I asked this very same question yesterday.
First, let’s take a moment to recall what Liberalism is. Classical Liberalism was the original ideology of the American Revolution. It emphasized human rationality, natural (inalienable) rights, free markets, individual property rights, civil liberties and constitutional limitations on government. It flourished in early America because there was no entrenched establishment based on inherited privilege, tradition or dogma.
In the 1960s, a resurgent liberalism attempted to extend the promise the promise of natural rights to those who were left out of the original deal (blacks, women, gays, and other minorities). And they were criticized by Conservatives for trying to go “too fast.” By the way, Classical Conservatism, in the tradition of Edmund Burke, sought to preserve social continuity by limiting the pace of social change—which was beginning to accelerate with the advent of modernity since the Industrial Revolution.
Modernity was, and is, the continuing the attempt revise and reorder every human institution according to rational principles—to introduce routinizing and rationalizing technologies wherever possible, and get human life “down to a science.” In the late 1960s, conservatives embraced modernity with a vengeance in the form of a kind of “let ’er rip” free-market capitalism, which Robert Heilbroner aptly called, “business radicalism.” This was condensed into “trickle down” economics which, of course, greatly enriched the rich but has resulted in stagnant or declining real (after inflation) wages for everyone else.
Here, unfettered free market forces tend to reduce human beings to a commodity: labor so that people are expected to relocate and adapt to the economy rather than the other way around, even if it means uprooting families from their traditional communities and relocating them elsewhere. Markets also transform the natural world into a commodity; i.e, Nature becomes “real estate,” posing problems of environmental degradation that make the problem of the commons pale by comparison. Human wealth also becomes commodified into the form of “capital” and technology. Liberals and Progressives have had to take on the role of trying to slow things down, so that people are not destroyed by capitalism’s winds of “creative destruction.”
Socialism, in its earliest sense, was one of the forces of modernity. Originally it meant the “alienation” or “spinning off” of economic functions that were traditionally done by the family, into “society” in such a way that this function could be rationalized by technology and divisions of labor in a wage labor economy. Care of the sick, for example, was spun off from the family to creates a medical profession, consisting of doctors, nurses, midwives and hospitals—and more recently, a whole scientific establishment, and a health insurance industry. Likewise, the making of clothes was spun out of the family into manufactured clothing industry and a retail trade. And, more recently, the preparation of food has been spun off from the family into a vast restaurant, fast-food and prepared food industry.
Some of these family functions, such as education, criminal justice, providing for people during their old age or during periods of unemployment are inherently unprofitable; so these functions have been socialized into the state. And, it is this latter aspect of socialism that has come down to us as the dominant meaning of “socialism” today among people who use the term in it’s precise economic and historical sense.
One of the consequences of modernity is that the family has been transformed from a unit of production to a unit of consumption. So, when you hear traditionalists rail against “socialism” or “liberalism” and the loss of “traditional family values,” what they are really complaining about is the modernity-driven socialism that has transformed the family into an engine of consumerism, and only incidentally about the functions the family falling into the hands of the state. Unfortunately, traditionalists tend to view things in rather individualistic, moralistic, and religious terms so, they tend to see the forward thrust of secularization, rationalization and the spinning off of the economic functions of the family in terms of the failings of individual moral character rather than systemic economic forces playing themselves out across history. For example, instead of viewing the “decline of the family” in terms of people moving away to new job markets, or the transformations of values and tastes engendered by consumerism, they tend to blame it on individual selfishness as expressed in dope, divorce, abortion, feminists, and gays. These, of course, are the effects of systemic changes, not their cause.
As we have seen, socialism has both a public and a private face. The fast food industry, of course, is organized for private profit; whereas, the public schools and social security are nonprofit ventures run for the benefit of the public by the state. Under Communism, there is no private sector; everything is socialized and run by the state for the benefit of the public, usually with poor results.
Under Democratic Socialism, as they have in Sweden, there is a private sector, organized for private profit, but that profit is heavily taxed in order to provide a kind of equality of lifestyle based on public benefits, with excellent results. Even our own “free market” system contains socialized sectors providing public education and social insurance and health care (Medicaid and Medicare), and they work very well. But the privatized part of our health care system, and attempts to privatize education, prisons, and warfare, have all turned into profiteering boondoggles that are at least as inefficient in their way as the Communist’s attempt to socialize manufacturing and service industries.
