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Socialism Gaining Ground in America

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Rasmussen just released the results of a recent poll on political attitudes. It found only 53% clearly preferred capitalism (hat tip reader David H):

Only 53% of American adults believe capitalism is better than socialism.

The latest Rasmussen Reports national telephone survey found that 20% disagree and say socialism is better. Twenty-seven percent (27%) are not sure which is better.

Adults under 30 are essentially evenly divided: 37% prefer capitalism, 33% socialism, and 30% are undecided. Thirty-somethings are a bit more supportive of the free-enterprise approach with 49% for capitalism and 26% for socialism. Adults over 40 strongly favor capitalism, and just 13% of those older Americans believe socialism is better.

Investors by a 5-to-1 margin choose capitalism. As for those who do not invest, 40% say capitalism is better while 25% prefer socialism.

Yves here, Not surprising results break along income lines (investing being a rough proxy for income). Back to the article:

There is a partisan gap as well. Republicans – by an 11-to-1 margin – favor capitalism. Democrats are much more closely divided: Just 39% say capitalism is better while 30% prefer socialism. As for those not affiliated with either major political party, 48% say capitalism is best, and 21% opt for socialism…

It is interesting to compare the new results to an earlier survey in which 70% of Americans prefer a free-market economy. The fact that a “free-market economy” attracts substantially more support than “capitalism” may suggest some skepticism about whether capitalism in the United States today relies on free markets.

Yves again. The phrase “free markets” should be banned. It is a slippery, ill defined concept, and perversely conflates “freedom” (lack of restrictions) with “markets” which rely on laws (even Friedman would grant that) and exchange. A market with no rules is a brawl (think of drug dealers, who operate outside the law. deal in often adulterated goods, and contracts are often enforced via violence). It is a brilliant bit of Newspeak. Back to the article:

Other survey data supports that notion. Rather than seeing large corporations as committed to free markets, two-out-of-three Americans believe that big government and big business often work together in ways that hurt consumers and investors.

Yves here. See, everyone fell for the advertising. “Free markets” means the advantages accrue to the big and powerful, but its promoters managed to sell it to libertarians, who somehow bought that this construct would help the little guy. Sorry, you were had. To the story again:

Fifteen percent (15%) of Americans say they prefer a government-managed economy, similar to the 20% support for socialism. Just 14% believe the federal government would do a better job running auto companies, and even fewer believe government would do a better job running financial firms.

Yves again. Rasmussen is conservative, and I’d like to see how those questions were phrased. I bet if you posed the real choice, do you favor continued cash infusions to weak and maybe failing financial firms to a government receivership and restructuring, I bet you’d see over 50% approval.

Nevertheless, the leaning away from capitalism in the survey is not a strong endorsement of socialism (Americans are too wedded to the promise of upward mobility). It is revulsion against capitalism turned Mussolini style corpocracy, Given a choice between capitalism of that form and anything else, they’ll gamble on the alternative.

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107 comments

  1. Anonymous

    Hi Yves, I’m not sure why Friedman is your gold standard for free market ideology. The guy was essentially a socialist on the area he covered – monetary economics. Perhaps it’s because of his series Free to Choose and the accessibility of his books. On the other hand Von Mises was the principled laissez faire free-marketeer. But his Opus, Human Action is a much more difficult read, so very few bother (I mean, which economists devote even a modicum of consideration to the epistemological basis of their “science”?)

    “free market” is easily defined: It’s the absence of aggressive coercion of any market participants. It’s freedom of action circumscribed by the rule of law. And “rule of law” should not be confused with arbitrary edicts that are issued by the State.

  2. alex black

    If the pollsters administered truth serum before asking the question, 98% of the respondents would have admitted they weren’t paying attention on the day socialism and capitalism were explained in high school, and they honestly have no opinion, except for who they’re pulling on American Idol.

  3. Daniel

    I think this is ridiculous.

    Why not ask those that have lived under a socialist state to see whether they prefer socialism to capitalism?

    Americans don’t know what they’re giving up.

    Why do the masses want come to America? Obviously because their socialist run countries were so wonderful.

  4. Leo Kolivakis

    Dear Yves,

    People should ask “free market” for whom? For the prosperous few or the restless many?

    By the way, here is my favorite quote on “trickle down” economics:

    “If you feed enough oats to the horse, some will pass through to feed the sparrows.”

    — John Kenneth Galbraith

  5. IF

    While I believe the US has its peciluar form of socialism (favoring home owners and bankers), I doubt many Americans know what socialism is. A rather ill defined question, after all. At the current stage socialism is an utopia, colored by the individual. For this reason it might still make sense to measure left leaning tendencies. Is a redistribution from the rich to the poor via taxation already socialism? How about middle class to the poor – Peronism?

    The ruling class wants to continue on its path given by Reagan. I think they will only be able to do so if they can deliver the goods, e.g. prosperity; or if they use authoritarian measures. Prosperity seems unlikely at this point. But there is not enough pain in the US to cause radicalism. At least I don’t see it.

    Now that the powers are measuring left leaning tendencies, how are they going to influence them?

  6. Anonymous

    Who ‘sold libertarians on a “free market”‘? This seems like a oxymoron.

