Which flavor of socialism did you get?

posted by Brian Gongol - 

Listen to the podcast segment "Which socialism?" from the July 7, 2018 episode

While I'm a little late to the party (they've already aired the series finale"The Americans". It's an impressive period piece deliberately peppered with reminders of just how awful the Soviet Union was -- and how it was truly the Evil Empire that united what we knew then as the "free world" against it.

It was easy to oppose Communism when it was part of a concrete, monolithic thing like the USSR. But it's a curiosity of human life that we're often much slower to get worked up about abstract problems than the concrete ones -- even if the abstract ones pose a big threat.

Consider the (at least) three paths to socialism:

  • Communism classic: The model once embraced by the USSR, and still practiced to some extent in Cuba, and much more so in North Korea
  • Soft socialism: The Nordic model with which we are most familiar, where government spending represents about half of the economy
  • Corporatism: The sneakiest model of all

Communism classic? It's obviously a failure. If it were anything worth salvaging, people wouldn't perpetually seek to escape it. Over and over, it has been a demonstrable catastrophe -- the famines alone prove it.

Soft socialism is a more interesting case, because it's often presented to us as a model of success. And it's true that the Nordic model has been very successful at producing very high standards of living -- but that doesn't necessarily make it one worth emulating. That's because the Nordic model of socialism requires a very specific set of conditions in order to work. Their model requires:

  1. A small, culturally homogenous society (equality poster child Sweden, for instance, is a country of just 10 million people, of whom 63% are Lutheran). Introducing "outsiders" into a system that promises ample benefits only turns the people against one another and invites anti-immigrant sentiment.
  2. Some sort of government-owned or heavily-taxed resource that is both sustainable and highly valuable on the world market (oil in Norway, for instance).
  3. Reliably far-sighted politicians who can channel investment over the long term into building sustainable sources of growth to replace the resource when it eventually runs out (resisting constant pressure to spend more now in return for political favor now)
  4. Domestic entrepreneurs and innovators who are willing to jump over high hurdles to create new economic opportunities for their countrymen, despite the obstacles
  5. Some sort of guaranteed employment program that keeps the country from accumulating lots of unemployed and under-employed young men (who, regrettably, are almost always the cause of terrible violence when left with nothing to do but stew in their own anger)
  6. But also some way of ensuring that something productive actually comes out of the guaranteed employment program (the Works Progress Administration produced some material results for a short term, but there was no way it could have been sustained for decades; America, in a sense, got lucky that World War II put lots of young men to work doing other things, trained them in skills they could use upon their return to the civilian workforce, and sent many of them to school with a real sense of purpose after the war)

That first requirement is a ticklish one, because nobody likes to touch on such a thorny issue, nor to face the fact that irrational biases and even racism can factor into what should be economic decisions. But the problem is on display in Sweden right now, where nationalist politicians are arguing that immigrants have overburdened the welfare state. When an "other" is available to be blamed for the shortcomings and problems of a system, one can be sure that the "other" will get the blame -- whether or not it's fair or true. Politics and economics are invariably intertwined, particularly when people become dissatisfied with the distribution of economic goods -- especially if they think the distribution unfairly favors an "other".

Corporatism isn't new, but it's undergone a particularly visible revival as China has adopted it as a more productive alternative to classic Communism. The label itself can be misleading -- it's not government by corporations, but rather an enthusiastically interventionist political and economic system that uses centralized power and interest-group pandering to set policies and preferences.

To put it bluntly: Corporatism is what happens when government picks the economic winners and losers -- instead of setting, enforcing, and trusting an order based upon rules. And it's not only a form of socialism, it's exactly the form of socialism we are seeing on the rise in America today:

If our government is picking particular industries for protection (like steel and aluminum producers, for example), that's a step towards corporatism.

If our government is favoring or disfavoring particular businesses (like Carrier or Harley-Davidson, for example), that's a step towards corporatism.

If our government is arbitrary and unpredictable about enforcing laws and regulations (like it has been with the Disney/Fox vs. Comcast/Fox merger and the AT&T/Time Warner merger), that's a step towards corporatism.

If the economic landscape is made so complicated by government policy that only the big can really survive (because they're the ones that can afford big legal departments and Congressional lobbyists), that's a step towards corporatism.

The individual initiative of lots and lots of people is what makes the difference between a successful economy and a failed one. We're not a successful country because of mass collective effort under centralized guidance -- we're successful because, in the aggregate, individuals will do more to better themselves and their families than they will if their work is commanded from above. But that means we have to resist each of the socialist temptations: And while it's easy to reject classic Communism and while it should be easy to see that a Nordic soft-socialist model is destined to fail in a huge and pluralistic society, it's not so easy for everyone to see that corporatism is destined for failure, too.

Corporatism is a command structure -- a way of structuring power -- and it depends upon the complicity of those who think they'll gain more than they will lose by turning over their choices to centralized planning and decision-making. But it is a form of socialism, and it invariably steals from the individual and the family, chokes out initiative, and stifles the kind of innovation (along with creative destruction) that rewards those who are willing to create economic progress.

Corporatism is socialism, too.

Brian Gongol

Brian Gongol

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