Since people are currently tossing the term “Nazi” around without much regard to it’s actual meaning, let’s consider what that means: National socialism, the economic program of the Nazis, was something altogether different that Democratic Socialism. Here, the object of socialism is not the welfare of the individual, as it is under Liberalism, Democratic Socialism, and Communism, but the welfare of the State—in particular, the militarized State and the corporations that profit from this militarization. In other words, the whole society and all its institutions are being rationalized and streamlined for the waging of war. And because National Socialism puts the welfare of the state and its corporations before the welfare of the individual, it is not shy about purging itself of “useless” citizens, “decadent” ideologies, criminals, deviants, the racially “inferior” or anyone else it for whom it can find no rational use.
When a society commits itself to total war mentality like this, there is no room for dissent. Criticism, dissent and even “lack of enthusiasm” become treason. The Nazis purged leftists and trade unionists because they were Democratic Socialists who wanted the state to work “by the people, for all the people.” The National Socialists despised democracy, and were intent on building a two-tier society consisting of Pure Aryans, who would be the Master Race, while everyone else would be enslaved and eventually liquidated when they needed the room. The Nazis didn’t build the autobahns and the Volkswagen for “the masses,” they built them in preparation for war. They also paid for these projects with slave labor and the liquidated assets of the Jews, and others they purged.
As you will recall, capitalism collapsed in the 1920s, and it nearly collapsed in 2008 (and it might yet still collapse). The New Deal Liberalism of FDR was based on a Socialist critique of Capitalism—and that critique is still valid today as it was then. Capitalism has inherent structural weaknesses:
1. Market societies are inherently prone to boom and bust cycles;
2. Market societies are inherently prone to oligopoly and monopoly;
3. Capitalists can not be trusted to voluntarily regulate themselves, so market societies tend are inherently prone to pervasive gaming and organized crime;
4. The unrestrained rapacity of capitalists leads to a form of class warfare in which the rich get richer and the poor get poorer until the rich disenfranchise the poor.
5. Once the rich consolidate their power in the form of a Corporate State, they tend to instigate wars for profit.
6. This leads to environmental degradation, displaced populations, epidemic disease, widespread poverty and a collapse back into third-world conditions.
FDR’s reforms were an attempt to save Capitalism from itself. Regulatory agencies helped clean up the cesspools of graft and corruption that were pervasive at the time; trust busting made sure that the rich didn’t dominate the economy; interest group politics made sure that everyone got a seat at the political table. The separation of banking and securities investment ensured that capital markets were insulated from speculative bubbles. The FDIC socialized the risks of bank failure, greatly strengthening the system. Make work projects put people back to work. Social Security gave people some measure of pension security.
Since then, those structural reforms have been gradually undermined, leading us back to an unregulated financial sector engaging in speculative bubbles characterized by boom and bust. So far, Obama’s reforms have been tepid compared to FDRs, insofar as they seek only to patch up the failing bank and credit systems, rather than fundamentally alter the power relationships between creditor and debtor, producer and consumer, and employer and worker. Obama’s credit “reform” restrains the credit card industry from engaging in certain predatory practices, but it still allows them to charge upwards of 30% interest.
One exception is health care. This involves one-sixth of the economy, and it is absolutely corrupt with waste fraud and abuse. The higher you go in the industry, the more it is like organized crime. None of the proposals on the table have anything to do with the government taking over any hospitals, HMOs, drug companies, or setting up a planned economy that will set prices and allocate services, or anything like that. The proposal is simply to let the government lay down some ground rules prohibiting insurance companies from denying people coverage for pre-existing conditions, requiring prior authorizations for every little thing (which are often automatically denied), denying people coverage because they inadvertently failed to disclose some unrelated thing, or pressuring people into high deductible plans, or plans with inadequate coverage.
The other thing it proposes to do is to organize an insurance pool that will compete with private insurance plans. The government has economies of scale and other advantages that allow them to do this very cheaply. This is the so-called public option. And it is absolutely necessary to have private insurers compete against it, since otherwise there is no incentive to wring any of the waste, fraud, and abuse out of the current system. So, you see, the proposal is to let the markets do the work of reforming the system, which the health insurance industry is opposed to, since they’ve got most state markets sewn up with just a couple of insurers and there isn’t much meaningful competition at all. Also, much of the profit in the for-profit system is actually due to waste, fraud and abuse, since the money ends up in private pockets rather than in actual medical services.
Sorry for the length, but that should set the record straight about what Socialism is and isn’t.
Composing members:
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Composing members:
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