    I do agree with Anonymous above who clearly defines a “free market”. Though the term “free market” has been used lately to sell the warfare/welfare state and promote a crony form of capitalism a la George W. I do think classical liberalism still holds some weight as a school of thought.

  7. Leo Kolivakis

    By the way, I forgot another famous quote:

    “Under capitalism, man exploits man. Under communism, it’s just the opposite.”

    — John Kenneth Galbraith

  8. SocialismSucks

    Any society that lacks the willpower to severely punish criminal banksters on a regular and ongoing basis opens itself up to Marxist "solutions".

    Thieving bankers, if lucky, used to be tarred & feathered, then run out of town on a rail in America. That is required in order to sustain civilization.

    Socialism is what fills the vacuum after a failure to do the right thing in the first place.

  9. Anonymous

    The one thing I’ve never understood is why the libertarian crowd never seems to understand that a sufficiently powerful private aggregation of power could just buy the government. Empirically, that’s just what happens. I understand that folks like David Friedman call themselves minarchists– my question has always been, exactly where has that worked?

    To paraphrase Jack Nicholson in the Departed: When the boot is on your throat, does it really matter if it is owned by the state or by a PMC hired by an oligarch?

  10. Richard Kline

    Quelle surprise! Democratic Party voters are, at heart, democratic socialists. It’s an unrequited love since those who run the party are entirely bought and sold in the market place. Republicans believe, so far as I can tell, that property takes the man; ergo, they can never, never sup with ‘social solutions.’ The category of ‘independent voters’ in the US is rigged, and typically for the purposes of conservative leaning voters. It is designed to leave no box to check for radicals but to maul them into a box with libertarian leaning types of completely different persuasion. (This is the media goal in the US amongst other things, to ‘disappear’ solutions and partisans of the leftward 45% of policy possibility from the discussion space.) And yes, I would love to see how these questions are phrased, and of whom they’re asked as one can bet they are never neutral or slanted toward non-capitalist outcomes, and hence the numbers we see are likely to undershoot sentiment rather than overshoot it.

    Diffuse libertarianism admittedly has a long and close association with the many of the founding populations of American political society; it’s not a new concept but one that long preceded the European colonization of the continent. Those folks don’t favor communitarian solutions per se, so ‘socialism’ isn’t what they’re in this thing for. —And every time they get it wrong! Amazing, just amazing, it’s the creed that keeps on failing. Every boom they think the little guy will get his, and if by that they mean get it in the neck they’re always right. Big capital makes patsies of ‘small government’ types all day and every night.

    The US is never going to become socialist. But it could well become democratic socialist, and end up liking the result very well indeed. I’m not quite pulling an oar toward that shore. Statist solutions and electoral politics are never to be trusted with important things like your kids, your money, or yer grandpappy’s moonshine recipie. But democratic socialism is the next best thing to being there, so . . . .

  11. IF

    Hey Leo,

    lets not confuse communism and socialism. I don’t even know what communism is. Something in a commune? On an island? In Cambodia?

    Of course, in the US all the labels are shifted. A liberal is a socialist. A libertarian is wicked. France is socialist and Russia communist? Very confusing.

  12. Anonymous

    With Republicans calling everything objectively that looks like a solution “socialism”, it’s no wonder it’s gaining ground.

  13. Marlowe

    In 1973 I conducted a man-on-the-street survey with video, asking people “What is capitalism?” About half said they didn’t know and another 35% gave some pretty off the wall explanations (dictatorship, something you hear about overseas, controlling everybody). Only 15% said anything about free markets, competition.

  14. jbmoore

    If I have to give hard earned dollars as a gift to help a fellow human being out of financial trouble, I’d rather give to someone who is poor, middle class, or formerly middle class than an affluent wealthy businessman or institution that was too big to fail, yet somehow did. I am not sure when corporations coopted government, but this corporate welfare whether it be PPIP or bloated defense contracts must stop. The government can continue to say one thing and do another, but sooner of later the suffering of the homless and hungry mobs will force the government which is an extension of society to recognize its original constituents, or face its own demise if it loses legitimacy in the eyes of the people. Either society will choose a hybrid system that has regulated capitalist markets with social programs that give citizens financial and health safety nets during bad times, or society will become fragmented along the haves and have-nots. The latter will lead to chaos.

  15. K Ackermann

    free market” is easily defined: It’s the absence of aggressive coercion of any market participants

    Oh, thank you for that one. I’m still drying my eyes from laughing.

    And to think the IMF actually claims to be promoting “free market” principles when it witholds the aid it is mandated to offer countries in crisis unless they take actions which often lead to the destruction of social safety nets at exactly the worst time to do so.

    Anything that impedes the transfer of wealth out of that country has to go in the name of the free market.

    The massive increase in domestic surveilance, fueled by taxpayer funds that flow into the new Department of Homeland Security and out to no-bid contractors who just took off their civil servant hat and walked through the string-bead doorway to their shiny new civilian company shaped like a mouth on a tit.

    The free market at its finest. It’s a secret that the public is being surveiled, and there is no legal avenue for the public to know how much it takes place, but rest assured, most of these companies fail to deliver anything that works well, so they simply have to keep trying harder with new no-bid contracts. The public simply has no choice in the matter of supporting it all.

