Reading the news has been exciting lately. Hardly a day passes without the announcement of some new government initiative to save the world. Bail out the mortgage lenders; bail out the big insurance company; bail out the banks; bail out the money-market funds; bail out the commercial-paper sellers; bail out the depositors in belly-up banks; bail out the automobile companies; bail out the deadbeats who didnt make their mortgage payments when they came due. When the Treasury bumps up against its borrowing limits, and interest rates begin to rise on its bonds, bail it out, too, by having the Fed flood the worlds credit markets with new reserves created by nothing more than a snap of its electronic finger. Who knows what industry, special-interest group, or noisy whiners bloc will be bailed out next? With the Fed standing ready to inflate without limit, the festivities need never end.
Of course, our rulers assure us that they will defend the taxpayers interest like pit bulls. Why, just recently, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid sent a letter to Treasury Secretary Henry Paulson in which they declared, We must safeguard the interest of American taxpayers [and also, they continued] protect the hundreds of thousands of automobile workers and retirees, stop the erosion of our manufacturing base, and bolster our economy. Whew! These dedicated public servants clearly do not intend to rest until theyve pretty much cured all the worlds visible ills, including bad breath and flat feet. If they fail, in any event, it wont be because they were too timid about throwing the taxpayers money at the problems.
All of which raises the eternal question, have we become a communist country yet? Yes, I know you probably think this question is silly, but I intend to treat it with the seriousness it deserves in the light of past, present, and likely future government actions. To ensure that I do not adopt an irrelevant or tendentious set of criteria in my inquiry, I will consider the question with reference to the list of ten measures that Karl Marx and Friedrich Engels presented in the Manifesto of the Communist Party as pretty generally applicable for the establishment of communism in the most advanced countries. In the following text, I reproduce each of Marx and Engelss points verbatim in bold font (from the 1955 edition of Samuel H. Beer), followed by my own evaluation or commentary.
1. Abolition of property in land and application of all rents of land to public purposes.
Of course, in this country we pretend to have private property in land, except for the huge amounts of land owned outright by governments, especially the enormous federal holdings in the western states and Alaska. But land taxation, land-use controls, and other regulations that trench on the rights of ostensibly private owners have already cut a big slice out of thoroughgoing private property rights in land. As environmentalism marches boldly onward, private property rights in land are likely to be chipped away further and further. Land rents, of course, are taxed along with other property income.
2. A heavy progressive or graduated income tax.
In place. Worse to come.
3. Abolition of all right of inheritance.
Some right of inheritance remains, but estate (death) taxes have demolished much of its substance. Under the next administration, we might well see renewed attempts to tax the rich more heavily by means of increases in estate-tax rates or changes in bracket levels.
4. Confiscation of the property of all emigrants and rebels.
Well, the rebels here are simply shot dead (see encyclopedia entry for American Civil War), even if their rebellion takes a muted and inconspicuous form (see entry for Ruby Ridge). As for the emigrants, if the federal government believes that it can squeeze a dime out of them after their departure, they will be hounded to the ends of the earth for purposes of legalized robbery (aka taxation). I am not a lawyer, but I notice that the law in this regard appears to be extremely complicated. I recommend that you consult your tax attorney before renouncing your citizenship or even moving abroad without renouncing it. Remember the governments motto: youve got money, and we want it.
5. Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.
We call it the Federal Reserve System. As if it were not enough, the government is now in the process of taking an ownership position in hundreds, perhaps ultimately thousands, of private commercial banks by means of preferred corporate shares gained in exchange for its bailout doles.
6. Centralization of the means of communication and transport in the hands of the state.
Despite PBS, NPR, and other outright socialist media, most of the means of communication in this country purport to be privately owned and managed. Dont believe it, though. No radio or television broadcasting station can do business until it obtains an operating license from the government. In addition, the Federal Communications Commission makes rules right and left for these stations, often in insultingly trivial detail. Newspapers remain somewhat freer for the moment. It appears that the government has tamed the publishers and reporters sufficiently, rendering them little more than amplifiers for its propaganda, so that no further purpose would be served by nationalizing them. Indeed, permitting them to exist as ostensibly private entities allows the government to spread its lies more effectively than it could by operating its own Pravda or Izvestia.
As for transportation, we have Amtrak, of course, as well as countless government-owned bus, subway, and surface train systems in various cities. But we also have licensing, regulations, taxes, and subsidies galore in the so-called private transportation sector, bearing on cars, trucks, buses, and aircraft, so that any resemblance to capitalism, living or dead, in that domain is purely coincidental.
7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.
