Capitalism, Socialism, and Property
MINT-AND-CORN COUNTRY, INDIANA — I must confess something: I am a fraud. For all the paeans I offer to the idea of “community”, I have never read Nisbet’s The Quest for Community. Downright shameful, I know. (Other than a short essay or two, I’ve read nothing of Kirk other than The Conservative Mind, either; I can count eight of his books perched high above me, though, waiting their turns.) Well, finally, I’m remedying this. Having just today finished Notre Dame’s (Thank you, God, for that miraculous overtime victory!) own Phil Bess’ phenomenal Till We Have Built Jerusalem: Architecture, Urbanism, and the Sacred, I, upon the suggestion of a very sagacious young lady, thought that nothing could better pick up on the broadly communitarian themes of Bess’ work than Quest. In his preface to the Nineteen-seventy printing of the book, Nisbet writes,
Closely related [to physical place and nature] is alienation from things. Here I mean property, hard property, the kind that one can touch, be identified with, become ennobled or debased by, be driven to defend against attack. One remember the use Galsworthy made of property in The Forsyte Saga. And Schumpeter warned us that the transition from capitalism to socialism would not even be noticed by a population whose idea of property is not hard property but soft property — shares and equities in something distant, personally unmanaged, and impersonal.
[My emphasis. — NPO]
Notwithstanding my contention that our government has tended historically, and still does presently, more toward fascism than toward its equally vile sister, socialism (the both of which, as William P. often asserts, are functionally the same, anyway), are not this three-decades-old reminder and Schumpeter’s even older warning regrettably prescient? An angry grassroots Right rightly protests the current Administration’s and Congress’ grand vision for health-care reform and tendencies toward taxation and totalitarianism, but this movement should have been nascent at least seven years ago, if not twenty-seven, when Ronald Reagan spoke the language of fiscal prudence — and, as William A. Schambra, in his Nineteen-ninety foreword to Quest notes, community and Tocquevillean intermediate associations — while spending our way out of the Cold War and perpetually invigorating the notion of the “national community” against which Nisbet rails (despite Schambra’s assertions to the contrary).
Whether we call it “socialism”, “fascism”, “corporate capitalism”, “state socialism”, or anything else, it has been regnant not merely under FDR, LBJ, and now the Cosmopolite, but just the same under “business-friendly” Republicans (and neoliberal Bill Clinton), whose collective support of a fantastical free-market economy probably better perpetuated the slow, steady slide into socialism than any of the grand-scheme welfare programs foisted upon us by the more openly collectivist chief executives of the nation. During the Eighties, we were nudging closer and closer to the all-encompassing state, but were all too high on soaring stock prices (and powdery stimulants) to realize it.
Wholly agreed on the fact that whatever we call the long-term trends in political economy, they are advanced under both political parties in equal quantity (if not always quality).
The only issue in getting labels right is so that we maintain an honest assessment of what is happening. If we were facing socialism/communism, then how does it differ from the New Deal? How does the New Deal differ from what occurred in West Europe 1945-70? How does that differ from the Soviet Union? Wasn’t there more State intervention in the market (if fewer small business regulations) in the 50s than today? There is a lot of intellectual dishonesty when the ‘s’ word is employed.
As concerns fascism, there are really two fascisms. There is the propagated fascist ideology, intellectually vibrant in the 20s and early 30s, which made many of the same musings about the importance of monetary policy and protectionism, and general opposition to international financiers, that we hear on the Old Right today. Then there is fascism in practice, which is much closer to the Comintern analysis, basically an authoritarian state capitalism where thugs with revolutionary rhetoric restrict the market in favour of certain for-profit, private corporations, and wreak havoc on the workers and consumers.
The latter definition is what we are heading towards, and what we see, for example, in health care…a trend which will only strengthen under (non-public) Obamacare (David Lindsay, I often defend you, but I hope you are reading this). The State won’t protect heavy industry, but it does protect Big Pharma, and drives up the price of medicines. It encouraged the creation of the HMO system and has various health care schemes that guarantee public spending at inflated market prices. The Republicans claim this is no problem and let the corruption fester. The Democrats try to reform the system but all reforms are hijacked by its elitist leadership who only manage to turn the regulations into further HMO-protecting measures.
The end result is that there is never a passable proposition that will bring costs down. All talk of cost control involves the restriction of services; classic fascism in practice, the protection of a cartel by the State with the goal of increasing prices via artificial scarcity.
This is the grounds for cooperation between libertarians, paleoconservatives, the far right, and true socialists.
Liberty and private property are inseparable. Dispossession of ones own, rightfully acquired possessions is the beginning of the end for a society.
Or, as John Adams succinctly put it, “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is no force of law and public justice to protect it, anarchy and tyranny commence. Property must be secured or liberty cannot exist.”
I am not sure I can agree with Schumpeter’s formulation. Assuming you have a functional justice system to enforce contract law, there is nothing soft about shares of a company. Just ask anyone who own 50% of a business whether they believe it to be “distant” and “impersonal.”
Fascism and socialism are basically two names for central control of an economy. What difference does it make what apologia schema my masters are following – whether it be the Marxist utopia of Stalin or the Marxist utopia of Hitler – when I still have little to no control over my life or property. Of course there are nuanced differences, but the ideal of the collective over the individual resonates powerfully through both, and that understanding should suffice for any non-scholarly discussion.