  16. Anonymous

    communism is state controll dot dot, you name it they run it and you both ‘share’… socialism is where ‘average’ people cant make it without a hand out, so you get all that you can because you absolutely need it. Under socialism the mobility and wealth gap between rich and poor is much wider that it would seem because it encourages massive systemic waste ‘get all the cheap service you can’ and the tax burdens to support the monolithic deciept of equality… capitolism is at its core NO SUBSIDIES, SMALL GOVERNMENT, INDIVIDUAL CHOICE, prices and labor pools adjust ‘sometimes violently’ to create the greatest opportunity for the market which is a reality of wants, trade, and wealth… all systems are a product of an imperfect world, only capitolism in my view is the most honest and encouraging to great ideas ‘and believe it or not that means equality and accessibility’… my great concern is centralized socialist government co-oping a leaderless media of priest poets with the freedom to not fathom

  17. Joseph

    Yippie, about bloody time

    I strongly advise people to read “Spirit Level – why equal societies almost always do better”. The main conclusions, supported by empirical evidence are:

    Egalitarian societies are happier, healthier, less anxious, longer lived, less environmentally destructive and have more fun in bed.

    Capitalism is structurally incapable of moving from a society based on consumption to one based on sustainable stewardship.

    The economic crisis is the disaster we needed to begin making the changes that are required to avoid environmental catastrophe, like Rosa Luxembourg wrote the choice we face is “socialism or barbarism”

  18. Anonymous

    Richard,
    One of the issues is that more than a few of the European socialist governments are still monarchies, while the United States is a republic. Sweden, Denmark, Norway and the Netherlands, for example, all still retain a royal head of state.

    This is important because, as I see it, Americans will not bend to a socialist state that is the sole source of power. Contrast this with the European socialist constitutional monarchies– the monarchs no longer rule, however, the state runs things in their name. The King/Queen is still the sovereign.

    In the United States this is not the case. Once we split from Great Britain, the sovereign became the American people. This is reflected very clearly in criminal prosecutions, where cases are referred to as “The People vs XXXX.”

    Thus, for any socialist/collectivist principles to be accepted in the USA, it would have to be framed as the American people as a group, choosing to band together to protect and enrich ourselves. This is distinct from the more paternalistic European tradition, which is encoded in the European legal system.

    In fact, there is an American basis for this kind of thinking– the concept of the commonwealth. One might argue that this concept existed from the very beginning of the US; however, at that time “the people” necessarily excluded women and non-whites. Certainly that is not acceptable today. Proof that the early Americans were thinking about the common good can be seen in the formal name of Virginia– “the Commonwealth of Virginia.”

    Perhaps the American take on a collectivist politics for the common good could be called “socialism with American characteristics.”

  19. Russ

    I agree that polls like this are almost always tendentious and rationally worthless, unless there’s a stable, meaningful definition of terms like “capitalism” and “socialism”.

    1. Most Americans have little idea what these terms are supposed to mean, but just experience them in a pavlovian emotional stimulus-response way.
    2. Most Americans have little idea how either term relates to what we actually have in America, where the best term would be corporatism or neo-feudalism.

    Leo correctly emphasized that any term like “free market” or “free trade” or “the economy” is a terminological lie until you first ask, cui bono?

    Unfortunately Americans are indoctrinated into denial regarding the facts of class struggle. Like Yves said, Americans are brainwashed into the theology of “upward mobility”.

    Historically that’s the socioeconomic base for fascism: those who are in fact downwardly mobile but who cling to the upwardly-mobile middle-class religion, who regard any kind of proletarian consciousness with fear and loathing, and who must exist in a state of cognitive dissonance in order to maintain their self-image in the face of the facts. (This is part of the answer to Frank’s question What’s the Matter With Kansas?)

    As long as we’re seeking terminological precision, I must dissent from Yves’ taking up the street definition of “freedom” as the absence of rules. The great philosophers have never defined it that way. In Nietzsche’s characterisic formulation, true freedom is where, through the right combination of internal drives (rules) and “rules” imposed by the environment, you find the habitat where you can most fully realize your potential, feeling the greatest inner freedom, which is close to a feeling of necessity.

    The modern gutter political concept of freedom, defined as consumer freedom and reckless individual pseudo-”rights”, is more like “license”, “promiscuity”.

    Anon 1:19 AM said:
    “free market” is easily defined: It’s the absence of aggressive coercion of any market participants.

    Yes, the aggressive coercion is all externalized against the non-voluntary participants and the environment.

    I would turn this around and be counter-aggressive vs. the aggressors.

  20. B. Mull

    Interesting that 33% favor socialism. But another study found only 32% support an estate tax. 31% expect to become wealthy one day.
    And 56% want a flat or regressive income tax.

    It’s almost as if Americans don’t know what they’re talking about. Hmm, I wonder if Wall Street realized that and that’s why…

  21. Mikey

    We’re already socialist… The primary beneficiary is the government… more power to it… Nothing you can do about it. Here’s a list of the largest employers in Los Angeles:

    Largest employers Number of employees
    Los Angeles County 93,354
    Los Angeles Unified School District 78,085
    U.S. Government 56,100
    University of California 36,354
    City of Los Angeles 35,895
    State of California (noneducation) 32,300
    Kaiser Permanente 27,635
    The Boeing Company 23,468
    Ralph’s Grocery Co. 17,211

    Source: http://www.city-data.com/us-cities/The-West/Los-Angeles-Economy.html

    The top 6 are the government. Kaiser is a hospital; a beneficiary of government. Boeing for Los Angeles is mostly defense work, also a government beneficiary. Ralph’s is a supermarket chain.

