Economics

"Socialism" is Not the Problem

Obama's big government liberalism is bad enough

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Something about Barack Obama has a way of driving some conservatives completely batty. John McCain detected something "a lot like socialism" in his tax plan. Veteran conservative media critic L. Brent Bozell has no doubt the new president will "deliver socialism." But the prize goes to Rep. Paul Broun, R-Ga., who says "we've elected a Marxist" who may create an American Gestapo.

In the radioactive atmosphere of modern partisan politics, no one puts much value on verbal precision. So it's safe to say that over the next four years, the 44th president will come to think his name is Socialist Obama, as critics on the right abandon analysis in favor of invective.

That is a mistake—as McCain's losing campaign confirms. Accusing Obama of socialism is unwise for three reasons: 1) It's not true, and 2) it makes the accuser sound like an idiot, and 3) it distracts from Obama's true inclinations, which are worrisome enough.

These days, no one believes in socialism—defined by the late, left-wing economist Robert Heilbroner as "a centrally planned economy in which the government controls all means of production." A socialist wouldn't favor government aid to the automakers or the banks. He'd propose that the government take them over and run them for the benefit of society. But you haven't heard Obama or anyone else suggest that.

The president-elect is not unaware of the superiority of capitalism. His book The Audacity of Hope contains a testimonial that could have been plagiarized from Ayn Rand: "Our Constitution places the ownership of private property at the very heart of our system of liberty…. The result of this business culture has been a prosperity that's unmatched in human history…. Our greatest asset has been our system of social organization, a system that for generations has encouraged constant innovation, individual initiative and the efficient allocation of resources."

Of course Obama believes the government should do more to help the poor and vulnerable. If redistributing wealth makes you a socialist, though, you have to apply that label to the legendary libertarian economist Milton Friedman, who proposed a "negative income tax" to assure everyone basic sustenance.

But just because Obama is not nearly as bad as his detractors claim doesn't mean we have no worries. His biggest shortcoming is a common one in his party: the assumption that every problem can be solved by government intervention, and that if a little intervention is good, more is better.

His plan on climate change shows the problem. He has a sensible idea—putting caps on greenhouse gas emissions and letting companies buy and sell the right to pollute. That would discourage harmful activity while leaving market forces to find the most efficient means to that end.

Alas, Obama isn't content to leave it there. He unpacks an array of bright ideas to reduce carbon emissions—demanding higher fuel economy from automakers, showering money on clean coal technology, giving consumers tax credits for plug-in hybrids, and on and on.

This belt-and-suspenders approach reflects a familiar liberal vice: the insatiable urge to meddle. It's like the team owner offering the coach a generous new contract if he wins the championship—and then dictating the starting lineup and the play selection for the entire season. It presumes that the government knows in advance the right mix of changes to achieve cleaner energy use at the lowest cost, which neither it nor Stephen Hawking nor anyone else does.

Obama also seems to regard the nation's productive sector as a laboratory for well-intentioned policymakers. In his "60 Minutes" interview, he praised Franklin Roosevelt for his "willingness to try things. And experiment in order to get people working again." What he overlooks is that experimentation creates uncertainty, and uncertainty discourages businesses from doing what they are supposed to do.

During the 1930s, as economist Robert Higgs showed in a 1997 essay, the effect of all the experimentation was the opposite of what Obama assumes. The endless fear of what FDR might do caused net business investment to fall, year after year, prolonging the very catastrophe he was trying to end.

Obama exhibits blithe confidence in the government's power to take economic problems and make them better. He will fare better if he keeps in mind its unbounded capacity to make things worse. For that you don't need socialism.

COPYRIGHT 2008 CREATORS SYNDICATE, INC.

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  1. “the assumption that every problem can be solved by government intervention, and that if a little intervention is good, more is better”

    pretty much the common assumption on both sides…

  2. Wow, I actually agree with Steve Chapman.

  3. While not a textbook socialist, Obama is definitely a communitarian.Authoritarian centrist collectivism is the fiercest enemy of individualism.”They” understand this at least as well as “we” do.The right leaning American citizen is more likely to wake up and oppose the liberty restricting institutions of the State rather than bemoaning “if only the right people were in charge”.I don’t care if they want to call it socialism as long as they are against it.

