Socialism vs Corporatism
Lately many have characterized this administration as socialist, or having strong socialist leanings. I differ with this characterization. This is not to say Mr. Obama believes in free-markets by any means. On the contrary, he has done and said much that demonstrates his fundamental misunderstanding and hostility towards the truly free market. But a closer, honest examination of his policies and actions in office reveals that, much like the previous administration, he is very much a corporatist. This in many ways can be more insidious and worse than being an outright socialist.
Socialism is a system where the government directly owns and manages businesses. Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government. In a corporatist state, government officials often act in collusion with their favored business interests to design polices that give those interests a monopoly position, to the detriment of both competitors and consumers.
A careful examination of the policies pursued by the Obama administration and his allies in Congress shows that their agenda is corporatist. For example, the health care bill that recently passed does not establish a Canadian-style government-run single payer health care system. Instead, it relies on mandates forcing every American to purchase private health insurance or pay a fine. It also includes subsidies for low-income Americans and government-run health care "exchanges". Contrary to the claims of the proponents of the health care bill, large insurance and pharmaceutical companies were enthusiastic supporters of many provisions of this legislation because they knew in the end their bottom lines would be enriched by Obamacare.
Similarly, Obama's "cap-and-trade" legislation provides subsidies and specials privileges to large businesses that engage in "carbon trading." This is why large corporations, such as General Electric support cap-and-trade.
To call the President a corporatist is not to soft-pedal criticism of his administration. It is merely a more accurate description of the President's agenda.
When he is a called a socialist, the President and his defenders can easily deflect that charge by pointing out that the historical meaning of socialism is government ownership of industry; under the President's policies, industry remains in nominally private hands. Using the more accurate term – corporatism – forces the President to defend his policies that increase government control of private industries and expand de facto subsidies to big businesses. This also promotes the understanding that though the current system may not be pure socialism, neither is it free-market since government controls the private sector through taxes, regulations, and subsidies, and has done so for decades.
Using precise terms can prevent future statists from successfully blaming the inevitable failure of their programs on the remnants of the free market that are still allowed to exist. We must not allow the disastrous results of corporatism to be ascribed incorrectly to free market capitalism or used as a justification for more government expansion. Most importantly, we must learn what freedom really is and educate others on how infringements on our economic liberties caused our economic woes in the first place. Government is the problem; it cannot be the solution.
Posted by citizen_beta on 05/20/11 11:29 AM
The civil war was caused because the federal government tried to exceed it's power and was too forceful, any state aught have the right to succeed its a basic principle of self determination and self ownership. Other wise it seems individuals and their states are the property of the federal government.
Crippling federal taxes also lead to the civil war as did the fact the central government didn't offer to compensate slave holder's and resorted strait to force. It's not a nice idea compensating people for such gross injustice but it would have lead to much less human suffering and death, and avoided biggest civil war in history, that's what the British in 1912 with out incident... It would have been cheaper financially to than the civil war.
Goldman Sachs was bailed out buy the federal governments a handsome return for their campaign contributions perhaps? The banking institutions rely on the fed, to keep the cheap money rolling and government regulation to keep the completion down, and lobbying and back room deals, friends in high places to buy influence. Not to forget naive politicians who genuinely believe they are helping but really are being manipulated by these crooks.
The terrible thing about corporatism is its the merger between government and private company's who ultimately want to exploit the power of government for profit. The knee jerk reaction more government power to crush the corporations wont solve the problem as it will only empower the corporations we all wish to stop.
the government changes hand very few years but the establishment of both parties are still working for wall street not the people...
"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators."
P. J. O'Rourke
Posted by Christhi on 12/16/10 11:54 AM
In a way, the US is becoming the kind of "Socialism from the top" tradition (as in the Fabian and the German socialists, you can even put Roosevelt into that), using corporate power through a multitude of State-sanctioned cartels, and intense, limitless regulations, to enforce an order that's not even legitimate or wanted by the people.
But when looking at the true socialism brought in places like in the former Yugoslavian Republic or in Cuba (even though some people will flame me here for taking this example), which were essentially based on open conflict -and even popular revolt- towards fascist dictatorships, that'd be quite preposterous to compare the Obama administration to these.
Posted by George Daly on 12/06/10 01:57 PM
Extremely well written and commented upon. Looks like I am late to the party but since no one else has mentioned it I thought I would add that John Ralston Saul's book Voltaire's Bastards is perhaps the most thorough examination of corporatism available. Looking at the comments here, most would find the book confirms much of their thinking but deals with the subject from a broader perspective; beyond the U.S.A. It's a world issue. Saul's more recent book, The Collapse of Globalism is also illuminating. I really enjoyed everyone's comments and Mr. Paul's article. You are my kind of people.