    What a basket case.

  22. Richard Kline

    And in an aside over with CalculatedRisk we now see that the putative ‘stress tests’ of selected American banks the results _won’t even be released_! This is an exercise so phony it recalls the film about the faked Moon flight. Beyond a total sham into the kinds of public manipulation exercises once typical in the Totalistans we used to deride.

    American’s, once supposedly can do; now, canned faux.

  23. Yves Smith

    Since it’s a long weekend, I strongly suggest those of you who haven’t seen it to go to Google Video and watch the four part BBC series, The Century of the Self. It discusses, among other things, the rise of liberarianism. Hint: it wasn’t as organic as its adherents like to think.

    Part 1

    Part 2

    Part 3

    Part 4

    And I hate to tell you, small government is not a viable construct in modern industrial/post industrial society. The scale and scope of commercial activity is too large and complex for that to be a viable model.

  24. Richard Kline

    So jbmoore: “I am not sure when corporations coopted government . . . .” If you were John Barrington Moore speaking, you could educate us all here, but since it would appear not, here’s something to chew on: In democracies, great wealth and a powerful state typically _grow each other_. Now, we don’t see it that way in the US because we stress the numerous purportedly self-made men. And in the US this is indeed a bit more possible then elsewhere. However, the state is always the buyer of greatest resource, and frequently of last resort. State contracts and speculation in government debt is always intrinsic to the growth and maintenance of the wealth class. Other opportunities wax and wane, but the state is always taxing. A contract to suppply X to the government was often the ace in the hole for many the malefactor of great wealth because when other plays turn sour Uncle Sugar is always buying still. In the US, the Guvmint controlled land sales furthermore, something now erased from political memory. The great fortunes of the 19th century were largely created as a function of preferential access to land sales and the credit volumes resulting. The point I am making is that corporations in democracy have a deeply symbiotic relationship with a strong central state, not least in the creation of a ‘regulatory’ framework which favors certain and existing stakeholders. Of course we n-e-v-e-r hear about this in American political discourse, but that’s another story.

  25. Anonymous

    “With Republicans calling everything objectively that looks like a solution “socialism”, it’s no wonder it’s gaining ground.”

    Best comment yet. Don’t tell them, give them enough rope to hang themselves. Then we have to get the other half. They should be much easier, they are all stoned and on welfare, much slower.

  26. Yves Smith

    Anon of 2:28 AM,

    Australia is also de facto social democratic, and while they are technically a constitutional monarchy (they haven’t officially cut their ties with the Queen), they don’t have any of the royalty/nobility baggage that the UK or the Continent has.

  27. ndk

    It pains me to write this, but anyone who seeks out a truly capitalistic society shouldn’t be searching in the Western world, and particularly not in America. Our lemon socialism is the husk of an eviscerated capitalistic system. The efforts of the Obama administration to resuscitate the economy almost exclusively through wealth effects, consumer borrowing, and government spending evidence the transition.

    OTOH, I, and my Chinese friends, believe China itself is intensely capitalistic.

    There is a very small established oligarchy; precious little “old money” is in the country at all. Most of the wealthy are self-made, at least within a generation or two. Tremendous benefits accrue to the successful. Not only do they receive monetary gains, status gains, and vast improvements in their quality of life, but they also garnish the right to the world, through international travel. Travel visas are extraordinarily difficult for ordinary Chinese to acquire.

    There are very few safety nets to catch the losers. The disabled and orphaned are sometimes forcibly employed by criminals, able to profit from their begging. The impoverished live humble, quiet lives, mostly sufficiently fed and clothed, but without much more.

    There’s some pilfering around the edges by those with political or personal connections. It tends to be very absurd and egregious, but of limited magnitude. It’s nothing compared to what I’ve witnessed in Japan or America, though I have less direct experience with Europe.

    I don’t think China will remain this way in the fullness of time. But for a land where the successful are rewarded and the failures are punished, today, for my money, you couldn’t do better on this Earth than the Middle Kingdom.

  28. Anonymous

    And I hate to tell you, small government is not a viable construct in modern industrial/post industrial society. The scale and scope of commercial activity is too large and complex for that to be a viable model.

    But Yves, that’s when limited government is most viable… and necessary.

    As noted by Hayek and Mises, the more complex a society the less likely that political decision-makers can make competent decisions. Simulataneously, the more likely that their incompetence will have ill effects on large numbers of people.

    Better to allow individuals the freedom to make decisions on their own. Competent individuals will reap rewards, whereas incompetent individuals will suffer consequences.

    Your view allows political decision-makers, through their incompetent decision-making, to destroy the lives and property of hundreds of millions of people.

  29. Anonymous

    Building codes, crash safety, pubic water, roads….

    How does the average consumer make a reasonable decision on these things?

