explain why. All you did was come up with a couple of counter examples.
Hyperbolic emotionalism (and federalism discussions) aside, what part of prohibiting harmful conduct not being anything like forcing people to contract with private companies is so frakking difficult to grasp?!?
Ok, so you plucked two sentences out of their context and based this entire screed solely on them while ignoring everything else I said in an effort to tar me with only using the word for perjorative purposes. Nevertheless, the actual argument you constructed demonstrates that I did no such thing. I was very clear about the meaning I was employing and why it was distinguished from associations to jackbooted National Socialists. The fact that the word nevertheless gets your knickers in a twist does not change the facts.
No, the word was divorced from its actual meaning when it became necessary to remind people that the gov’t telling private companies to make their products a certain way is fascism.
Your devotion to abstract principles in the face of complex realities is endearing. Just curious: Have you ever spent some time defending the property rights of slum lords?
I mean, I’m not a libertarian, so I’m a bit more bendable when it comes to the abstracts, but it seems to me that one can get stuck on the “forcing people to contract with private companies” stuff, or one can take a wider view, informed not only by principles but events.
We’ve been having a debate in this country whether we want our healthcare to be market-based or agency-based. We chose, in no uncertain terms and not to everyone’s liking, a market-based system…with reforms. Crying now that it doesn’t conform to the dictionary definition of “free markets in the wild” seems a bit obtuse.
Consider the alternative. Consider the possibility that the health care market doesn’t function like the widget market. After all, the likelihood of a person needing health care is 100%. Is it too outrageous to think that requiring participation in the health care market isn’t so much a denial of freedom as it is an acceptance of fact?
Dodd,
Your definition seems to be that any government constraint on private action that you don’t like is “fascist”–this is not an especially useful definition.
I still do not see how a mandate to buy health insurance falls under Mussolini’s own definition of fascism. Yes, it is state power. Yes, there are grounds to object to it. Even if I allow the possibility that it is wrong for the state to impose the requirement, I do not see how it fits, in any serviceable way, known definitions (apart, perhaps, form Jonah Goldberg’s) of the term “fascism.”
The examples he uses, are fairly weak ones, wouldn’t you say?
Look, Franklin, like it or not what is under discussion here real people have to suffer with.
Yes, and, apparently, when some real people don’t like what they have to “suffer” with, they decide to label it socialism and/or fascism, whether those terms fit or not….
In all due respect, Steven, I think I’ve made a pretty brightline distinction here: prohibitting harmful conduct is within the legitimate scope of state power under the Constitution, mandating the production of private companies (and forcing citizens to contract with them) isn’t.
Ah, so now Hitler is doing your thinking for you. Actually, that is no great surprise…
I think Dodd is making a logically consistent argument. It isn’t the semantics I’d choose (I’d reserve Fascist for the jackboots), but if you want to use small fascism for small mandates … you can have a discussion using those words.
The thing is, whatever the semantics, you can have a whole constellation of arguments again under the word “harmful.”
Dodd – You’re misinterpreting the way the “mandate” is structured. Congress has added a tax that everyone has to pay. You get a credit for the tax if you have health insurance. This is no more forcing people to have health insurance than the homebuyer’s tax credit forces everyone to buy a house.
Eric – Great Britain has a nationalized health service, nationalized television, and a nationalized oil company. They seem to be pretty democratic to me.
Oh, and the idea that President Kirchner is anything like Chavez is laughable.
Clearly, you’ve not been reading Brit blogs on that topic.Particularly as regards the NHS.
Eric,
You do know what democracy means, right? Has state ownership of these agencies done anything to impact free elections? Limit the power of Parliament? Increase authoritarianism or increase executive power? Answer: no.
The way that GM was bailed out is, arguably, socialist, since the United States government is now the majority stakeholder in GM.
Well, not really. The Government may be a majority shareholder, but it has no voting rights (last I read) and has taken a hands off approach, allowing GM to plot out its own restructuring and presumably allowing the company to go public once again soon. However, that’s really besides the point. I’m more perplexed at how you could call a bailout where the taxpayers see no material benefit what-so-ever despite footing the bill to save the company Socialist. Socialism is, at its most basic level (and you can agree or disagree with whether this assessment is true, but that’s also besides the point), about egalitarianism. Mere nationalization of a bank does not, in and of itself, constitute Socialism, unless you truly believe that a temporary Government takeover of a business (at the business’ behest) of any kind is Socialism, in which case this whole article would seem like a giant waste of time.