  4. The right leaning American citizen is more likely to wake up and oppose the liberty restricting institutions of the State rather than bemoaning “if only the right people were in charge”.

    Thanks for starting my work week out with a laugh.

  5. Hey, this is Reason, right? I thought socialism was ALWAYS the problem…

  6. I have to agree with Chapman.It’s not socialism it’s theft and it’s been going on a long time.Take money form one and give to another under threat[the tax code].People like Bryd and Stevens tried to ship the federal budget back to their states.In the past 8 yeears we’ve had massive education,medicare,farm and highway bills.I long for the days of Clinton and the Republican congress of the 90’s.

  7. Tbone,

    Your typical left-leaning American decries the the exercise of power by “the Republicans” or ” the Bush administration”, never the State itself or it’s institutions.
    When the Democrats are in power(and even sometimes when they aren’t) the right goes off on the IRS, the BATF, EPA etc. as well as the elected Democrats.

  8. If not government control of private enterprise then what is socialism. Educate me.

  9. Own the means or control the means…..not a big enough difference to me. If you buy a new car and I come a long and put a gun to your head informing you that I get to drive your car three our of seven days then who really owns it?

  10. “These days, no one believes in socialism-defined by the late, left-wing economist Robert Heilbroner as ‘a centrally planned economy in which the government controls all means of production.'”

    And yet there are still plenty of people in Europe who call themselves ‘socialists’. The largest opposition party here in France is the Socialist Party.

    In Sweden, the Social Democrats buried the idea of a planned economy in the 40s but didn’t ditch the ‘socialist’ label until the Berlin wall fell. What did they believe during the intervening half century?

    They believed in income redistribution as a human right and as an engine of economic growth. Nonsocialists like income redistribution, too, but not as a fundamental right nor as a silver bullet for economic expansion.

    If Obama thinks that income redistribution is a right that should have been in the constitution and that ‘spreading the wealth around’ explains the economic growth of the 90s, then it is not crazy to call him a socialist.

  11. If Obama were really a socialist, there would at least be some people, like lazy shiftless CEOs, who would get theirs. Sadly, he is not even a socialist. He is a Peronist or a Putinist. His program will be mutli-billion dollar welfare and bailouts for connected big wigs and bead and circuses for the under-class all paid for by the upper middle class and small business owners with a dash of personality cult thrown in for good measure.

  12. Simon,

    He doesn’t really believe in income redistribution. If he did, he wouldn’t be throwing billions at Wall Street and Detroit and talking about cutting corporate income taxes. The super rich will do just fine under Obama. It will be those people who are not rich enough to invest in the right tax breaks but still wealthy enough to be taxed that are going to be screwed.

  13. A socialist is whatever the inventor of socialism, Karl Marx, says it is. He wrote the Communist Manifesto specifically to define the characteristics of a socialist country, and never said that such a government must control all means of production.

  14. These days, no one believes in socialism-defined by the late, left-wing economist Robert Heilbroner as ‘a centrally planned economy in which the government controls all means of production.

    Dunno about “all” the means of production, but the bailout is now being used not to buy assets, but to buy ownership. That sounds to me like ownership of the means of production.

    And you can’t tell me that the green agenda isn’t to establish considerably more central planning of the economy and control of the means of production. I don’t care how you dress it up – regulations, tax “incentives”, etc. – it’s still control.

  15. “These days, no one believes in socialism…”

    I’m guessing Steve hasn’t seen the inside of a university building in a while.

  16. John,
    Throwing billions of our money at Wall St. is redistribution. It is simply not from rich to poor. Still, it is redistribution. Doesn’t government’s ability to do so imply it’s control and that control defines Socialism? Is it intent that defines it?