    How can someone who does not believe it should exist enter an argument about government?

    It is like a jew telling a gentile how to cook a ham. Thanks, but no thanks.

  30. Yves Smith

    Anon of 3:39 AM,

    No, I believe in balance of power, which unfortunately is impossible in the US thanks to the fact that we permit paid political advertising on TV (as LeeAnn pointed out), which in turn means that the amount of costly TV advertising correlates strongly with election success, which creates the need for big election warchests, which makes it eminently possible for big corp interests to buy government.

    If we do not exercise some control over private interests, they can assume every bit as much power over our lives as government and we have no way to claw it back. We’ve been fighting that battle since Teddy Roosevelt. Eisenhower, in his parting speech as president, warned of the dangers of the military industrial complex. Go read it.

    In a republic, there is some hope of having government as being a contervailing force against concentrated private interests, but in the US, we have lost that battle.

  31. purple

    Capitalism is dwindling within the Domestic markets of the West + Japan, because there’s not much profit to be had. US corporations increasingly find profit from overseas activities, where there is less infrastructure and more untapped demand. The growth rates in all emerging economies, not just China, reflect that. Hard to say how it will all play out, politically , economically and militarily. The US dollar-reserve issue is a major uncertain.

  32. Anonymous

    The AIG bonus “uproar” was a demonstration of exactly what the american people are left with. A veto, if they get angry enough.

    This creates the exact same dynamic as a 5 year old versus his parents, tantrum loud enough and you will get some attention. Then you can go back to sitting in your own filth and eating whatever you are given.

  33. Jojo

    The survey would have been better had they first asked people to define each term and only those who submitted an acceptable definition would have been allowed to participate in the actual survey. As mentioned above, few people could actually provide an acceptable definition as to what capitalism or socialism is.

    Fact is that each person has their own definition and ideas as to what was being asked of them, as is true in most everything in life. Like religion or political party membership, for example, many people have elastic definitions of what beliefs they must embrace in order to call themselves a member of their chosen group. When you ask a question like this, people often have only a couple of talking points that define capitalism or socialism for themselves.

    If this survey shows anything, it is significant public frustration with the current state of affairs. Such large degree of frustration commonly leads to a desire for change, ANY change that SOUNDS better. And that does not portend well. Sometimes you do get what you wish for and it is not what you imagined (refer to old fables about magical genies and wishes)…

  34. Swedish Lex

    All modern states are obviously ”socialist” to some degree, relying on markets to provide the juice that then can be taxed and distributed.

    A simple way to assess to what degree states are “socialist” is to simply look at the level of taxation and the level of on and off balance sheet commitments states have.

    It is by now common knowledge that the U.S., given the current level of taxation, plus the country’s off balance sheet commitments will force tax increases up to a level that will make the country as “socialist” as the average European country, at least. Add to that the cost of maintaining the U.S. empire, if that is what the U.S. elite wants, and Uncle Sam looks fiscally more like the British or French empires before they imploded financially.

    The self image that states have of themselves is another story. Most Brits would probably dislike the idea of them being labelled as “socialists” although the size of the British Government in relation to the country’s overall economy is not much smaller than e.g. “socialist” Belgium. Most French would completely reject the idea that France is a socialist state but rather a bastion of “republican” (not in the U.S. sense of the word) values that transcend the left-right ping-pong discussion match.

    Commentators on the European extreme left and right both argue that the EU is a monster of the extreme opposite that must be fought. The EU Treaty has as purpose to create well fare for its citizens through economic activities that should be as “free” as circumstances, e.g. environmental considerations, permit. The EU is thus more about smart, as opposed to dumb, governance rather than about left/right swings that most of the political propaganda (branding) in Europe still would like citizens to think. This is at least what I would like to think that Europe has evolved towards after a few millennia of tribal and ethnic wars.

  35. Jojo

    @Swedish Lex said – It is by now common knowledge that the U.S., given the current level of taxation, plus the country’s off balance sheet commitments will force tax increases up to a level that will make the country as “socialist” as the average European country, at least.

    What’s the average and maximum tax rate in Sweden? I remember from a story on 60minutes that in Denmark, these numbers were said to be between 40-60%.

    Now look at California in the USA. A middle class California resident might pay 28% Federal tax, 11% state tax, 6.2% SS tax and 1.45%. That’s around 47% on the last dollar. If you do well enough to be in the top bracket, then add another 11% or so (58%). There’s actually very little difference from Denmark, yet they get free healthcare, free education and a host of other social services making them:

    “The Happiest Place On Earth”
    LINK

    A social democracy doesn’t sound so bad at all!

  36. K Ackermann

    Those poll numbers are amazing when you consider the word Socialism is one of the reflex words the public has been conditioned to despise.

    What does it even mean?

    Is a library a socialist construct?
    Is the VA a socialist construct?
    A 401K?

    How much science is conducted in government labs or universities that receive public grants vs. corporate labs?

    The fact is, there is a lot of stuff that does not want to be done for profit. In fact, the instances where the government has saved money by privatizing services is a lot less than we are led to believe.

    Having Haliburton serve meals to the soldiers does not makes sense on any level, and it certainly showed.

