The Corporate State, the Welfare State, and John Steinbeck

In 1957, John Steinbeck wrote a slim satiric novel called The Short Reign of Pippin IV. It isn't one of his finest works of literature, but there's a passage in it that has stayed with me in the three decades since I read the book, even as I forgot the plot developments that led to it:

I read a bunch of Steinbeck books in my early teens. I have forgotten pretty much everything about Tortilla Flat and The Moon Is Down, but I remembered a few paragraphs from this one."You take a big corporation in America, say like General Motors or Du Pont or US Steel. The thing they're most afraid of is socialism, and at the same time they themselves are socialist states."

The king sat bolt upright. "Please?" he said.

"Well, just look at it, sir. They've got medical care for employees and their families and accident insurance and retirement pensions, paid vacations--even vacation places--and they're beginning to get guaranteed pay over the year. The employees have representation in pretty nearly everything, even the colour they paint their factories. As a matter of fact, the've got socialism that makes the USSR look silly. Our corporations make the US government seem like an absolute monarchy. Why, if the US government tried to do one-tenth of what General Motors does, General Motors would go into armed revolt. It's what you might call a paradox, sir."

Set aside that semi-syndicalist bit about the employees having representation in "pretty nearly everything" -- there may have been some truth to that in Germany at the time, but it's a stretch to say it about America. Think instead about this 1957-vintage vision of America's biggest corporations as private welfare states. This was a real trend, and while part of it was a simple matter of employers in a growing economy offering amenities to attract workers, there was an element of public policy to it too. In particular, there were the tax incentives introduced in the 1940s and '50s that played a major role in making employer-provided benefits the dominant means of receiving health insurance -- and, more important still, in making insurance the dominant means of paying for health care. This was one face of the corporate state after the dust had settled from World War II: a public-private partnership where the government set the parameters and big businesses delivered the goods.

It wasn't an ideological compromise so much as it was a jerry-rigged accident. The limits of the vision -- particularly when it comes to health insurance -- soon became clear.

Decades later, Steinbeck's passage feels less like a description of an emerging social order and more like a glimpse back at the discarded hopes of another time. But where it comes to health insurance, we're still living in a system erected in that era. Obamacare is the latest, clumsiest attempt to put some patches on the leaks.

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  • The Other Kevin||

    I must have missed the part of socialism where you are free to quit your socialist state and join another socialist state down the street. Or start your own.

  • ||

    Does Steinbeck address the difference between willing private actors to implement beneficial policies and the force required of government socialism? Or is he just another ignoramus when it comes to liberty?

  • WTF||

    The latter.

  • Jesse Walker||

    I don't think anyone has ever mistaken John Steinbeck for a libertarian.

  • UnCivilServant||

    Some have accidentally mistaken him for an author though.

  • UnCivilServant||

    And I have mistaken him for someone else.

    Sorry, not the published individual I thought I was insulting.

  • mr simple||

    I think the insult still stands. Why don;t you beat us over the head with your obvious premise some more, Steinbeck? I don't think we got it the first ten times you played out the scenario.

  • UnCivilServant||

    I looked, I haven't actually read anything he wrote, so I can't judge.

  • Ornithorhynchus||

    Only thing I've read is Grapes Of Wrath. That was more Socialism than I could stomach for awhile, so I didn't read any others.

    The non-political parts were okay. Not great, but acceptable enough. I might try reading one of his less preachy books sometime.

  • l0b0t||

    I agree. After being forced to read The Red Pony in high school, I disliked Steinbeck a little bit. Then after being stationed at Ft. Ord, the exposure to all of the Steinbeck fellating in the Monterey Bay/ Salinas Valley area made me absolutely despise him.

  • ||

    Well then there is that whole fabulist memoir of his...

  • ||

    I sure didn't. Just rhetorically questioning the choir.

  • Sevo||

    "Does Steinbeck address the difference between willing private actors to implement beneficial policies and the force required of government socialism?"

    ^This!
    I'm amazed at the ignorance required to conflate the info you give to some company with NSA's sleazy spying.
    Further, I've listened (*not* quietly) to supposedly intelligent people who claim that if you have insurance, you can't gripe about socialism.

  • Jquip||

    To be fair, both normal insurance and Socialism *are* risk pools. It's just that in one a person is guarding himself against knowable, but non-predictable, consequences of life.

    Where in the other the Government is guarding itself against the knowable and preditable uppity peasants.

  • ||

    One is also voluntary and non-coercive...

  • The Late P Brooks||

    The thing they're most afraid of is socialism, and at the same time they themselves are socialist states.

    Oh, okay.

  • prolefeed||

    I've got no problem with socialism per se -- a family is a profoundly socialist organization -- just with a large criminal gang calling itself government and then imposing it upon us.

    Voluntary socialism one can opt out of is fine with me.

  • Swiss Servator craves Rösti||

    ie the Kibbutz movement in Israel, right?

  • prolefeed||

    An ordinary family, a Kibbutz, whatever -- if you can walk away from it whenever you want, fine with me.

  • sarcasmic||

    Something that collectivists have a difficult time comprehending is that individualists don't oppose collective action. We oppose coercion.

