Are We All Socialists Now? Not at All
By Robert Higgs on Feb 7, 2009 in Economics, Fascism, Politics, Property Rights, The State
The headline of Newsweek’s current cover story reads: “We Are All Socialists Now.” The story tells us that Republicans and Democrats, oligarcos y peones, have given up on the market economy and, however reactionary some people’s rhetoric may be, we are all in fact being swept toward bigger government by an irresistible wave. Pretty soon, we Americans will be just like the French, though lacking a comparable command of the beautiful French language.
I don’t recommend the Newsweek article. Although the writers, Jon Meacham and Evan Thomas, have absorbed a number of true facts, their level of economic understanding is abysmal, and hence their reasoning is close to worthless.
Truth is, socialism is not the wave of the future. Indeed, it is already almost as dead as the dodo. Hardly anybody in a position of political power or influence now wants to establish socialism along the lines of the Soviets or the Maoists. Everyone knows that doing so is a one-way ticket to widespread poverty, which leaves precious little surplus for the political kingpins to rip off.
No, the world is converging ever more visibly, not toward socialism, but toward what I (following Charlotte Twight’s usage) have for many years been calling participatory fascism. The hallmarks of this system are, on the political side, the trappings of democracy (parties, elections, procedural niceties, etc.), and, on the economic side, the form of private property rights (though not much of the substance that characterizes the real thing).
The beauty of this system is that the political system can easily be corrupted so that the power elite retains a firm hold on the state, despite the appearance that they rule only with the consent of the governed. The major political parties appear to compete, but for the most part they coalesce and conspire; on the basics, they are in complete agreement. The apparent “consent” they enjoy they actually manufacture by their control of the mass media, the schools and universities, and other key institutions, and no political opinion outside the 40-yard lines ever receives a hearing in serious political circles. (Remember how the oligarcos rolled their eyes when Ron Paul managed to get in an occasional word during the debates last year?)
And while the ruling establishment retains an iron grip on state power, it allows entrepreneurs just enough room for maneuver so that innovators can continue to produce the new products, new methods of production, new raw materials, and new organizational forms that move the economy forward. The most enterprising entrepreneurs can still get rich, although even they will see a large chunk of the fruits of their labors ripped away by the state. Productivity will increase sufficiently to keep a growing supply of creature comforts and amusements flowing to the masses, who are content with these things, along with the illusion of security that state functionaries induce in the people.
Lest you suppose that the masses are getting a raw deal, because their level of living would be so much higher in a genuine free-market system, bear in mind that virtually all of these people despise the free market. If you don’t think so, just give them an opportunity to live in one or even to move in that direction, conditional on their willingness to accept the personal responsibility and bear the risks that attend life in such a system—and you’ll see them flee quicker than a vampire exits at the first light of day.
How do you think we got into our present situation, anyhow? It’s not as though the masses were repeatedly given what they didn’t want. They had plenty of opportunities to say no to dependency on the state, but they turned away; and they do not intend to go back any time soon to what they imagine to be an unbearably harsh style of life. Rugged individualism might have been okay for their great-grandparents, but they want no part of it.
All of which leaves us—by which I mean nearly everybody on earth—converging on the only form of politico-economic system that has a stable equilibrium in our present ideological circumstances: participatory fascism. I am not saying that this system is the only one possible, forever and ever, amen. I am saying, however, that until the world’s people abandon en masse the collectivist ideologies that now determine their social cognition, policy evaluation, political practices, and personal identities, any hope for moving to a freer form of economic order as a stable equilibrium is virtually nil.
Anyone who would like to see the preceding argument spelled out in greater detail will find my most recent statement in the final chapter of my 2007 book Neither Liberty Nor Safety.
Dr. Higgs,
Thank you. Your insights continue to blow me away. A friend and I have been discussing this very subject for a long time. We’ve decided that the few who still continue to hold a Classical Liberal position are being run over by history. We, like the dinosaurs, have had our time and the virus of collectivism is rapidly causing our extinction.
I will forward this to everyone I know.
RickC | Feb 8, 2009 | Reply
This is an excellent description of what our political system has degenerated into. I really wonder, though, if the equilibrium will really last much longer. What will happen when unemployment goes much higher, price inflation really takes hold, and the state starts having trouble keeping the bread and circuses going? I don’t know the answer, but I think we will have entered new territory.