    How many times have you heard of a Secret Service agent shoot someone in the face at a Christmas party, or shoot a bunch of people at a traffic circle? Blackwater was/is an abomination and the PR about them being professional was just more embarassment. I noticed Bush never talked about outsourcing the SS.

    I could go on all day and night about the wretched track record at the public/private interface, but I’d to hear some examples of where privatization has saved taxpayer dollars, and provided better service.

    Having skin in the game does not always mean a more efficient service.

  37. Anonymous

    “I could go on all day and night about the wretched track record at the public/private interface, but I’d to hear some examples of where privatization has saved taxpayer dollars, and provided better service.”

    As another poster here pointed out, the “savings” are usually based on cash accounting. The only cost considered is the cost now.

    An example- Digging a ditch.

    The whole point of digging a ditch is usually to move water. There is no money in that at all anymore. Once the work is done, there is no other money to be made.

    If you can sell that same person looking to move water a nice big, expensive machine that pumps the water, you can also sell them another pump in a few years. Add to that the cost of operating and maintaining the equipment over the long term.

    The most important “capitalist” part is making sure that that ditch never gets dug, to ensure competition.

  38. Anonymous

    In 1990 I had the privilege of living in the Soviet Union for a few months. At the time the economy was in shambles. Incentives were skewed, so that everybody was stealing from the system. The workers either stole material directly from the factories for sale on the black market or simply did not show up to work. Managers would not fire them. It was too difficult to terminate a worker and it would not save any money anyway since state subsidies often counted on headcount. The managers often had dirty hands and would not want to attract attention to themselves anyway. Better to accept scofflaws as a way of doing business. The death penalty was inadequate punishment to prevent massive tax evasion and theft and conversion of state property for the support of the black market. Nobody paid their taxes. Businesses cooked their books and received state subsidies in retunr for their excellent productivity and performance.

    Things are beginning to look a little similar here in the US today nearly twenty years later. We aren’t their yet but we are definitely on the path to good old fashioned socialism. Except here the worker gets kicked out on the street and eats government subsidized cheese. At least in Moscow they got a flat and regular stipend.

    What is the difference between capitalism and socialism? Capitalism is where man steals from man. Socialism is the exact opposite.

    Thank you for allowing me to take this walk down memory lane.

  39. Plantation Capitalist

    As with all polls, the framing of the question was duplicitous, designed to stimulate a positive response for the interviewers “objective function”.

    Due you prefer capitalism, Mr. Hannity, or socialism. How about you, Mr. Dobbs. Mr. Beck or Mr. Kudlow ?

    The Walton family of Arkansa prefer prefer free market capitalism with a side of tax breaks, economic development capital, and generous welfare benefits for their slaves. Speaking of Walmart, how is that DOT pilot project for by-passing American ports through Mexico going ?

  40. ruetheday

    The very question “do you prefer socialism or capitalism” is a false dilemma fallacy, and renders the poll results meaningless.

    I doubt that even 1% of poll respondents would favor Soviet-style state socialism. I also doubt that even 1% of respondents would favor unfettered anarcho-capitalism.

    A meaningful poll would focus on what sort of mixed economy people prefer.

  41. Doug

    Henceforth, Yves, please either replace the phrase ‘free markets’ or at least persistently accompany it with the phrase “markets with no rules”. And, please ask Rasmussen and others to ask folks if they favor “markets with no rules’.

  42. Anonymous

    The one thing I’ve never understood is why the libertarian crowd never seems to understand that a sufficiently powerful private aggregation of power could just buy the government. Empirically, that’s just what happens. I understand that folks like David Friedman call themselves minarchists– my question has always been, exactly where has that worked?

    It’s funny, I suppose, that I’m a libertarian precisely because I realize that private aggregations of power will inevitably buy the government. This is exactly the reason why I think the power of the government should be absolutely minimized: the damage that a captured government can do is much smaller if that governments’ powers are smaller too.

    David Friedman is an outright anarchist, and if you want examples I’d suggest you read his book ‘The Machinery of Freedom’

  43. Early Withdrawal

    What makes the surveyors confident that Americans even know what the word “Socialism” means? Do the surveyors even know what Socialism means?

    this report is a joke and can not be taken seriously.

  44. Tom

    The socialists are really coming out of the woodwork on this one, aren’t they? Because, one presumes, replacing what market competition remains with office politics will solve all our problems, once and for all.

    The current problem is, I submit, that government and business are being once again too intertwined, not that they are too separated. Why not read some Mancur Olson, James Buchanan or Gordon Tullock for how those reviled, evil, ludicrous classic liberals think about this?

  45. Anonymous

    “With Republicans calling everything objectively that looks like a solution “socialism”, it’s no wonder it’s gaining ground.”

    This is exactly what I’ve been telling everyone who will listen for the last several months — ever since it was the rallying cry of Republicans in the last election, and they lost.

  46. Dan Duncan

    If you simply take a snapshot view—then socialism is much more appealing than capitalism.

    But put the frame of socialism in a movie, and it’s not so pristine as Aging Demographics, Immigration and The Inability to Defend One’s Self become scene stealing villains.

    The Socialist Natives are getting restlessly old. The Immigrants are just getting restless.

    The rigidity of Euro-Style socialism is completely incapable of dealing with the escalating problem of its disenfranchised Arab and Persian populace.