  17. At what point does Socialism become Communism? Is it the loss of personal property or is it just the means of controlling personal property?

  18. “Throwing billions of our money at Wall St. is redistribution. It is simply not from rich to poor. Still, it is redistribution. Doesn’t government’s ability to do so imply it’s control and that control defines Socialism? Is it intent that defines it?”

    Obstensively, socialism claims to spread the wealth around to those who don’t own the means of production. Spreading it around to anyone and everyone connected enough to get a hand out is just chrony capitalism. Obama is not a socialist. He is a combination of Tony Blair and Vladimire Putin. Imagine Blair’s style and charm with Putin’s economic policies minus of course Putin’s petty thuggary.

  19. Isn’t the textbook definition of socialism, at least from Heilbroner, synonomous with communism?

  20. And talking about Karl Marx’s belief that the state would “wither away” doesn’t work. Show a real-world example of Marxist state actually “withering away”.

  21. John,
    You believe that it is still Capitalism when government has that degree of control to redistribute wealth?
    Then what is Capitalism?

  22. “John,
    You believe that it is still Capitalism when government has that degree of control to redistribute wealth?
    Then what is Capitalism?”

    I don’t think it is capitalism. I just don’t think it is socialism. Were the old chrony states like Peron’s Argintina socialist? Not really. I don’t think you can describe a system where by a few connected super rich oligarghs run things as socialist regardless of the amount of control the government has. There is an element of redistributing the wealth the the less off to socialism. I don’t it is capitalism or socialism in a strict sense. I think Peronism or Putinism are a fair way to describe it.

  23. Call it stateism. Then subdivide it into the various catagories that nearly every government in the world falls into – socialist, crony capitalist, nationalist, progressive, etc.

  24. I second domo’s proposal.

  25. Me, too.

    It makes me wonder – does Gucci make jackboots? If not, they’re probably missing a real opportunity.

  26. Who wants to buy froo-frooey Gucci jackboots?

  27. Who wants to buy froo-frooey Gucci jackboots?

    I think Max Mosley can answer that question.

  28. Who’s Max Mosley?

  29. John,

    It’s Fascism. Not National Socialism which people mistake for Fascism, but Fascism as promoted by Benito Mussolini. Peron was a big supporter of Mussolini and implemented a lot of his ideas. Calling Fascism “corporatism” doesn’t really fit the bill. It’s actually better described as “trying to achieve Socialist goals through Capitalist ideas.”

    People like Obama owe more to Mussolini than Marx because Mussolini had the good sense to realize that Socialism, as defined by people like Marx, wasn’t working. Capitalism wasn’t failing, and so Socialist theory needed to be changed to match the reality of the industrializing 20th century.

    It’s too bad that you can’t have an intelligent discussion of Fascism with most people because they assume it means you’re a racist when, in fact, the Fascists were quite antagonistic toward the German race laws.

  30. “It’s not socialism it’s theft”

    Not all theft is socialism – but all socialism is theft.

  31. Heibroner’s definition sounds like what I see called “hard socialism” or communism. There is also the “soft socialism” that Simon Andersson describes, and is pretty close to the current Democrat party line.

  32. Not socialism? Of course not. That would be impossible to pull off, at least all at once. I have a word for you that might enlighten you. The march toward socialism in America has happened, and continues to happen, through the application of the only method available short of all out war, which the couldn’t win anyway. that method is incremental. That’s the word. It started with FDR’s actions with the supreme court and hasn’t looked back. Obama, and most liberals, may not be putting forth direct socialism, but they sure are socialistic in their tendencies. Liberalism used to mean something else. Now it’s nothing more than a cover for incrementally creating a socialist state. Don’t believe it, just get one of them “off record” and ask. They’ll tell you straight up.

  33. The problem isn’t that Obama and the Dems think government is THE solution, it’s that they offer A solution. “Suck it up, weenies,” for some reason, doesn’t resonate at the polls. Unwanted pregnancy? Suck it up, loser. No medical coverage? Suck it up, sicko. Homeless? Get a job, ya bum. When people have NO options, and Obama offers them the hope (maybe illusion) of one, are you surprised they go for it? And what did the Republicans do with their 12 years of control of Congress to forestall this? If you don’t fix a problem, don’t complain if someone fixes it for you – and sends a bill.

