Saturday, November 15, 2008

How Socialism Comes to America

Robert Tracinski writes of Obama's planned $50 billion bailout of the "Big Three" Detroit auto manufacturers:

It is actually a plan for de facto nationalization which will turn the Big Three into permanent wards of the state whose purpose is not to make a profit but to serve the "social goals" set by government.

Obama is backing a plan to pump $50 billion into the big American automakers, while also establishing "a czar or board to oversee the companies"—call it Gosplan—which will supervise "a restructuring of the auto industry." That's exactly what Detroit needs to recover: the benefit of government central planning.

In essence, this is a plan for nationalization of the American auto industry under a new government-appointed board of directors who will supposedly tell the Big Three how to make a profit again.

Blinkered pragmatists will sputter, "But the government is not seizing the property, so it's not socialism!" No, that would be socialism on the communist plan. This is socialism on the fascist plan, in which the property remains nominally in private ownership, but the government dictates what the owner will do with his property. In America the dictation is called "regulation." In this case the dictator will be an "auto czar."

As Tracinski goes on to demonstrate, this is being done to protect a powerful pressure group, the unions. If the Big Three went bankrupt and were bought up by other auto makers, the power of the United Auto Workers would suffer.

American fascism makes corporations bureaucratic managers of the welfare state. Instead of just paying workers, corporations also provide health care and retirement pensions. These functions, along with a sea of regulations, give corporations two missions: make a profit and serve as a mini-welfare state. By passing welfare state functions to the corporations, the government expands the welfare state, but evades any censure for the expansion or any blame for the corporations' failures.

The Democrats are driving this intervention in auto manufacturing, but is there any doubt they were emboldened by the Republicans' bailout of Wall Street? (The Republican led bailout started at $700 million, then was revised to $1 trillion. Now the cost is estimated at $1.8 trillion. The plan has been around less than two months.)

Michael Barone writes,

The Detroit Three are taking advantage of the passage of the $700 billion financial bailout to argue that they, too, need government money to go on.

The conservative David Brooks thinks the bailout is a bad idea, but gets the cause wrong:

It is all a reminder that the biggest threat to a healthy economy is not the socialists of campaign lore. It’s C.E.O.’s. It’s politically powerful crony capitalists who use their influence to create a stagnant corporate welfare state.

But if America had a laissez-faire capitalist economy, then C.E.O.'s would have no influence and no recourse but to pursue a profit in the free market. By Brooks' thinking, if we just had virtuous people in the private sector, then statists such as Obama would never dream of increasing state intervention in the economy.

America's descent into fascism proceeds by the script written by Ludwig von Mises. Government intervention (regulations and government backed union power) have created a crisis in automobile manufacturing. This crisis does not inspire the government to withdraw its intervention, but to increase it with a $50 billion subsidy and the creation of an auto czar who will dictate even further to the industry. In the end we will have the same result as communism, but with private ownership serving to hide the extent of state control.

We are at a turning point in America. The state is about to make an enormous power grab. In addition to the de facto nationalizing of Wall Street and the auto industry, House Education and Labor Committee Chairman George Miller (D-CA) and Rep. Jim McDermott (D-WA), Chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support are plotting to nationalize 401k pension funds. This plan would give the government trillions of dollars in pension funds to spend now; the money would be replaced by government IOU's like the nonexistent social security trust fund. With Obama in the White House and increased Democrat majorities in the Senate and House, can this looting be stopped?


Brian N. said...

Komrade, you will purchase glorious American Soviet Peoples' Trabant!

Wait, that's not right...

The trains will run on time, no matter how many conductors we have to shoot!

Wrong again...

Dismuke said...

I think one of the HUGE problems we face is the fact that the word "fascism" has been thrown around so much over the past 6 decades and has been used pretty much as a pejorative against anybody in a position of authority that people disagree with that its actual meaning has largely been forgotten. And that's just the honest people. The Left calls people who are pro-capitalism "fascists."

Thus it is very difficult to explain to people exactly what we are heading towards. To call people like Obama or Bush or Paulson a "fascist" makes reasonable but uninformed people think one is equating them with Hitler and the Nazis and thus makes them less inclined to take you seriously.

There are two solutions to the problem: either we have to educate large numbers of people about the actual meaning of fascism or we have to find some other term that more clearly describes what we are referring to.

I support the second approach. We already have a task on our hands educating people about what CAPITALISM is and is not. Embarking on a widespread campaign to clarify and defend the actual meaning of an ideology one profoundly DISAGREES with is not only a less-than-fun proposition, it runs the risk of signaling mixed messages about what one DOES agree with and certainly takes time away from making the positive case FOR capitialism one wishes to present.

Perhaps one possibility might be "corporate socialism" which I think pretty much cuts to the essential meaning.

Jim May said...

but with private ownership serving to hide the extent of state control.

Yup. See the health care industry -- effectively government-run already, but behind the protective shield of the nominally private health insurance companies.

Jim May said...

I think one of the HUGE problems we face is the fact that the word "fascism" has been thrown around so much over the past 6 decades and has been used pretty much as a pejorative against anybody in a position of authority that people disagree with that its actual meaning has largely been forgotten. And that's just the honest people. The Left calls people who are pro-capitalism "fascists."

Of course, that's the point: The Left seeks to inflate the meaning of the term into nothingness, so as to obliterate the concept. Once that's done, it will be harder to publicly identify that the Left is objectively fascist.

The same process is happening with the term "racism", and for the same reason. The Left cannot keep up the lie of being anti-racist forever; it must someday allow that particular prodigal son to return home. But it cannot do so until the term "racist" has been likewise rendered meaningless.

Anonymous said...

No body can deny that Hitler's Nazism was a branch of socialism. Nazi is just a shortening of Nationalsozialist. I am sure that the left, very conscious of this, have made their best to avoid this name substituting it for Fascist (which etymology is less descriptive), hence projecting all the attributes of Nazism on Fascism.

Fascism is the creation of the Italian socialist Benito Mussolini. And though a collectivist totalitarian he permitted some degree of private property, so I guess that some capitalists supported it as a way to fight communism.

By the way, is it true that Mussolini has a dedicated street in Chicago?

I’d recommend not using the word fascism except to address the Italian regime of Mussolini (talking about islamofascism doesn’t help…) and using the words Nazi and Nationalsocialism when necessary.

(And forgive my mistakes in English; I had to learn it under the educational system of a leftist government).

Jim May said...

I'd suggest capitalizing the term "Fascist", then, as that is seen as being a proper name denoting Mussolini's system, which is a closer match to where we are headed.

I would counsel only against the use (sans definition) of "small-f" fascism, which is a devalued term as noted above.

Elisheva Hannah Levin said...

We are indeed at a turning point--and one of the last of them, too. Soon, we will have missed the last turns off this road to hell, and will be stuck instead with turning around.

It is frustrating indeed that words that mean something in a discipline have taken on less strict meanings in everyday speech. Nonetheless, fascism is what we are talking about--not communism and not capitalism.

I was once taken to task on an Objectivist blog comment for using the term "state capitalism" and I understand that those who objected were right. It is difficult to discuss ideas if meaning is not clear.