    I am looking forward, though, to the “Artists Against Apartheid” concert put on by Bono and Springsteen…which of course will be played in the traditional Arab maqamat…with quarter tones in varying pitches for melody without the harmony…

  47. scepticus

    The problem with capitalism is that it works nicely when set within a context of abundant growth opportunities, which is why it succeeded so well in the early days of the USA – huge growth in population, resource availability, land etc etc.

    In fact evrything we know about capitalism has been formed during a 300 year secular trend of strong population growth since the green revolution of mid C18th.

    In C21st, none of the above applies any more. Little or no pop growth, precious few new resources and no new land.

    Those who promote capitalism as the ultimate organising principle do so based on a stagnant pool of evidence gathered from a past age, now congealed into a kind of blind faith devoid of imagination.

    This can be seen simply in the fact that any forward looking questioning of capitalist doctrine is shouted down as socialism.

  48. ragnarock

    Ives, as usual you get it right. Free markets are not free. A “free market” depends on high levels of moral discipline.

    The link between markets and morals goes somewhat along these lines: markets depend on law, and law depends on the state. But for the state to be under law – and not itself a lawless entity — there has to a rule of law, that is, an actually observed constitutional framework. But an actually observed constitutional framework does not and cannot exist in a vacuum. It depends upon the morality, vigilance, and vigor of the people.

    Capitalism (as Marxist pointed out) is a revolutionary force, by which he meant: it destroys traditional relationships and independent sources of morality and integrity, or what nowadays some people might call “social capital.” This social capital is precisely what has to be in place if people are to be moral, vigilant and vigorous. In other words, capitalism makes weak what has to be strong for there to be a constitutional state (and what such a state makes possible: markets with freedom of choice within a framework of law).

    Although a bit humbling, I think that we moderns have to come to accept that the ancients had a better model of the state than we do. They saw it as essentially unstable.

    Their paradigm was something like this: aristocracy (rule of the best) leads to plutocracy (rule of the rich), which leads to democracy (rule of the many), which leads to oligarchy (rule of the few), which leads to tyranny (rule of one), which leads to anarchy (no rule at all). In the chaos of anarchy, people become willing to listen to the best among themselves, and the cycle starts over.

  49. Anonymous

    Excellent post!

    Just as we need to see the deception in financial products we need more to see the deception in language. The two deceptions go hand in hand but the deception in language is most powerful as it serves to exploit us in all other areas of life.

    Deception in language is why the ‘rule of law’ IS a scam and why present markets have no rules and are in reality a “brawl”.

    Evil is always veiled in goodness. You can not “ban” good words and phrases (as you suggest with “free markets”) just because they have been co-opted. Explain the co-option and modify it accordingly when you use it, e.g., the ruling wealthy elite’s corruptly bought and paid for ‘free markets’, or the ideal of a ‘free market’. It is a matter of staying along side and ahead of those who deceive.

    The deception in language functions as the fluttering cape that deceives and makes the great bull tired. We need to stop charging the cape and instead explain the function of the cape as ruse — as decoy. Then we will see clearly the wealthy elite coward wielding his sword of corrupt politicians.

    You might try setting up a separate language page (Library of Most Co-opted Words and Phrases) explaining and listing what you feel are the most egregious and co-opted words and phrases and then link to it in your writing. Let those who comment contribute to the explanations. The number of posters in this thread who attribute so much CONCRETE bullshit to so few ABSTRACT words attests to the need for such a clarifying page or pages. Just explaining what abstract means might help:-) Let your great sensitivities be the final arbiter.

    Deception is the strongest political force on the planet.

    i on the ball patriot

  50. Anonymous

    A market with no rules is a brawl (think of drug dealers, who operate outside the law.

    A total misapplication of the concepts, along with an ignorance of history.

    Because the law makes the sale illegal, any existing sales would be of a specious nature. If the sales were not illegal we don’t know if there would be a brawl or not, but all the evidence suggests there would be no brawl.

    Perhaps you need a refresher course on property rights. One can look at parts of Europe where sales are not illegal and see no brawling. One can look at drug sales in prior to Reagan and see a much reduced “brawling” aspect of drug sales. Once property forfeiture became the de facto standard of enforcement, the sales environment became more brutal.

    In other words, once the law became more brutal, the illegal activity became more brutal. And the main reason the law became more brutal is because of governments over-leveraging themselves; they gotta make more things illegal to fund themselves via fines and asset forfeiture.

  51. Anonymous

    The real bite in the ass will be when, we have consumed and expanded our way down a dead end street and realize all this ology/ism talk is just spider webs in ones mind.

    We are at the peak of our powers and find little respite in old shortcuts to the golden days. Global war is out, too many dead and background radiation is no picnic, no new Territory’s to plunder for cheep easy moneys and no new construct which to base government.

    Nothing but to do but invent the new Territory’s in 1s and Os and bet on them, hay they are real, all you have to do is believe it.

    Skippy…is stagnation a natural event not to be muddled with by human inadequacy, well see.

  52. Anonymous

    Yves,

    The fact that powerful private interest can co-opt government to steal from the many for thier own personal gain is the exact reason we need a weak government. You know why people lobby, because lobbying has a huge ROI. It has a huge ROI because the government has the ability to tax, print, and borrow whatever it wants and spend it anyway it wants. Wouldn’t you want someone like that on your side.

