Wednesday, April 22, 2009


What are we to make of President Obama? Is he a socialist? No. He is a believer is private ownership. Even when presented with the perfect excuse to nationalize the largest banks, he declined.

So Obama doesn't practice socialism. But he is not a follower of capitalism either. He has made that very clear. He plans to do away with the boom and bust cycles of open markets. His government has assumed control of banks, insurance companies and car makers. He has talked about putting limits on salaries and mandating benefits. He plans on taking over the energy, medical insurance and health care portions of the economy.

By the end of his first 100 days, Obama has appointed 20+ "czars" with wide but poorly-defined authority. That's a new czar every four or five days.

With much fanfare he signed a bill for increasing national service and encouraged all teenagers and seniors to participate.

In the meantime, in the name of safety, Congress outlawed all small-scale manufacturing of toys, children's clothing, and books (they all have to be tested for lead). They are now considering legislation that would outlaw small-scale food production including farmer's markets. Obama's EPA declared CO2 a pollutant which will give it jurisdiction over manufacturing, power generation, and transportation. The reach of government was already expanding during the Bush government and, along with spending, this trend has increased exponentially under Obama.

So what does all of this add up to? Something called Corporatism.

This grew out of the early 20th century progressive movement. The idea was that society would be divided into different interest groups or bodies (the Latin word for body, "corpus", is where Corporatism gets its name).

While obscure, Corporatism has influenced the left for a century or more.

One early and important theorist of corporatism was Adam Müller, an advisor to Prince Metternich in what is now eastern Germany and Austria. Müller propounded his views as an antidote to the twin dangers of the egalitarianism of the French Revolution and the laissez faire economics of Adam Smith. In Germany and elsewhere there was a distinct aversion among rulers to allow markets to function without direction or control by the state. The general culture heritage of Europe from the medieval era was opposed to individual self-interest and the free operation of markets. Markets and private property were acceptable only as long as social regulation took precedence over such sinfull motivations as greed.

Coupled with the anti-market sentiments of the medieval culture there was the notion that the rulers of the state had a vital role in promoting social justice. Thus corporatism was formulated as a system that emphasized the postive role of the state in guaranteeing social justice and suppressing the moral and social chaos of the population pursuing their own individual self-interests. And above all else, as a political economic philosophy corporatism was flexible. It could tolerate private enterprise within limits and justify major projects of the state. Corporatism has sometimes been labeled as a Third Way or a mixed economy, a synthesis of capitalism and socialism, but it is in fact a separate, distinctive political economic system.

Does this sound familiar? Think of the demand that car companies start producing smaller, earth-friendly cars. Or the massive stimulus bill. Or Obama's desire to replace air travel with high-speed trains. Just yesterday Senator Kennedy worried that companies with a profit motive might be allowed to participate in universal health care.

Corporatism is collectivist; it is a different version of collectivism than socialism but it is definitely collectivist. It places some importance on the fact that private property is not nationalized, but the control through regulation is just as real. It is de facto nationalization without being de jure nationalization.

Isn't this was was done with the banks? Obama did not nationalize them but he controls them down to executive salary.

New York Times Columnist David Brooks characterized Obama's long-term plans this way:

His view was clear. The market is dynamic and important, but it makes people reckless, parochial and dangerously shortsighted. The market needs adult supervision — a leadership class made up of people who appreciate the market but who also have committed themselves to public service, and who therefore take the long view and are more conscious of the public good.

None of this is new. FDR was a Corporatist although some of his programs were ruled unconstitutional and have been forgotten (look up his battles with the Supreme Court sometime). What is scary is who influenced FDR. During the 1920s and 1930s, several countries tried Corporatism under different names. The worrying part is that once this level of control is given over to the government, how easily it is abused.

The names of Corporatists includes:

Franklin Roosevelt
Miguel Primo de Rivera
Antonio Salazar
Getulio Vargas
Ioannis Metaxas
Francisco Franco
Juan Peron
Benito Mussolini
Adolph Hitler

So what does this add up to? A government with ever-expanding powers and control. One that is not responsive to the desires of the people (after all, they buy SUVs and set their thermostats to 72 degrees), but to the vision of the president and his appointees. This has never worked in the past but one recurring aspect of progressives is that they are sure that they are smarter than anyone else who ever lived and that this time they will succeed.

Note - Mussolini chose the Fasces as the symbol of his party. This is an axe with a handle made up of thin rods and symbolizes strength in unity. The United States has used this symbol to represent the states forming the nation. Mussolini used it to symbolize a collectivist movement and named his party fascists after it. His government was greatly admired by progressives including many in the Roosevelt administration. Fascism didn't get a bad name until after Hitler came to power.

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