Field Guide to Socialism and Its Beneficiaries

"Socialism means, among other things, using political agencies to provide goods and services that otherwise would be provided privately in the marketplace.  In its most extreme form, socialism means government direction of the economy as a whole.  Socialism in its milder expressions takes the form of nationalized industries (the Chilean copper-mining industry under Allende, Pakistan's petrochemical sector and heavy industries under Bhutto), government ownership or direction of firms (Alfa Romeo under Mussolini, the Japan National Railway), direct government provision of goods and services (the British Health Service), or government management of nominally private marketplace activities (farm subsidies in France, Fannie Mae in the United States).

"A slightly more technical definition of socialism is this: the public provision of non-public goods.  'Public goods' is a loose phrase, of course, and it means different things to different people [explained more fully by Williamson in a footnote which I will allow you to hunt down for yourselves in his book--FB].  For the purposes of this discussion, the expression will be used in its technical economic sense: 'public goods' does not mean things that are good for the public or things that the public wants, but goods that by their nature cannot be easily provided by the free market, goods such as national defense, law enforcement, and certain kinds of public services.

"Every government undertaking engaged in the public provision of non-public goods is an instance of socialism, at least at a trivial level.  But socialism of that sort probably is better described as 'welfare statism.'  As a practical matter, all modern governments engage in some public provision of non-public goods, and, therefore, engage in what we might call low-level socialism, or ad hoc socialism.  That does not mean that every government is, in a meaningful sense, socialist, or that it would make sense to describe every government that runs a public school or a state highway as socialist.  There are questions of degree, and questions of judgment, and the answers to those questions will vary from case to case.

"So what distinguishes a garden-variety welfare state from a system that well and truly deserves to be identified as socialist?  Beyond the public provision of non-public goods, a second factor--economic central planning--will be crucial to identifying and understanding what differentiates real socialism from the normal mishmash of welfare-state policies typically found in Western liberal democracies and affiliated forms of government.

"What is important to realize is this: socialism...is not entirely synonymous with welfare-statism.  Socialism is not simply about the redistribution of wealth or income through taxes and government-assistance programs.  Socialism is often described as a system that makes charity compulsory, but it is much more (and, at the same time, rather less) than that.  Socialism means central planning.  A food-stamp program is welfare; government-run farms and grocery stores are socialism.  A government housing subsidy is welfare; government-run housing projects are socialism.  A school voucher is welfare; a government-run school system is socialism....

"Socialist central planning always works best for the class that produces the central planners, who can see to it that their own interests are relatively well served, which is why in the United States socialism is a phenomenon of the middle class, not the working class.  It is, contrary to the Hollywood version of American politics, also a corporate phenomenon; Big Business is a reliable friend of central-planning regimes, because large enterprises believe, correctly, that they will be able to use the planning apparatus to serve their own interests, for instance, by using heavy regulatory burdens to prevent new competitors from entering their markets....

"Here it's worth reiterating a point made early in this book: socialism is not principally about redistributing wealth or income from the rich to the poor.  Socialism is about politicians planning the economy.  Politicization of the economy, not redistribution, is the hallmark of socialism.  Redistribution, while an economically complex and morally fraught issue, is a normal part of practically every modern welfare state.

"Socialism, properly understood, is something quite different.  And while a high degree of redistribution necessarily accompanies socialist planning efforts, that redistribution often channels wealth and income from the poor and middle classes to the wealthy--particularly those who are either members of the political-planning class or who can exploit connections to that class for their own benefit.  It's worth keeping in mind that the erratically socialist management of the U.S. agricultural industry mainly benefits individuals with a net worth of more than $1 million and giant agribusiness conglomerates such as Archer Daniels Midland and Cargill.  In the case of oil socialism [a.k.a. U.S. "energy independence"], those looking for a place at the planners' feeding trough include Oklahoma oil billionaire T. Boone Pickens, as well as Al Gore and his business partner David Blood, who are heavily invested in 'alternative energy' operations that stand to benefit from (and which are only economically viable when accompanied by) massive government subsidies."

--Kevin D. Williamson, The Politically Incorrect Guide to Socialism (Washington, D.C.: Regnery Publishing, 2011), pp. 7-9, 12, 187-88.

In case you're wondering, yes, according to Williamson (p. 237), "ObamaCare is socialism."  It is centrally-planned and "it features such secondary features of socialist enterprise as income-redistribution, economic leveling, the co-opting and nationalization of private enterprises, and the elevation of an elite planning class that is not subject to the rules it will draw up for the rest of the country." And, no, this is not just a fantasy of Sarah Palin's; there will be rationing.  And people will be denied healthcare on purely financial grounds, particularly the old and chronically sick, just as they are with the NHS (pp. 246-47).  Because--and here's the kicker--central planning doesn't work.  Not because "real" socialism has never been tried, but because everywhere socialist central planning has been tried, it has failed--miserably.  Plus, it's bad for the environment.  Just look at the Aral Sea.

Comments

  1. 'In case you're wondering, yes, according to Williamson (p. 237), "ObamaCare is socialism."'

    Just to clarify, that's not actually so clear even from his definition. Nor is it clear that public education is inherently socialistic. You have to accept his assertion that these are non-public goods. I don't consider that assertion to be obviously true (or actually true, for that matter). If by "according to Williamson" you simply mean that he is of the opinion that these programs are socialistic, I accept that.

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  2. @nkh: If you're curious, he has a whole chapter on public education in the U.S. (chapter 6). I think that his definition of socialism helps a great deal, particularly his distinction between welfare statism and central planning. It's the central planning that leads to disaster because it cannot (and does not) respond to the market, the only actual source of what prices "ought" to be charged for goods. Williamson explains how this works in chapter 3.