  34. Nick,

    “Incremental socialism” is a sort of deadpan, value-neutral way of saying it. I prefer the more evocative phrase “creeping socialism.” Brings to mind assassins, goblins, maybe the Blob….

  35. It’s a mixed economy. Obama promises to change the mix a bit. That’s all.

    Across the spectrum, it’s not feasible to stick a label on every point across the graph.

  36. Your typical left-leaning American decries the the exercise of power by “the Republicans” or ” the Bush administration”, never the State itself or it’s institutions.
    When the Democrats are in power(and even sometimes when they aren’t) the right goes off on the IRS, the BATF, EPA etc. as well as the elected Democrats

    Now you’re being silly. See also left-leaning rants re DHS, DOD, Drug War, IRS and BATF (anarchists). As caricatures, lefties are probably more pro-agency/regulation than righties, but it’s pretty much Pot and Kettle when it comes to the statist tendencies of the controlling political parties.

  37. Yes, by all means, keep trying to elect officials to prove government can’t work.

    Reason is one the biggest jokes online. It should be called Libertarianist-Utopian-Wishful-Thinking-Pseudo-Intellectualism.com

  38. You can play word games all you want, but Obama’s polices are anti-free market. Socialist is a good short hand term with a negative connotation. Even if technically the government doesn’t own the business (though with huge share takeovers we’re not far away from outright nationalization) if it regulates everything closely, takes most of the profit, and provides capital for the business then what else do you want to call it?

  39. wt,
    That’s nice. remember to take your meds.

  40. I don’t think it’s unfair to call him a socialist. The definition of “socialism” has expanded well beyond strict central planning for some time. After all, lots of leftists call most of Western Europe “democratic socialist” or “social democracy”. Or refer to Sweden as a socialist country.

    If Obama’s not a socialist, then neither are they.

  41. Gotta disagree with this one.

    Just because progressives don’t INTEND pure socialism, their methods aren’t socialist?

    Maybe some tempering adjectives like “Socialism Lite” are more appropriate, but I hardly think it’s a “stupid” connection.

    And isn’t one of Hayek’s grand themes against socialism that it starts out small and becomes bigger (or fascist) by it’s very nature?

    I would agree that calling Obama “marxist” is over the top, but even Marx used the term “Socialism” for the stage inbetween Communism and Capitalism.

    And I’d definately call Obama a Social Democrat who would ultimately like to see something like a European style socialism. Whether or not he can achieve it is a moot point if we’re criticizing his intended goals.

  42. Furthermore, the reality is that this supposedly non-socialist “intervention” is exactly the way the government is getting ahold of the means of production.

    You think they’re gonna dish out $3 trillion no strings attached?

  43. Yeah, FDR was a great experimenter, wasn’t he? He didn’t balk at “trying things” like locking up a poor man for pressing a suit for forty cents instead of the NRA-mandated price of fifty cents. Or how about that clever experiment where the government started paying farmers not to grow crops, or destroy food instead of bringing it to market? Last but not least, how about that experiment where he imprisoned American citizens in concentration camps just because they or their ancestors had emigrated from Japan?

    One of the great tragedies of American history is the fact that FDR didn’t die behind bars.

    -jcr

  44. I have never thought Obama is a socialist, at least not in the classic sense.

    I doubt he is a socialist in the classic Marxian nationalizations and withering away of the state sense. I mean, Bush will nationalize everything for him and I cannot see Obama reducing teh state.

    And he is not a socialist in the Lenninst/Stalinist/Moaist sense of forced collectivizations and firing squads.

    I do think Obama is a managerial state type, in the negative Burnham sense or the positive Galbraith sense.

  45. Barack Obama is no socialist… His biggest shortcoming is a common one in his party: the assumption that every problem can be solved by government intervention, and that if a little intervention is good, more is better.