There is an inordinate amount of nit picking and definition mongering going on here. Tyranny has an endless number of names and definitions. The Leftists are propagandists, so they will lie to confuse us. The only question is whether Obamacare is constitutional.
The point is that, “At one time Americans had the freedom to control their own lives, and make their own decisions, so long as they harmed no one else in doing so.” All laws and regulations were assumed to prevent that harm. Often enough, they became corrupted to serve special interests.
Obama’s health care takeover violates that freedom to control your own life. Obama assumes that the government must prevent you from harming yourself. Thus, he can make your decisions much better than you can.
There is no constitutional authority, for him, to do this. The Tenth Amendment says “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”
The Democrats in Congress are making this stuff up as they go along and are exceeding their Constitutional authority, The US Constitution does not give the US Congress the power to demand this usurpation. Of course, the courts have had a century of twisting and misrepresenting the expressed powers of the Constitution, so they might get away with it.
Therefore, this issue can only be resolved by a vote. It is the electorate who have the ultimate authority.
Obama lied to the electorate; he never ran on these leftist positions. He needs to have his Leftist Congress voted out of office. He should become a Lame duck until we can vote him out. The country needs to defund Obamacare, because he is unlikely to repeal it.
A century’s worth of Leftist power grabs need to be repealed. But for that to happen, the Republican Party must reform itself. It is no less corrupted by power than the Democrats.
At what point was that and at what point did it cease to be so?
Which campaign did you watch?
“At one time Americans had the freedom to control their own lives, and make their own decisions, so long as they harmed no one else in doing so.
At what point was that and at what point did it cease to be so?”
It happened slowly after Woodrow Wilson’s election in 1912. The Socialists knew that the American people wholly rejected their ideology, so the Left pulled a con game on us.
The Progressives assumed control of the Democrat Party in 1906. They did not want to rock the boat, because they lost members when they were too blatantly leftist. We Americans have always been a center right people, but our government does not reflect our values. The Left created a series of crises, over the years, where the electorate gradually ceded our freedoms, rights and money to the government. Then, the Supreme Court created new rights out of thin air.
The Progressives treated us like the proverbial frog. Drop us into a pot of hot socialist water and we Americans jump out. The Democrats slowly heated up the socialism in the country through bribery, and we never missed the freedoms and control we lost.
But, a point of reckoning eventually comes. We are at one now. It is amply clear to the American T.E.A. Party members. They know which freedoms we have lost.
The projects which Obama has in mind will bankrupt America. They will turn us into serfs.
“Obama lied to the electorate; he never ran on these leftist positions.
Which campaign did you watch?”
As a conservative I saw his socialism, but I could never get my liberal or centrist friends and family to see it. They were caught up in emotion.
As Obama said himself, “People project their beliefs on me.” And the Media bias was outrageous; they would not present the truth about the man. This is why people are shocked and disillusioned at his actions now.
Of Course, the far Leftists at ‘Moveon.org and MediaMatters” knew to keep quiet about Obama’s agenda, so as not to spoil the surprise.
At only one time, in the election, was Obama truthful. This was with Joe the Plumber when he said that he wanted to “Spread the wealth around.” That was a dead give away to us conservatives. Of course, Obama immediately recanted; the Press covered up for him. Then, his leftist friends attempted to destroy Joe the Plumber.
The Republican Party shares part of the blame for accepting such a lackluster candidate in McCain. The electorate was not provided with a clear choice; Obama attempted to run to the right of McCain. Then, combine that lack of clarity with war weariness and the fact that the Republican Party were big spenders too. Conservatives were not being represented well by the Republican Party, so they stayed home in 2008. The election was very close. Only 2.6% of the voters switched.
I think this situation was necessary to rid America of its Progressive inclinations. Only by electing Democrats into power does the electorate learn, again, how dangerous, incompetent, counter productive and wasteful they are. Obama has exceeded Jimmy Carter’s administration for ineptitude and is proceeding toward FDR’s.
He has succeeded in frightening people who normally ignore politics. It’s too soon yet to know what the choices will be in 2010. The action will be at the local level, but the mid term elections are always a referendum on the party in power. I expect the Democrats to lose, big time.
Obama disagrees with you.