The evil of socialism approaches!

Summary:  Economic crisis … a leftist radical President … Can socialism be avoided, or is it our destined fate?  Perhaps these things are more complex than we usually imagine?  Here are some different perspectives on the danger.

1.  One of our elected leaders shows the way

Representative Barney Frank, on CNBC’s “Closing Bell”, 20 October 2008:

Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of this money.   (source)

2.  Matthew Yglesias

Not that anything about the current “socialism” rhetoric is meant to be taken seriously, but isn’t the closest thing to socialism on the American policy agenda the status quo situation in Sarah Palin’s Alaska? You have collective ownership of valuable natural resources that generates lots of revenue for the state, and then the government makes “spreading the wealth around” through the Permanent Fund, etc. its main priority.

It’s actually, for all the flaws of Alaska politics and public policy, a pretty good system. But I think the best way to think about it is that it’s an example of a somewhat special case in which socialism is a good idea.

Of course another time where you need a dose of socialism is if, for example, there’s a financial system emergency and the government needs to partially nationalize large banks in order to recapitalize them. But that’s been brought to us by George W. Bush with the support of John McCain.

   — From “Socialism“, 21 October 2008

Does anyone know why Alaska gets these oil revenues, and not the United States government?  See the payments from the Alaska Permament Fund.

3.  Another viewpoint on our socialist bailout of banks

Havoc – 41 Theses“, Truth and Beauty, Eric Kraus, 13 October 2008 — Excerpt, A Conversation with Joanna

“Socialism” – she almost screeched, “Socialism” – they are calling this “Socialism” . The miserable f….s!” ”I am a Socialist” she groaned, “and this has nothing whatsoever to do with Socialism. It is simply another bailout for the rich at the expense of the rest of us! It is the capitalists protecting their own kind!”

In one of the most embarrassing misuses of language we have ever witnessed, the press is full of allegations of “socialism”.

We would like to take this opportunity to remind the reader that “socialism” was not conceived of as a term of abuse for unwanted government intervention in the economy. Taxation, regulation, some government intervention, etc. are all aspects of Capitalism – at least of every real Capitalist economy available for study (like for Marxism, where there is limited utility in analyzing the Platonic ideal Marxist economy which never actually existed, we see limited upside in discoursing about an ideal free-markets Capitalist model – instead, one must seek to analyze the successes and failures of the real, historical examples). There is no need to get the socialists involved here.

What the various schools of Socialism have in common is essentially that they are at least nominally meant to protect the working classes from the depredations and abuses of the rich. What we are currently witnessing in the Western world, the US in particular, is NOT Socialism. It is a particularly unfair and unbalanced form of Capitalism, whereby the errors and excesses of the wealthy are paid for to an unusually large extent by the common man.

4.  Macaulay on laissez-faire government

The English historian and Whig politician Thomas Babington Macaulay described the theory of laissez-faire government (1830):

Our rulers will best promote the improvement of the people by strictly confining themselves to their own legitimate duties — by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, idleness and folly their natural punishment—by maintaining peace, by defending property, and by observing strict economy in every department of state.

5.  The Myth of Rugged American Individualism

“The Myth of Rugged American Individualism”, Charles A. Beard, Harper’s Monthly, December 1931 — Can be downloaded after free registration from Scribd

This is a devastating rebuttal to Macaulay.  He describes the strong hand of the Federal government in the development of America, mostly at the instigation of business interests.  Regulation of railroads

  1. Construction of waterways
  2. the US Barge Corporation
  3. Shipping
  4. Aviation
  5. Canals
  6. Highway Building
  7. the Department of Commerce
  8. the big pork barrel
  9. the Bureau of Standards
  10. the Federal Trade Commission
  11. the Anti-trust Acts
  12. tariffs
  13. the Federal Farm Board
  14. the Moritorium and Frozen Assets

Please do not attempt a rebuttal to this essay without first reading it, no matter how great your mastery of the Force.

Update: 6. “Doing Socialism vs. thinking about it“, Marc Ambidner, blogging at The Atlantic, 22 October 2009
This socialism thing.

  1. It would have been more convincing had McCain opposed the original bailout and not proposed austerity for everyone and then ruled out lots of programs and then proposed lots of new spending.
  2. Palin is going on about Obama and wealth redistribution.