D. Saul Weiner | Feb 8, 2009 | Reply
Not everyone believes that socialism and communism lead to ruin… Some of them think that it would all work in an “ideal system” which they claim all variants throughout history failed only because they were not ideal rather than the failure of those economic systems… It’s rather disturbing… that history has been ignored or even forgotten in their minds…
mike | Feb 8, 2009 | Reply
It was Christianity (and Judaism) that made such liberty possible. With the rejection of that worldview, the world returns to fascism—the group will-to-power and the god-kings.
Cincinnatus | Feb 9, 2009 | Reply
I’m of the opinion that we have lived too long under the yokes of Communism and Socialism and Fascism and Religionism and the time is now ready for the return of a golden age so magnificent as to set a precedent of the likes of which has never been seen before on this planet.
The destruction of the world’s economy is the breaking of the chains that have bound us all for over a 150 years since the introduction of the Prussian schooling system.
Very soon the whole thing collapses and the invisible chains will really fall away once we return to a gold- and silver-based currency.
Bernard Palmer | Feb 10, 2009 | Reply
Where is the next Patrick Henry?
John Smith | Feb 10, 2009 | Reply
Bernard Palmer,
Cincinnatus is correct. The ideas of liberty, reason, science, justice and mercy sprang not from the reductionism of atheism (metaphysical naturalism) but from Judeo-Christian teachings which led to the work of Thomas Aquinas and the development of natural law in ethics and economics. There have been many types of religion as mankind has attempted to comprehend non-material reality, and some have definitely led people astray into evil, but Christian natural law has provided the requisite path of discernment enabling us to turn away from tyranny and narcissism toward truth, goodness and beauty. It is no accident that the neo-barbarism embodied in socialism, fascism and communism stems directly from the utilitarian ethics and moral relativism of modernist atheology.
For an excellent account of this, please see Rodney Stark’s book, The Victory of Reason: How Christianity Led to Freedom, Capitalism, and Western Success. And the classic book on the natural law is C.S. Lewis’s The Abolition of Man.
David Theroux | Feb 10, 2009 | Reply
David Theroux
I’m not espousing atheism. The world is too beautiful and interesting to exist without a loving god. It’s religions I dislike. They become hives of Conformist and their Conformist views are really the views of their high priests, which the lower ranks then parrot so when they vote they vote as they are told. I believe the only truly religious person is one who accepted the tenets of a religion as an adult without prior working knowledge of that religion. The rest are I believe brainwashed from birth. That’s the Religionism I dislike. I’m sure the early Christian converts were wonderful.
Myself I was brought up in a family of agnostics. My elder brother became a Roman Catholic in his twenties and loved his religion till the day he died. I have never encountered a religion worthy of my full attention but I have had no doubt in the existence of a benign creator since early childhood. My wife is a Buddhist. Our children agnostic.
If you say Christianity is wonderful and has given us what we have today then I rest my case against Religionism especially in regards to the War on Drugs which has apparently been promoted by all religious groups at some time or another.
As I see it the only thing we have never tried in the modern world is Capitalism backed by gold and silver. Capitalism with fiat currencies is actually Socialism pretending to be Capitalism and Socialism is the spawn of the devil conceived in a goldless society and heavily backed by Religionism and their attendant lawyers. Lawyers are the clerics of yesteryear. All Socialism Democracies are run by lawyers, ipso facto all democracies are probably Theocracies and all heavily linked to Religionism.
Bernard Palmer | Feb 11, 2009 | Reply
Keep up the good work, Professor Higgs. You are an inspiration to us all.
One of the major challenges facing the party of peace and freedom today lies in getting the masses to want liberty (the opposite Fabian strategy of converting the elites is a dead-end), and the key to this is exposing the system for what it is: a form of Fascism. Perhaps the major stumbling block is the debate over these Platonic categories “Capitalism” and “Socialism”. Our system is not capitalism as it would have been understood by classical liberals, nor socialism as it would have been understood by classical socialists. We need to begin to understand it as “The Fascism which succeeded”, unlike the German and Italian varieties. Perhaps the “participatory” element is what allowed it to do so.