  • Fist of Etiquette||

    ...a public-private partnership where the government set the parameters and big businesses delivered the goods.

    Bringing on the rapes of graft.

  • Sevo||

    "Bringing on the rapes of graft."
    Consider that stolen.

  • Sudden||

    I will merely graft it. I'll call Warty in to handle the remainder

  • Death Rock and Skull||

    Voluntary "socialism" is capitalism. Forced socialism is socialism, and wrong.

  • Gilbert Martin||

    The paternalistic corporation was only enabled to exist for a time in the post WW2 era because the industrial base of most of the rest of the world had been blown to pieces and American corporations had no effective competiton.

    It wasn't that way before the war and it started eroding after the competition was rebuilt. It's centainly not going to be revived going forward.

  • sarcasmic||

    If the rest of the world is kicking our asses economically because they've got new factories, shouldn't destroying all of our old factories enable us to overtake them?

  • mad_hominist||

    Well, that's what Krugman would think.

  • LynchPin1477||

    +1 Kreasoning (Krugman reasoning)

  • Swiss Servator craves Rösti||

    Kräusening?

  • Sudden||

    I prefer not to think about Kruggy getting head...

  • LynchPin1477||

    The next time some progressive accuses the Republicans and Fox News of sabotaging Obamacare, just tell them to think of all the jobs that are being created fixing the website's problems, and then ask them why they are pro-unemployment.

  • creech||

    Seems to me that's happening. Just try to find the Budd Company's modern WWII plant at Red Lion.

  • Death Rock and Skull||

    Budd was an awesome company... and now a dated one.

  • Gilbert Martin||

    No, we should start another war and destroy all of their new factories.

    I have it on "good" authority from the Keynsians that WW2 pulled us out of the Great Depression and like totally valides their economic theories.

  • Jquip||

    It's not wrong. All that's needed to fix up a depressing labor-participation rate is to reduce the labor pool.

    If you're not smart you do it yourself, like the famous failures of Socialism (Hitler, Stalin, Mao). If you're smart you let someone else kill them off for you in a great moral crusade. (FDR, Pretty much everything France has done for centuries.)

  • The Late P Brooks||

    The Berlin Wall wasn't there to keep people OUT.

  • Mercutio||

    Actually, it was. It was built to keep the East Germans OUT of West Berlin.

  • Ken Shultz||

    "Decades later, Steinbeck's passage feels less like a description of an emerging social order and more like a glimpse back at the discarded hopes of another time. But where it comes to health insurance, we're still living in a system erected in that era."

    Big companies still market themselves as being socially minded, and I guess that legacy is coming from the same place.

    The NFL is probably the craziest about that. What kind of douche bag hates on the owners for making the taxpayers build them new stadiums--when the NFL encourages the players to wear pink for breast cancer awareness?

  • Ted S.||

    To be fair, if the NFL didn't do this, the ribbon bullies, or at least their sycophants in the media would have a screaming fit. Look what happened when Aaron Rodgers failed to spot a woman in a pink hat when he was walking through an airport.

  • Aresen||

    Threadjack:

    Venezuela has started arresting the Kulaks:

    http://ca.news.yahoo.com/venez.....ector.html

    CARACAS, Nov 14 (Reuters) - Venezuela's socialist government has arrested more than 100 "bourgeois" businessmen in a crackdown on alleged price-gouging at hundreds of shops and companies since the weekend, President Nicolas Maduro said on Thursday.

    "They are barbaric, these capitalist parasites!" Maduro thundered in the latest of his lengthy daily speeches. "We have more than 100 of the bourgeoisie behind bars at the moment."
  • The Last American Hero||

    I guess Any Rand was right, gov't policy always is conducted at the point of a gun. When I first read Atlas Shrugged, it seemed to hit upon a lot of essential truths, except for the weird rapey stuff. The popularity of 50 Shades of Grey has caused me to re-evaluate my position on the latter.

  • Swiss Servator craves Rösti||

    "except for the weird rapey stuff"

    Warty? STEVE SMITH?

  • Ken Shultz||

    Just like with ObamaCare, so many people don't believe this stuff is gonna happen until it actually happens.

    http://www.youtube.com/watch?v=E7QgCWJfYZU

    I'm kind of worried about what's going to happen here when the progressives realize what's really happening.

    Can they live with a world in which they've been so completely marginalized by reality?

    I'm not sure.

  • Faceless Commenter||

    "We have more than 100 of the bourgeoisie behind bars at the moment."
    --------------------
    Pour encourager les autres.

  • Death Rock and Skull||

    We have to get them out of there!

  • Faceless Commenter||

    Well, back to the government-fiddling-induced distortion of the labor market.

    I see a field of dots between where we are now and an end of routine employer-provided health insurance. Now if only we can connect the right ones.

  • RussianPrimeMinister||

    I've always managed to get my socialist-minded friends to agree that people who don't agree with socialism should be able to opt out and live their own life. I can't, however, seem to get them to go past that point when it comes to understanding freedom.

    And it always ends up boiling down to them saying "Yes, they should be able to opt out. But why would they?"

    *slams head on desk*

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