William, I’ve not actually read — only very briefly skimmed and read about — Schumpeter, so I’m not going to try to defend him vigorously or to concede to you wholly.
I think that you’re right as you frame the situation, but I think that a significant difference exists between a fifty-percent owner in a company — who likely holds significant voting privileges as well as enjoying the benefits (and losses) associated with holding that many shares — and someone who owns even a few hundred shares in a publicly traded company with thousands and thousands of shareholders who have no real attachment to, control over, or “feeling” for the corporation.
Otherwise, I think I’ve found at least a second comment from you with which I find myself broadly agreeing!
“I think that you’re right as you frame the situation, but I think that a significant difference exists between a fifty-percent owner in a company — who likely holds significant voting privileges as well as enjoying the benefits (and losses) associated with holding that many shares — and someone who owns even a few hundred shares in a publicly traded company with thousands and thousands of shareholders who have no real attachment to, control over, or “feeling” for the corporation.”
Sometimes I get ahead of myself; I did not make the connection explicit.
Assuming you have a functional justice system, there is no reason why 50% ownership does not have the same property rights as 1% or 0.0001% ownership rights. Obviously someone who possesses 1% of the company cannot liquidate its assets or issue new shares, for instance (whereas 50% + 1 can), but shareholders are entitled to just compensation by virtue of contract.
The further future oriented production gets, the more complex the (interconnected) the capital structure. A large corporation is needed to coordinate large scale, year or decade long production cycles. A necessary consequence – a consequence many may find unfortunate – is the further removal of the end-user, i.e., “community,” from the decision makers. I would go so far as to generalize that the more advanced a society becomes, the more removed higher order production gets from the consumer. Consider it a caveat of modern living.
I don’t claim extensive familiarity with Schumpeter (he was a wonderful writer and brilliant historian), though I would surmise the comment was more of an aside rather than a thesis.
No, fascism and socialism are not simply two terms for state control of the economy.
Fascist theory involves a restructuring of the political economy via corpratism (sometimes dubbed “corporativism”), whereby economic planning takes place with input from all the various parties involved in economic production. Thus, in fascist Italy and also in Salazarist Portugal, parliamentary seats were allocated by economic sector. Theoretically, labour and capital are supposed to have equal say in planning. The State takes over the banks and provides low-interest loans for production. Property itself is still private. This is different from socialism where the State is the only real capitalist.
In fascist praxis, major industrial and financial capitalists allied with the dictatorship and were partly responsible for installing the fascists in power. Thus, typically repressive measures were taken against unions (bans on private unions, forced membership in state-backed labour cartels), while relatively few controls were placed on business.
Claiming that fascism and socialism are the same or that fascism is Marxist or that all use of State power is the same because it is all “Statist” (so are anarchocommunism and anarcholibertarianism the same ideology?) is politically immature and unhelpful.
One could use the government to ban having children, ban homosexuality, ban usury, and/or build debtors’ prisons, but it is not qualitatively the same thing!
Thomas, you’re talking with someone who actually understands economics back to its epistemological roots. You can press me on this point, and I assure you that I will not lose the argument.
I stand by my initial claim, and would point anyone interested to The Vampire Economy by Guether Reimann. The Nazi economy was in many ways identical to Soviet Russia’s: planning boards, 5 year plans, party domination of economic affairs… and the same miserable failures occurred in both.
<>
—You always sound so insecure.
<>
—Almost every European country had these until the 70s. Does that make their economies QUALITATIVELY THE SAME as fascism or Soviet socialism?
<>
—This was not nearly on the same level in fascism as socialism. In fact, being a party member in one of the major parties of the modern USA or Austria or Greece or Russia could bring similar benefits to being a party member of the one and only party in fascism. The party did not directly administer the economy, but it did have a revolving door of positions with the financial and industrial elite.
Also, it is stupidity to deny the purely economic successes of planning models and of fascism in its time. There is a reason economic liberalism almost died in the 20s-30s and it was due to no conspiracy of men. But once our money supply began being dominated by old friends of Ayn Rand, hardly socialist planners, derivatives speculation and debt slavery sank our economy.
You have no solution for this.
Insecure? Uh, excuse my frustration for continually engaging in exchanges with hapless ignoramuses! Perhaps I’m the foolish one for thinking that reason and exposition can change minds. It has done little good thus far, and I’m beginning to think it’s all in vain.
No, of course all examples of central economic control are not comparable to Hitler’s rule. On top of being an autocrat, he was a sociopath with genocidal intentions.
As for the successes of Fascism, if you consider huge monuments and armies of hundreds of thousands the outcome of successful economic policy, I suppose I can’t argue this point. On the other hand, if you consider general welfare (in the sense of comfortable living) of the population the goal of economy, I think you’ll find that the citizens under Fascism and Socialism back in the 20s and 30s were quite poor, repressed, and merely viewed as cogs in the grand State economic/war machine.
Greenspan was a friend of Rand, and? He repudiated her teaching when he took office. I’m no Randian, but she was clearly correct in her strong opinions regarding laissez-faire and communism.