Posted by Kristalmagic on 12/02/10 10:47 AM
Sounds to me as though you really prefer anarchy. Total freedom, but no accountability.
Reply from The Daily Bell
"Total freedom, but no accountability."
Is that the definition of anarchy? How long have you studied libertarianism and Austrian free-market thought. An hour? A day?
Posted by Janus on 06/24/10 12:18 AM
There: Click to view link
I've updated the caption. OBAMA JOKER POSTER/ CORPORATISM
Posted by Don E on 05/05/10 12:51 PM
Education is a first step. To get change action is required. Who is powerful enough to take action?
Posted by Don E on 05/04/10 03:24 PM
Agreed. The problem becomes: how does one deconstruct the power-elite? Certainly the power-elite will hold jobs and the economy hostage if overt attempts to deconstruct them are enacted. Secondly, how do we filter out foreign investors who put their money in these institutions in good faith.
Reply from The Daily Bell
One does, initially, what one can through education.
Posted by Don E on 05/04/10 12:46 PM
How would reducing government also reduce much of Goldman Sach's businesses? It's my opinion that a lack of regulatory oversight allowed Goldman Sach's to engage in it's ethically/criminally practice of promoting and knowingly recommending bad stocks and then betting against those stocks and profiting. I don't see how reducing government would minimize that behavior.
Reply from The Daily Bell
The Bell's opinion: Because Goldman Sachs, in aggregate, is an almost purely mercantilist entity that takes advantage of nearly a century of intricate power-elite arrangements to build up the power of corporate/banking entities in league with Western governments and especially America.
Everything from the intricate tax system to the production of money itself is designed to create a modern money system that very large an powerful banking operations can exploit almost at will. Nobody does it much better than Goldman, and no outfit would suffer more were a century's worth of power-elite promotions deconstructed.
Posted by Ryan on 05/04/10 09:36 AM
Hidden History: Where Organized Crime and Government Meet by Charles A. Burris
Click to view link
Posted by Don E on 05/03/10 01:07 PM
I'd agree that the Founding Fathers considered the balance between individualism (or what many described at the time "mob rule") and tyranny. Too much government and tyranny are not the same thing. Tyranny is government by A TYRANT, that is a specific form of government.
I do believe the Founding Fathers believed in the Libertarian idea that State Rights should supercede a strong federal government. If you recall the 1st government formed after the revolutionary was a confederation. It was found that too weak a central government was very inefficient. The Constitution came later.
Eventually the next result of a weak central government was the Civil War. I agree there must be a balance between individual rights and the general interests of the country.
Where I have greater concern is not the "gangerism" of the federal government, a government that changes every couple years. I am more concerned about the "gangsterism" of Goldman Sachs.
Goldman Sachs that is basically a big casino that profits no matter how the stock market flows, and is accused of "fixing" bets by advising clients to invest in certain stocks while Goldman Sachs bets against them. Who can fix what Goldman Sachs does? Individuals? Please tell me how.
Reply from The Daily Bell
Reducing government to a minimum would also reduce much of Goldman Sachs' businesses to a minimum in the view of the Bell. If you are implying, as you seem to be, that the trouble with the American government in the past is that it has been "too weak," we would disagree. It seems to us perfectly possible to have tyranny without an individual, all-encompassing tyrant.
Posted by Trevor on 05/02/10 05:53 PM
A careful reading of the Declaration of Independence and the Constitution shows the United States of America was founded on the principles of individual freedom over collectivist special interests and for 150 years those principles created the freest, most productive, most charitable society in the history of mankind.
The American Constitution and the Bill of Rights are a codification of the Declaration of Independence. Our Founders understood the evils of too much individualism (anarchy) and too much government (tyranny). Consequently, our Constitution is a social contract among the people and through their States, that created a decentralized society with a very limited federal government to protect the freedoms of the people and the States so that they in turn would be free to govern themselves without coercion from a centralized government. That system is a Republic founded on the "Rule of Law" embodied in our written Constitution where the lawmakers may govern only at the consent of the governed.
The "isms" that we are discussing here all promote some form of collectivist aberration of our uniquely American "Rule of Law". The term "gangsterism" isn't wholly inappropriate, when describing the special interest elitists who attempt to deceive the people and skirt the Rule of Law under the guise of promoting "individual" equality or social justice, to further their own interests and positions atop some collectivist system of power.
Posted by Don E on 05/01/10 02:17 AM
I don't believe order must be imposed. I believe, and history demonstrates, that when there is anarchy, order becomes imposed spontaneously. And it's not an intellectual, rational process, when order gets imposed, the forces that influence the new order are military, political, and religious in nature.
Getting back to Dr. Paul's point about "corporatism", I'm looking for examples where government is taking over private corporations. Certainly when the government bailed out the car companies, in name the government owed major car companies, but 2 years out we can see that the government just did it to float the companies thru economic crisis. What I see far more is big companies spending money on lobbyists to try and control the rules the government makes. I see that as the greater danger to the American people.