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  3. @FB: I actually don't need a refresher on price discovery. And certainly not a another 21st century rehash of 19th century classical liberal economic ideology. I would be interested to hear what you believe the structure of these markets are that always achieve the prices that "ought" to obtain. It would also be interesting to know what you think "ought" means in this context. But maybe also think a bit about the numerous ways in which markets may not produce prices that are optimal in an obviously definable sense: monopoly, oligopoly, monopsony, asymmetric information, complexity, collusion, etc etc. In my opinion, if Williamson's book doesn't acknowledge these complications and deal with them, his book is pretty much useless. Considerations of this kind are actually a large part of what led classical liberals to become modern liberals and left the ideological free-marketism for the libertarians and today's conservatives. I'm generally of the opinion that even the loveliest of philosophies is often smashed to pieces on the hard rocks of reality.

    And that brings up my real problem with a lot of your responses and source references. I don't care too much about the philosophical differences. But a lot of the factual information that you're getting is clearly incomplete, misleading or just incorrect. Maybe Williamson asserts that European national health services are a "disaster" but I would consider providing superior overall health outcomes at lower cost with universal coverage to be quite a success (I don't necessarily like all of the features, but it does seem to work well; and yes, I have been a beneficiary of a national health service). In any case, you should define what you want out of the system and go look at the empirical evidence to see you discern what structure might be better at obtaining that outcome. And no, there is not rationing in Obamacare. Although, I suppose you could define rationing to fit it into some of the aspects. There is the provision to create and oversight panel that has the power to make additional cost cutting recommendations in the case that the existing incentives are not working appropriately. Among the recommendations could be guidelines on covered procedures. The panel is actually forbidden to ration. If you think having a third party decide what health care procedures will be paid for is unacceptable, then you should equally object to private insurance (and private insurance does this with much higher overhead costs as well).

    If you want to get your philosophical guidance from the National Review, fine, but just remember that this is a group of people who deny the vast body of evidence of global climate change (any number of recent editorials), don't seem to accept how statistical methods can help us turn (even noisy) information into superior knowledge about our world (see Josh Jordan and Jonah Goldberg and their innumerate critique of Silver, Wang et al) and seem to fervently believe that the global economic crisis was caused by Fannie, Freddie and HUD. This is not a good source for factual information.

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  4. @nhi: Time to examine your investment in this conversation, I think.

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  5. Whoops, misspelled your name, nkh. Apologies.

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  6. No biggie. My name gets misspelled all the time.

    You may be correct. But considering that you got at least one dissenter to spend some serious time trying to engage with some of your sources, would you, at least on economic matters, be willing to give some other scholarship a go? I do stand by my criticisms of the NR's economic and scientific coverage.

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  7. @nkh: But you aren't giving me recommendations on other scholarship, just telling me everything I have been reading is wrong. I am fully aware of the perspective from which the authors at the National Review are writing--that is why I enjoy reading their articles. I know that there are controversies on all of the issues that you list, but I do not agree with your assessment of their position.

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  8. @FB: Hmmm... fair enough. Here are some of the economists I find helpful/interesting in no particular order: Samuelson (Paul, of course, not the columnist Robert) and Arrow (I'm not sure if either wrote any popular books but if they did, those would be worth reading), Hayek (I don't agree, but it's an interesting perspective and even he supported socialized medicine), Robert Shiller (Irrational Exuberance, e.g.), Simon Johnson and James Kwak's recent books, Bruce Bartlett (he has a book out now which sounds very interesting, but I haven't read it yet), Daniel Kahneman (with or without Tversky; his recent book if fascinating), and of course Keynes and Krugman (about whom I imagine you have some prejudices). If you're interested in the financial crisis, you really ought to read the commission report including the dissenting opinions. I haven't read any Friedman, but I really should. For more narrative books, I think Michael Lewis is often worth reading. Sometimes too focussed on the story, but usually thoughtful and informative as well as entertaining. Lowenstein has some good ones, too, especially 'When Genius Failed'. I admit these tend to take a financial economics perspective, but that's my professional interest. Currently, I'm working through Nate Silver's book (poorly edited, but very interesting), 'America's Unwritten Constitution' by Akhil Amar and China Mieville's 'Un Lun Dun' which has nothing to do with any of this, but is also highly recommended.

    That done, part of my point in criticizing NR on those issues is that there really isn't any controversy on them. They fabricate that by misrepresenting the best state of our knowledge. They may not like what the data say but that's not an excuse to misrepresent it even if it conflicts with their personal philosophies, theories or opinions. Not everything is a matter of opinion. I would ask you what you do in your work when new evidence conflicts with your current interpretation or narrative? On this, I think it's worth quoting Keynes. "When the information changes, I change my mind. What do you do, sir?"

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  9. @nkh: Thanks, this is very helpful! I have read some Tversky and Kahneman, and have Kahneman's Thinking, Fast and Slow already on my list. I have a better grasp on how to evaluate this kind of research than I do the economics aspect, thanks to the year I spent sitting in on psych courses during my first leave after getting tenure. I will have a look out for the other authors as my reading develops on financial matters.

    "I would ask you what you do in your work when new evidence conflicts with your current interpretation or narrative?" Assess the evidence, and change my mind--often radically, if the evidence is good. As I have only just recently on a question that is about as close to the bone as you can get for my own work: whether the Virgin Mary should in any way be understood as a goddess. I posted a link a few days ago to a review that I wrote on a collection of essays about the Mother of God in Byzantium. One of those essays--by Margaret Barker--has changed everything about the way in which I would now argue for the development of the cult of the Virgin. I am quite open to changing my mind, as my political reading this summer should likewise demonstrate. But the new evidence that I have on the political front has not taken me in the direction that your reading has, clearly.

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