Palin taxed oil company profits and cut $1200 checks for every Alaskans.  That’s spreading the wealth. Redistributing some money.

The McCain campaign talks about Palin’s executive experience.  So Obama might have socialistic inclinations. Palin’s gotten it done.

Afterword

If you are new to this site, please glance at the archives below.  You may find answers to your questions in these.

Please share your comments by posting below.  Please make them brief (250 words max), civil, and relevant to this post.  Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).

For more information from the FM site

To read other articles about these things, see the FM reference page on the right side menu bar.  Of esp interest these days:

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13 thoughts on “The evil of socialism approaches!

  1. >Does anyone know why Alaska gets these oil revenues, and not the United States government?

    Some faded tatter of the 10th Amendment not yet crushed in the general demolition of the three level/three branch form of government posited in the Constitution? Hail Caesar!
    .
    .
    Fabius Maximus replies: But the oil is on Federal land, not State-owned land.

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  2. Beard’s “An Economic Interpretation of the Constitution of the United States” is one of Poli Sci’s greatest hits, and it’s worth reading in this context as well; it argues that the motivation of the Founding Fathers in setting up our form of government grew more from their desire to protect their personal property than from any conception of furthering the public good.

    It will be admitted without controversy that the Constitution was the creation of a certain number of men, and it was opposed by a certain number of men. Now, if it were possible to have an economic biography of all those connected with its framing and adoption, – perhaps about 160,000 men altogether, – the materials for scientific analysis and classification would be available. Such an economic biography would include a list of the real and personal property owned by all of these men and their families: lands and houses, with incumbrances, money at interest, slaves, capital invested in shipping and manufacturing, and in state and continental securities.

    Suppose it could be shown from the classification of the men who supported and opposed the Constitution that there was no line of property division at all; that is, that men owning substantially the same amounts of the same kinds of property were equally divided on the matter of adoption or rejection – it would then become apparent that the Constitution had no ascertainable relation to economic groups or classes, but was the product of some abstract causes remote from the chief business of life – gaining a livelihood.

    Suppose, on the other hand, that substantially all of the merchants, money lenders, security holders, manufacturers, shippers, capitalists, and financiers and their professional associates are to be found on one side in support of the Constitution and that substantially all or the major portion of the opposition came from the non-slave-holding farmers and the debtors – would it not be pretty conclusively demonstrated that our fundamental law was not the product of an abstraction known as the “whole people,” but of a group of economic interests which must have expected beneficial results from its adoption? Obviously all the facts here desired cannot be discovered, but the data presented in the following chapters bear out the latter hypothesis, and thus a reasonable presumption in favour of the theory is created.

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  3. If you want an interesting experience, goto some legal blog or mailing list, particularly one dealing with constitutional law. You will rapidly encounter some sort of discussion of the “intent of the framers.”

    Try to introduce Beard’s Economic Interpretation of the Constitution into this discussion. Not only will none of those fine legal minds have heard of Beard, but they will quickly rule you out of order.

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  4. I had trouble registering on Scribd, and had a hard time reading the small print PFD article. Lights came on when I first read Beard. The American History I read at Yale simply crumbled under his straightforward exposition. Later writers like Howard Zinn, Michael Parenti, Gabriel Kolko, and recently, Kevin Phillips, enlarged the picture. For a quick and dirty view of the influence of big business on the US government (or the role of governent in furthering business interests) you have merely to note the predominance of Wall Street and the top corporate law firms in the backgrounds of the major cabinet secreataries over the decades (particularly Treasury, Defense and State).

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  5. As you point out, all modern first-world societies use a mix of collective ownership and management of public resources & private ownership and management. The mix differs from one country to another.

    Compulsory K-12 public education, the national highway system, public waterways like the canals on the East Coast and the aqueducts on the West Coast, hydroelectric dams like Grand Coulee and Boulder, rural electrification projects like TVA, free public libraries and state-funded universities all represent forms of collective ownership and management. Sometimes you get a blend of both — i.e., toll highways on the East Coast.

    A close examination shows that those who decry “Socialism” typically object to the particular mix of collective and private ownership. The only completely privatized laissez-faire society in the world would be a failed state like Soamlia. AFAICT no political candidate on the national scene proposes eliminating our highway and university and waterworks systems nationwide and replacing ’em with local warlords backed by AK47-toting teenagers in pickup trucks.