Who do I believe should impose order? My answer is no one. We have a Constitution that defines a process on how we should elect our leaders. In 2008 we had elections that elected President Obama, and an overwhelming number of Democrats to congress. The President and Congress are proposing ideas to solve problems. If these ideas are extremely unpopular, Obama and the Democrats will get kicked out the next election.
Posted by Don E on 04/30/10 03:34 PM
@ The Gimlet Eye
"Gangsterism"?.......really? Come on.
So when you drive down the Texas roads that my tax dollars paid for...do you believe you are stealing from me?
Or the freedom you have to walk the streets in relative safety paid by citizen tax dollars for police, peace of mind we are not going to be invaded because of our military, or the education to got to read and write these very thoughts that you blog....these are the result of "Gangsterism".
I believe in personal freedom as much as the next mainstream American, but not to the extreme of anarchy. When there is no order...there is anarchy. Where there is anarchy someone or something will take charge.
People cannot tolerate anarchy. I don't know what sort of utopian world some seem to believe in where there is no government and every individual is good and responsible. Where does that exist? Has that ever existed? If history has proven anything it's proven that people cannot exists in a community as a group of good and responsible individuals.
Given time someone or something always takes charge. If it's not the government, it'll be a corporation....and the corporation will become the government. That my friends is really what "corporatism" really is. It's not government taking over corporations, it's corporations taking over government. I'm still waiting for an example of a country, in any time of history that lived and thrived under a system resembling Libertarianism.
Reply from The Daily Bell
" When there is no order...there is anarchy."
Obviously you believe order must be imposed and do not believe in Hayekian "spontaneous order" imposed by the market.
But who imposes the order in which you believe? - Obama? Biush? Barney Frank? Maybe the Pentagon or CIA? Who? ...
Posted by James Hermans on 04/29/10 08:23 PM
A great read, but I think it's all a top down discussion. The reason 'isms take hold (when not by murdering their opposition) is when citizens give up responsibility for their own lives and refuse to suffer the consequences of their own stupidity and poor choices. Just look at how most parents refrain from properly disciplining their children, the root of the problem is they no longer understand what true love is and have replaced it with a sloppy, non-offending Hollywood puppy love.
Whenever a people cry out to government to save them from their mistakes, there will always be an ambitious politician championing the most palatable 'ism promising to take care of them through "clever" government programs.
Ron Paul is right when he says... "Most importantly, we must learn what freedom really is and educate others on how infringements on our economic liberties caused our economic woes in the first place. Government is the problem; it cannot be the solution."
We need a bottom up grass roots movement where people repent of their selfish ways, take responsibility for themselves and vote government out of their lives.
Posted by Natalie on 04/29/10 11:33 AM
AMEN!! to The Gimlet Eye comments. That's what I should have said in my post -- if I had had the gift for communicating as you apparently do. Very well said.
Posted by The Gimlet Eye on 04/28/10 07:38 PM
Dr. Paul has a good point. Personally, I think the most important point is to emphasize the CRIMINAL NATURE of the people we are up against--the power elite, and to keep pounding away on that theme. At this point in my life and knowing what I know, I am inclined to call it "Gangsterism."
At any rate, one can use any term one wants; socialism, collectivism, communism, "gangsterism," etc., but never fail to include the criminal nature of it. That's what I try to do in my blogging. All of these political systems we are talking about here are, when all is said and done, GIANT CRIMINAL ENTERPRISES which, as one of you stated, deny individual rights.
The surface differences don't interest me so much, though, as the fact that they are not just "alternatives" to republican government; they are, in fact, renegade packs of wolves, in nature as old as time, with their hearts set on perverting and breaking our laws and establishing dictatorships headed by themselves.
Click to view link
Posted by SOS4USA on 04/28/10 03:44 PM
Posted by Anonymous on 04/28/10 11:32 AM
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
Posted by Maverick Muse on 04/28/10 06:59 AM
Nate on 4/27/2010 1:59:23 AM, "What is the term for corporate ownership of government?" ...
Andras on 4/27/2010 2:38:59 AM; Touche!
Posted by Don E on 04/28/10 12:00 AM
Socialism is a system where the government directly owns and manages businesses. Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government.
I've been reading all the "definitions" that people have contributed to this thread. To say socialism, communism, fascism, nationalism, and corporatism are all the same thing is simply not true. Each "ism" is a different word because it has a different meaning. Some actually describe political philosophy and some economic.
But getting back to what Dr. Paul described above, private corporations that are controlled by government. I wonder if Haliburton would fall into that group? or Blackwater? I mean it's one thing to create laws that promote certain types of corporate behavior, but something else to say that government controls them. I just thought I'd bring this tread back on topic.