As the average person sees it, there are two opposing forces in the world: Government and Corporations. If you are not for one, you are for the other. We need to expose the hidden connection between the two, and show how it is an interlocking power structure.
Though I think the free-market has won some permanent ideological victories since FDR’s day (you will not, for instance, see high tariffs or wage and price-controls or overt cartelization except in extreme and desperate circumstances), the fact remains that the average person is not convinced by “leave it to the market” arguments, which seem to them like some kind of mysticism. In part this is because the average person does not understand economics. But part also is that libertarians have made a huge blunder in allowing conservative statists to monopolize and corrupt “free market” rhetoric (How often lately have we heard that the problem lies with letting the “laissez-faire libertarian” Alan Greenspan to run wild?); and, conversely, letting patrician liberals claim populism for themselves (this populism, like the notion of ol’ magnanimous papa FDR as a “traitor to his class” being as phony as a one-dollar federal reserve note).
Ray Mangum | Feb 14, 2009 | Reply
“that Republicans and Democrats, oligarcos y peones, have given up on the market economy”
The US first and foremost has a democratic form of government, and that means that the people get to decide how we organize our economy. If people vote to “give up on the market economy”, that’s their right. If you want to change their preferences, wagging your finger and whining isn’t going to do it.
Mike | Feb 17, 2009 | Reply
I follow what you say very closely because, in my opinion, it rings truer than just about anything else I hear out there.
shill | Feb 18, 2009 | Reply
No, Mike, the U.S. First and Foremost is a Republic, ruled by Law, not the mob of democracy. When Rome degenerated from a Republic into a democracy, it fell. Our legislators are ignoring the Rule of Law not just by letting the people give them power that they don’t legally have, but by encouraging the people to give them power they don’t legally have.
Admittedly, the people have allowed this sad state of affairs, because they prefer comfort over freedom.
Rusty Ragan | Feb 19, 2009 | Reply
Thanks for the story. Very professional.
Jonathan | Feb 25, 2009 | Reply
Your reasoning completely escapes me, sirs (one of us needs to check our premises):
The age of reason and the Enlightenment laid the foundation of modern classical liberalism. Its roots may well be found in Aristotle and Lao Tzu, (even Aquinas) but the movement began at a time when church power finally waned, after one thousand years of church-induced Dark Ages. The ideas we associate today with liberty blossomed, not because of the grand superstition known as religion, but in spite of it.
There is a mountainous body of work, called history, detailing how organized religion and the state (“Faith and Force”) have been NOT the engines of humankind’s evolution, but—au contraire—its ball and chain.
…I’m not an atheist, either.
Bernard Palmer, in spite of his utopian tone, is talking common sense.
Johnson | Mar 1, 2009 | Reply
Johnson:
The view that the “Enlightenment” ushered in an “Age of Reason” that brought “light” to a world caught in a “Dark Age” is a myth. As historians David Lindberg, Ronald Numbers and others have shown, this myth became accepted primarily as a result of the erroneous claims by mid-nineteenth century, American polemicists William Draper and Andrew Dickson White, whose writings stressed the “conflict” or “warfare” between science and Christianity. Innumerable scholars have since refuted such views as simply unfounded.
The ideas of science, reason, liberty, the rule of law, natural rights, etc., all came out of the Middle Ages as a result of the work of Christian Scholastic clerics in the universities and monasteries. Indeed, it was deeply devout people such as Thomas Aquinas and Francisco Suárez who unpacked Judeo-Christian teachings and, drawing upon those intellectual currents in Ancient Greek and Roman thought that comported with such insights, discovered natural law in ethics and economics and opposed slavery, infanticide and other barbarisms that were universal in pre-Christian societies. The result produced the very ideas that led to the rise of the ideas of and institutions that championed science, commerce, and natural rights. A sampling of the many references to consult include the following:
In contrast, the “Enlightenment” (a religious term that itself conveys a belief in man-made “redemption”) departed from natural-law thinking in significant ways, opening up a worldview in Western societies of moral relativism and epistemological subjectivism, reductionism, and utilitarianism that led directly to the scientism, collectivism, statism, wars, genocides and other horrors of the 20th century.
David Theroux | Mar 1, 2009 | Reply
Please, can you mail me and tell me a few more thinks about this? I am really like your blog.
Dollar Coin | May 17, 2009 | Reply