    Japan’s keiretsus and Korea’s chaebols mirror the incestuous DARPA-Pentagon-Sandia labs R&D procurement interconnections. It’s just a difference of emphasis: Pentagon R&D feeds tech innovation as a side effect of blowing stuff up, while Korean chaebols feed tech innovation as a side effect of capturing market share in export sales to the G8. Japan’s laid-off-but-still-working “window workers” have their counterpart in America’s fired-but-still-making-millions CEOs who get golden parachutes.

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  6. “With investment racketeering at the one end, and labor racketeering at the other.” From “The Myth…”. Well that only sums up half our current predicament. Capital has become useless to the capitalists, but labor, racing to the bottom, has not yet driven workers into the arms of corrupt unionists. Give it time. That is coming next.

    Now here come a man with a paper an’ a pen.
    Tellin us our hard times are about to end.
    And if they don’t give us what we like.
    He said, “Men that’s when you gotta go on strike”.

    “The Band”

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  7. “A close examination shows that those who decry “Socialism” typically object to the particular mix of collective and private ownership.”

    That’s a really good point. McCain believes we should have some kind of regulation of Wall Street. Obama would be considered a right-winger by the standards of Europe.

    I wish we could get past the red-baiting and absolutism and figure out some real solutions.

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  8. Update: Doing Socialism vs. thinking about it“, Marc Ambidner, blogging at The Atlantic, 22 October 2009

    This socialism thing.

    A. It would have been more convincing had McCain opposed the original bailout and not proposed austerity for everyone and then ruled out lots of programs and then proposed lots of new spending.

    B. Palin is going on about Obama and wealth redistribution.

    Palin taxed oil company profits and cut $1200 checks for every Alaskans. That’s spreading the wealth. Redistributing some money.

    The McCain campaign talks about Palin’s executive experience. So Obama might have socialistic inclinations. Palin’s gotten it done.

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  9. Update: RNC shells out $150K for Palin fashion“, The Politico, 22 October 2008

    Comment about this on Matthew Yglesias blog by “pseudonymous in nc”:

    This was RNC funds, which aren’t capped, which is why the RNC and the McCain campaign are running joint ads. Still, it’s not exactly great publicity for the only people who are able to raise donations for the presidential campaign:

    “Your donation of $50 will stem the creeping tide of socialism by paying for one of the buttons on Sarah Palin’s jacket.”

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  10. Regarding “Palin taxed oil company profits and cut $1200 checks for every Alaskans. That’s spreading the wealth. Redistributing some money.”

    1) Alaskans own the oil that is generating the tax
    And more importantly,
    2) The money was given to every Alaskan, regardless of the economic status. There was no rewarding one group more than another.

    The Socialism used as an insult is the Robin Hood kind: taking from the rich and giving to the poor. That’s exactly what Obama’s tax “cuts” (refunds, even if you pay no taxes) are designed to do, which he openly admits.

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  11. Not socialism, which as you point out is at least nominally intended to benefit the poor at the expense of the rich (in practice, however . . . ) The correct term is fascism, which makes no attempt to disguise the alliance between government and politically selected businesses. Obama and Palin are socialists, McCain is a facist. These are not insults, merely descriptions of their demonstrated political beliefs.

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  12. I’m pragmatic. Theoretically a Libertarian. But what works, well works. And what works today does not work tomorrow. Borrow good ideas from everywhere. Socialised health care works. Socialised car manufacturing doesn’t.

    The important thing is to maintain a free society (which is why I’m so worried about the growth of the ‘national security’ State). Free societies will adapt to circumstances more effectively and be able to ride the shockwaves. If it is more effective for now to have nationalised energy, so be it. If it is better to privitise it now, then again so be it.

    Flexibility is a critical asset rather than some dead idiological positions. But stability is also a key, steady improvement is a better aim than some mad dash to a fancied nirvana, basically risk reduction. Stability delivers the bedrock for growth, but without free creativity no growth is possible at all. A free society (and that implies pretty reasonable equality, otherwise freedom is severally curtailed for a large percentage of the population) will, on average, more effectively navigate the flexibility/stability balance and handle unforeseen shocks far better as well.

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