    Huh? OK, it’s nice he’s to the right of Lenin, but that’s a pretty good description of a socialist.

  46. John C. Randolph

    Sorry to interrupt your Roosevelt-hate fest, but his policies actually did produce a recovery, until he regressed to a traditional policy on the budget. While you might focus narrowly on certain policies, the overall drift of his policies did produce a recovery.

  47. joe-

    I don’t know, unless you believe the economy couldn’t possibly have rebounded by itself, FDR’s recovery is largely a matter of faith or rain making.

  48. One helpful definition, from Rothbard:

    One time I asked Professor von Mises, the great expert on the economics of socialism, at what point on this spectrum of statism would he designate a country as “socialist” or not. At that time, I wasn’t sure that any definite criterion existed to make that sort of clear-cut judgment.

    And so I was pleasantly surprised at the clarity and decisiveness of Mises’s answer. “A stock market,” he answered promptly. “A stock market is crucial to the existence of capitalism and private property. For it means that there is a functioning market in the exchange of private titles to the means of production. There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist.

    Also, James Burnham examining the definitional problem of defining how progressivism was developing in the 30’s through Fascism, Nation Socialism, New Deal, etc. came up with Manegerialism to describe what they each had in common.

    Steve D | November 24, 2008, 12:07pm | #
    The problem isn’t that Obama and the Dems think government is THE solution, it’s that they offer A solution. “Suck it up, weenies,” for some reason, doesn’t resonate at the polls. Unwanted pregnancy? Suck it up, loser. No medical coverage? Suck it up, sicko. Homeless? Get a job, ya bum. When people have NO options, and Obama offers them the hope (maybe illusion) of one, are you surprised they go for it? And what did the Republicans do with their 12 years of control of Congress to forestall this? If you don’t fix a problem, don’t complain if someone fixes it for you – and sends a bill.

    The prescription being offered of
    punishing the productive aspects of our economy would restrict the choices of the people even further.

  49. What’s going on in America today, and what “the One” desires to greatly increase, is economic fascism. In other words, the economic policies of the fascist regimes of the early 1900’s. Other words or phrases that apply to this philosophy would be corporatism, industrial policy, or managed capitalism.

    Chapman would have done better if he would have provided an answer to what he perceives as a problem – calling “the One” a socialist.

    As an interesting side-note: It was Karl Marx who coined the term “capitalism.” Obviously, it was a word that was used to paint free markets in a negative light.

  50. I do think Obama is a managerial state type, in the negative Burnham sense or the positive Galbraith sense.

    Was typing while you posted this ~ //Wavelengths.

  51. >Was typing while you posted this ~ //Wavelengths.

    Alan — great minds, or in our case, just same wavelength I guess. 🙂

  52. “joe-

    I don’t know, unless you believe the economy couldn’t possibly have rebounded by itself, FDR’s recovery is largely a matter of faith or rain making.”

    He’s just trying to stir up some agitation.

    He knows that there is no way he can prove that anything FDR did created a rebound in the economy.

  53. In the Friedman’s book “Free To Choose” they write:

    “In our opinion, there is no case whatsoever for socialized medicine. On the contrary, government already plays too large a role in medical care. Any further expansion of its role would be very much against the interests of patients, physicians, and health care personnel.”

    Chapman must have missed that…

  54. If Fascism is producing Capitalism through Socialist ideas then surely what is happening now would be strengthening capitalism through socialist traditions.

  55. “economist | November 24, 2008, 10:16am | #

    And talking about Karl Marx’s belief that the state would “wither away” doesn’t work. Show a real-world example of Marxist state actually “withering away”.”

    The Union of Soviet Socialist Republics state withered away. Unfortunately, it didn’t leave a communist paradise behind. They never do.

  56. You DO know that “government ownership and control of the means of production” is EXACTLY what’s being pushed right now, right?

    I mean, if you’re going to write an article claiming that this isn’t happening, you’re flatly wrong.

