February 09, 2010
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May 22, 2009

Corporatism comes to America

By Lee Cary
"Fascism should rightly be called Corporatism, as it is the merger of corporate and government power." Benito Mussolini

Some members of the Republican National Committee have recently wondered aloud what others of us wonder privately. What name do we give to the direction in which Democrats and the Obama administration are taking America?

In 20th Century Italy and Germany, particularly during 1933-1945, fascism merged the self-interests of despotic, single-party rulers with large corporations for whom big war offered big profits. Mussolini called it Corporatism. 

In 1937, when thoughtful people were examining the major economic systems queuing up to fight another world war, British philosopher E.B. Ashton wrote,

"Summed up...a Fascist economic structure might read as follows: organization of the national economy into independent bodies along trade or industrial lines; within these bodies equal rights to employers and employees in determining wages and working conditions, with any sort of struggle strictly forbidden and the state installed in every organizations superior authority." 

(Sounds like the new U.S. auto industry, does it not? Of course, as we're told, it's just temporary.)

"The economic structure of the Fascist community is quite as logical as all its other aspects. Starting from the two given bases of collectivism and capitalism...one can hardly fail to arrive at it as at the natural economic expression for a political system build upon those foundations." (The Fascist, His State and His Mind, E.B. Ashton, 1937, p. 91, highlights added)

Despite whiffs of commonality between fascist economic behavior back then, and what's happening here now, fascism as a current descriptor is off-limits -- at least for the time being. The word carries too many horrific images of barbaric terror brought by despots wielding weapons provided by the industrialists of fascist economies.

In comparison, socialism, particularly as it leans more heavily on an anti-capitalist mentality than did fascism, is more often used by opponents of the current trend.

Stalin's extreme expression of socialism, communism, carries a body-count reputation nearly as odious as Hitler's Nazi Germany. But post-war Western European applications softened the word so as to make it less ominous to most, and even respectable among the liberal left. (How the definition of "liberal" shifted 180 degrees from its original meaning is a topic for another time.)   

The U.S. government's role today in the banking and automobile industries sure looks,  walks, and quacks like socialism, as Ford Motor Company is about to become the last free-enterprise American car company.

So just what are the key indicators of socialism? Albert Einstein offered several.

Einstein escaped a Europe about to plunge into a conflagration that engaged the big three -isms of the 20th Century: socialism, fascism and capitalism. Interestingly, he sought refuge in the bastion of capitalism, the United States. Then ironically, after the war, he declared capitalism a failed system that needed to be replaced by socialism. 

"I am convinced there is only one way to eliminate these grave issues [of evil capitalism], namely through the establishment of a socialist economy, accompanied by an education system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow-men in place of the glorification of power and success in our present society."  (From his article entitled "Why Socialism?" that appeared in the Monthly Review, New York, May, 1949)

That last line in Einstein's quote sounds like an abstract of President Obama's Notre Dame speech.

The antidote to the evils of capitalism is, according to the socialist, the "planned economy" wherein the central planners, omnipotent in discerning "the needs of the community," direct the consumptions of society.

Socialism offers to cure what the two professorial authors of the book de jure in the White House define as the "downside of capitalism." 

"It does not automatically produce what people really need; it produces what they think they need, and are willing to pay for."  (Animal Spirits, George Akerlof and Robert Shiller, p. 26, italics in the original)

So there it is. A truly happy home -- a metaphor the authors use -- brought to us by the central planners of the federal government who know better than we do what we need.  Enlightened public servants that they are, they'll do our consumption planning for us.  

That sounds like a welcome rescue to consumers duped by the evils of capitalism, until we remember that these central planners are descendants of the ones who, over a series of administrations, brought us the War on Drugs (How's that going?), the War on Poverty, Medicare (Chocking on fraud), No Child Left Behind, Aid to Dependent Children (That enabled dependent adults), Public Housing (Like the failed Chicago Housing Authority), Social Security (That recently mailed over 10,000 checks to dead people), the Securities & Exchange Commission (Sleeping watchdogs), the Fed (Long led by Alan, The Grand Wizard, Greenspan), Veterans Administration Hospitals, the Pre-9/11 "intelligence community" (That missed the flights), FEMA in Katrina (Still parking thousands of unused mobile homes at the Hope, Arkansas airport), border (in)security, the Vietnam War, Amtrak (Never on track), and a public debt beyond comprehension. And eventually into bankruptcy, a la Cal-ee-four-knee-ah. 

These and others failures of bureaucratic central planners represent the patterned under-achievements of our government's effort to copy the old Soviet Union's Gosplan (State Plan).

Today, we've adopted the USSR's Gosbank (State Bank). Our Gosbank has two main branches: the Fed that prints and distributes money; and the U.S. Treasury that manages the banking industry. Commissars Bernanke and Geithner as the super-central planners.

Meanwhile, the consumer -- once king in the capitalist system -- becomes the benefactor of the wisdom of the bureaucrat to whom, according to Marx, "the world is a mere object to be manipulated by him."  

So, what's our future to be?  Expanding collaboration between big business (With GE's Immelt as the poster boy) and bigger government moving in tandem toward a kinder-and-gentler fascism?

Or, with its central planning and collective ownership, is socialism the goal?

However we name it, it most definitely is not free-market capitalist economy where,

"[I]n the market of a capitalistic society the common man is the sovereign consumer whose buying or abstention from buying ultimately determines what should be produced and in what quantity and quality." (The Anti-Capitalism Mentality, Ludwig von Mises, 1956, p. 1.)

With each passing day of the Obama administration, the battle of individualism versus collectivism is further engaged. Many of us pushing back against the trend are finding it hard to label where we're headed as a nation. Here's why.

Obama is borrowing the worst elements from the two greatest economic catastrophes of the 20th Century: fascism and socialism. Consequently, we're moving further away, every day, from the most successful economic system in the history of humankind: capitalism.

Meanwhile, a widely economically illiterate population, lulled into complacency by the affluence brought by capitalism, has forgotten the lessons of the past as the fall of the Berlin Wall fades away in our collective rearview mirror. Slow to awakening to the change underway, it will be a fait accompli by the time our alarms go off.

on "Corporatism comes to America"
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