“The question has been raised about whether or not our president is a socialist. I am sure there are some people here who believe it. But in the technical sense, in the economic definition of a what a socialist is, no, he’s not a socialist… He’s a corporatist. And unfortunately we have corporatists inside the Republican party and that means you take care of corporations and corporations take over and run the country.” – Ron Paul, in regards to charges of socialism leveled against president Obama
I have a sister who is a fair bit left of me, politically speaking. (I don’t think she’d mind me saying so.) And yet, we agree on a great number of issues; issues that often serve as dividing lines between “left” and “right”. Even if we disagree on the appropriate solution to a given problem, we often agree on the nature of right and wrong and where there is injustice … yet we have radically different world views. It’s interesting to see that even with such stark differences we don’t have too much trouble agreeing on right and wrong; for the most part.
We touched on the issue some yesterday with a discussion of Marx. What he saw as unjust – the productive workers keeping less and less of their productivity due to barriers to entry in the industrial workplace – is also something I find distasteful. We agree that something was amiss, but we disagree on the solution.
When I was in college I worked for a car washing service. (Stop me if you’ve heard this one before.) It was a simple job. We picked up cars from customers, drove them to a local gas station with a “spray & wash”, washed the cars (by hand), and returned them. At the time this ran about $20. I was making $9 an hour and was pleased to be able to produce revenues at about double my wage. That is, for every $9 I made, there was another $9 that went to the company (read “my boss”). At one point the boss told me that this was inadequate; that I needed to produce profits that were double my wage. Or, for each $9 I was paid for an hour’s worth of work, I should be generating $27 an hour or more in revenues.
My boss was no economist, and failed to see the absurdity of the proposition. All that was needed in that day to start your own car washing business was a bucket, sponge, and a client list. I could certainly have gotten a small business loan for the $5 I needed to buy the first two, and then, in short order, generated a client list sufficient to keep myself busy. There was near zero barrier to market entry. Then if I was able to generate $27 an hour in revenues I could keep it all for myself.
In his 2003 book The Mystery of Capital, Hernando de Soto touches on this issue, but in a much broader and more eloquent way. He describes how government regulation erects barriers to market entry that otherwise would not exist. These serve to keep out smaller (and very innovative) competitors.
These barriers serve as a mechanism to bolster control by the wealthy elites. Only a few large corporations can produce the “economies of scale” necessary to support an army of lawyers, accountants, and compliance officers needed to meet all regulatory demands. Small and innovative upstarts are left without a seat at the table. The elites have plenty of profit margin left over to bribe governments and maintain their necessary regulatory barriers.
What is perverse about the whole thing is that it is the progressive socialists, the ones who have sworn to bring about equality in the economic playing field, that are most effective at raising such barriers and promoting the very thing they presume to hate.
We noted a while back that socialism and freedom are antithetical. You cannot combine the systems and have any reasonable outcome because their mechanisms of feedback and control are utterly contradictory. In a free society, with a free market, you are held responsible for your own actions; you bear your own risks and reap your own rewards. Profit motive will induce you to take creative risks – and it will induce your competitors to do the same. In a socialist society risks and rewards are held in common. Incentive to create is found in fear of reprisal for failure to do so.
Marx held that “democracy is the road to socialism”. For a long time I thought he was right. Yet recent history shows that incremental “progress” toward socialism actually leads to greater corporatism and greater empowerment of the bourgeois class. It seems the progressives are the ones who have been duped. (Yes, there are those who support a larger strategy of progress toward collapse in order to induce violent revolution – but that’s too much to deal with here.)
So where does this leave us? Fair-minded individuals on both sides of the political divide will easily come to the conclusion that something is amiss. Economic control is aggregated by a few while the rest fight against a regulatory avalanche. Getting over the hump is, in my mind, a two-step process.
Those on the left who desire freedom must come to the conclusion that we will not regulate our way to social justice. Elected officials are far more interested in profiting themselves than defending the little guy and exacting retribution on their corporate masters. Less regulation and more freedom is what we must have.
Similarly, those on the right who oppose government-led attempts to intervene in economic freedom, must lay down their hopes of using the government to enforce a moral standard.
I suspect that once we get those two, we’ll have a big enough coalition to turn the ship. That which unites us is greater than that which divides us. Until then though, the bourgeois will clean up while we bicker.