    Rep. Maxine Waters THIS YEAR attempted to get support for a bill to nationalize the oil companies.

    The bailout of the financial markets leaves the government in part ownership of the banking system.

    The proposed deal – Speaker Pelosi’s proposed alteration to the hopefully defunct automaker bailout – is to use government funds to provide them capital by buying up huge chunks of their operations.

    You may be “unaware” of this, but simply stating that this ISN’T socialism is, well, wrong, and misleading.

    Stop that.

  57. None of those were me.

    Isn’t it awesome to know that somebody’s doing that?

  58. Seriously, “Sorry to interrupt your Roosevelt hate fest..?”

    I don’t write like that.

  59. This article seems rather like the people who try in vain to separate the term “cracker” from “hacker” in common parlance.

    Accept that accepted meanings of the term change, and move on. Lacking true socialists modern socialism equals government intervention in everything.

    Just as a business plan you cannot explain in an elevator will fail, so to will any explanation of why you think government expansion to be misguided will fall on deaf ears until you can find a shorthand to hang you hat on. “Socialism” is that shorthand, or at least the best one that people will be able to associate the most correct links from.

  60. I read in some article that the “redistribution of wealth” that’s really going on right now and has been for the past several years is from my generation (whatever they call the one after “generation X”) and the one after mine to the current generation(s) of people who are “running things.” I’d like to think that after you all die and my generation is left with no social security and society crumbles that we will finally be able to rebuild it from principles that make sense.

  61. This is an interesting discussion, but I think a bit of perspective might be in order. Read article five of the constitution. You know, that’s the part where the federal government is told what it can do, and that it can ONLY do those things enumerated. How much of current federal operations are covered? How much of the budget could be cut if the fed stopped doing stuff it’s not supposed to be doing? How much LESS tax revenue would be needed?

    When a bureaucrat, a public school official, or some other unelected “official” cops an attitude with you or acts like he has some overriding authority over you and your life, then the country has gotten WAY too socialist. Especially if you’re uneducated or uninformed enough to let them get away with it. Even the slightest bit of socialism is antithetical to the idea and ideals that are America.

  62. Mr. Chapman’s thoughful article states an important truth about Obama’s typical big-government liberalism. But Chapman’s denying that Obama is a socialist is simply incorrect.

    Chapman says that conservatives should not accuse Obama of being a socialist because it’s not true. Correct: Obama is actually a Marxist, which is much worse.

    Chapman then says that accusing Obama of being a socialist makes the accuser sound like an idiot. But why? Only to those who think discussing such issues is idiotic, but not to anyone else who understands the dangers of now having elected America’s first Marxist-socialist president. Just because most liberals don’t care that Obama is a socialist doesn’t make the issue a trivial one.

    Chapman is correct that Obama’s big-government lust will lead America totally in the wrong direction. But Chapman is wrong to minimize Obama’s socialism. It IS true, but the real danger is that most people don’t seem to care.

  63. Socialism, economic redistributionism, predates and post-dates marxism.

    If you’re going to be pedantic, at least be right. Combining it with ignorance is not attractive.

  64. Even Marx himself was suitably vague enough not to lay out the command economy as the final state of man.

  65. Yes, Obama is no socialist. He is a fascist. The fascist style corporatism started at the end of the Bush administration will continue and be expanded in the up coming administration. Why? Well perhaps because he’s filling his cabinets with the players that brought us this mess. To quote Hitler: “We do not need to socialize petty property, our socialism is much larger than that, we socialize souls.” The government need not own private firms outright if they can tell them what to do.

    1. The fascist style corporatism started at the end of the Bush administration 19th century.

      FIFY

  66. Chapman prefers to ignore Obama’s firing of CEOs of private industry, placing caps on salaries, appropria-ting of self-delegated powers, con-gressional silence on the whole. Don’t I recall something like this in pre-“Stalinist Russia?
    Come out of your cloistered hall, Chapman! Rome was neither built nor destroyed in a day.

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