Except for war-related plants, which the government has built in abundance and continues to own in many instances, the government for the most part has not felt the need to take over manufacturing facilities. If, however, the current proposals to include the Detroit car companies in the big bailout proceed as the Democrats wish, then the government may take an ownership interest in them, just as it is acquiring corporate shares in the banks it is bailing out. Cars built in government-owned factories: what a deal! Remember the Trabant? Holy Smokes, Fräulein! Please, God, do not let them take us there.
Some industries, such as those producing ethanol and beet sugar, would scarcely exist, but for government subsidies or protection from foreign competition, but in a formal sense, they comprise private, not government-owned, undertakings.
As for recovering the waste lands and so forth, weve had the Bureau of Reclamation for a century, subsidizing foolish dam-building and unprofitable irrigation of deserts all over the West. The ongoing conspiracy between members of Congress and the Corps of Engineers bids fair to destroy all the natural resources that the Bureau of Reclamation has not polished off. For the improvement of the soil generally in accordance with a common plan, weve had the USDA for a century and a half. If it improves the soil any more than it has already, the dirt will cry out for mercy. (The taxpayers wont complain, of course, having been persuaded that the whole rigmarole aims solely to support the small family farm, an economic institution whose importance in the modern economy now rivals that of the small family pizza parlor.)
8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture.
Thanks to the ingenuity of capitalist inventors, entrepreneurs, and businessmen, we now find that enormous amounts of goods and services can be produced with only a small fraction of the resources previously required. In light of this development, the government has decreed, in effect, an equal obligation of none to work. If you are an ordinary layabout, you may collect unemployment insurance benefits, countless forms of welfare and other public assistance, and generally devote yourself to a life of unproductive dissoluteness. If you are a lousy business manager or owner, you may collect your bailout money and the rest of the lavish subsidies the government uses to keep crummy businessmen at ease, and generally devote yourself to a life of unproductive dissoluteness. Marx and Engels must be high-fivin in Socialist Valhalla: in this country the workers and the capitalists are finally completely equal!
9. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between towns and country, by a more equable distribution of the population over the country.
Marx worried excessively about this matter because he lamented the idiocy of rural life. Having been born and reared in rural backwaters, I know what he was talking about. In this country, however, the problem has been obviated by educational and cultural developments that have effectively reduced the entire population, urban as much as rural, to a condition of idiocy. Notice, for example, that not a single teenage girl in the United States, whether she lives in a town or in the countryside, can accomplish even the simplest task in a public place without holding a mobile phone to her ear. Many teenage boys seem to suffer the same incapacity, but bigheartedness compels us to admit that they may actually be using the phone for business. Needless to say, none of these kids can make change, but―hey!―MacDonalds and other retail outlets have faced this idiocy squarely and defeated it by putting pictures on the cash registers. If a kid can see, he can sell burgers. Eat your heart out, Karl and Fritz.
10. Free education for all children in public schools. Abolition of child factory labor in its present form. Combination of education with industrial production, etc.
Weve long had the free education, of course. For the results, go back and read my comments on the previous point. Not that innumeracy is the only outcome of this socialized schooling; would that it were. A kid may not know how to divide two fractions, but he knows that unless his parents recycle the trash, they are destroying the planet. Factory employment of children would be a Godsend for the parents of many of the sixteen-year-old lads and lasses now cluttering the malls or whiling away their youth playing daft video games.
* * *
So, here we stand, having come close enough to communism for government work. It is a mistake, however, to call it communism or socialism, because a major part of its genius is its preservation of the form of private property rights, even as the substance of such rights is progressively gutted. Properly speaking, our system is, and long has been, economic fascism. Its a free country, the Red State voters keep yelping. But its not. In truth, it never was. But a hundred years ago, it came a great deal closer to being free than it does now.
So long as the rulers left even a semblance of private property rights in place, however, entrepreneurs kept finding ways to make a buck by serving consumers. Despite being ever more hogtied, they kept bursting the bonds, working around the obstructions, undercutting the looters and world-savers, and benefiting their fellow human beings. Theres a great deal of ruin in a nation, Adam Smith opined, and on that score he certainly must have been right. But we can continue down this fascistic economic road only so long. Therefore, in the present distressing circumstances, we may be warranted in asking: is our politico-economic system finally going smash in a frenzy of monetary inflation, bailouts, and government takeovers? Well know the answer pretty soon.
Robert Higgs is Senior Fellow in Political Economy at The Independent Institute and Editor at Large of the Institutes quarterly journal The Independent Review. He received his Ph.D. in economics from Johns Hopkins University, and he has taught at the University of Washington, Lafayette College, Seattle University, and the University of Economics, Prague. He has been a visiting scholar at Oxford University and Stanford University, and a fellow for the Hoover Institution and the National Science Foundation. He is the author of many books, including Depression, War, and Cold War.
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