    Elections are a poor way to keep such activity in check. The best way is to make it so lobbying government isn’t worth it, and that means taking away the governmental powers that private actors are looking to co-opt. You’ve got no military industrial complex if you have a strong constitution that makes wars difficult to start and limits the governments ability to tax in order to pay for it. If there is no money in the treasury worth looting there will be far less looters in Washington.

    If government is so easily co-opted by private interests it seems absolutely absurd to give more power to government, its essentially the same as giving more power to those same private interests.

    In a free market you get a choice. If you don’t like Citigroup or Halliburton, then you don’t have to give them your money. Go to a competitor or stop buying thier products/services altogethor. With government there is no choice and no competition. My money is being taxed away and given to Citi or Halliburton whether I like it or not.

    What we have in the US now is socialism. Its just not the happy go lucky form of socialism you thought it would be. You thought having democratic elections meant that some super race of intelligent selfless angels would take over the riens of government and create a perfectely ordered society. Sorry, the world doesn’t work like that. Talk about naive.

  53. Anonymous

    “With Republicans calling everything objectively that looks like a solution “socialism”, it’s no wonder it’s gaining ground.”
    Matthew Yglesias was making a similar point in his blog. He thinks the Republicans have overused and as such debased the word socialism to such a degree that Americans now associate it with European-style social democracy. Which would explain the poll numbers.

  54. Mondo

    Yves,

    just watched the first part of the BBC series on the Century of the Self. It is absolutely invaluable – thanks a lot for linking to it.

    I doubt that those who are the primary victims of the manipulations described there see them as a problem, and why should they ? Life was good, and it has been much more comfortable to remain complacent.

    Bernays was certainly right – most people are prone to manipulation if done properly. At the same time he might be regarded as one of the most dangerous men of the century, since he acted upon his insights in a totally amoral way.

    So, for a better society, a few questions need to be answered:

    - How do you make humans less receptive to manipulation ?

    - How do you prevent people in power to exercise their power without any moral considerations ?

    Limiting the size and thereby the power of corporations (including the power to capture government) would certainly be helpful. The debate at Cato posted by Anon @8:30 gives some very good food for thought on that, even if the libertarian world view is itself fraught with some inconsistencies, just like probably every other grand unified world view.

    With all that, the contradiction remains that there is an important role for government to play – but who can effectively control government if the constituents have no desire to really exercise their rights, because they are part of a Bernays group ?

    Do you think a majority of the people would even have the slightest interest in following, or contributing to, a debate such as this one ?

    Mondo

  55. Anonymous

    In fact evrything we know about capitalism has been formed during a 300 year secular trend…In C21st, none of the above applies any more. Little or no pop growth, precious few new resources and no new land.

    Halfway through that period Marx defined socialism. And he did it solely by reference to capitalism.

    If Capitalism has now become undefined due to a macroscopic background change then Socialism is left equally undefined.

    I think the Rasmussen poll has about as much relevance as a poll that posits faster than light space drives. And then further inquires whether on that basis people would support a pioneer effort to colonize suitable worlds in other star systems since travel to them is now possible.

  56. ruetheday

    Tom – Please don’t confuse classical liberalism with libertarianism. Classical liberals saw markets and trade as a means to an end, that of perfecting the individual, rather than an end unto itself as libertarians do. To understand the natural evolution from classical liberalism to modern liberalism, see TH Green and LT Hobhouse. Libertarians have promulgated a revisionist history of classical liberalism and its supposed corruption into modern liberalism that is complete hogwash.

  57. ruetheday

    Anonymous of 10:21 AM:

    The laws that make markets possible are the laws that create property rights and enforce contracts. Without these laws, theft and plunder would dominate over production and trade. Libertarians would like to simply skyhook property and contracts into place as if they represented some sort of universal transcendant order independent of society and government. That view is nonsense. Property and contracts are creations of society. They serve a valid purpose, but like any other human creation, they are not absolute and they certainly are not the foundation of a natural moral order as libertarians mistakenly seem to believe.

  58. Anonymous

    Yup: an american poll on ‘how do you like socialism’ means roughly ‘how happy are you with the workings of the present-day american capitalist system’ .

    Unsurprisingly, the demographics of who says AYE and who says NAY to the present state of affairs is exactly what you’d expect: those who’ve largely done well for themselves largely vote AYE in favor of the present-day system, and rest have more-mixed opinions.

    And yes, the fact that the AYE-voters not only call everything and anything they don’t like a NAY but seemingly race — scrambling atop each other — to post the most thorough, most vehement defense of the AYE and attack at the NAY does much to change the minds of the NAY-susceptible, but usually not in the AYEs would have it.

  59. Anonymous

    I think we need a new term between socialism and capitalism and that might be ‘governmentalism’.

    That is what we have in modern America. I begrudge no one who, through their own industry manages to make a fortune. I very much resent someone making a fortune by corruption and or manipulating the system on their behalf.

    Whatever the excesses of a Carnegie
    or Rockefeller may have been, at least the robber barons of unbridled, unregulated capitalism created something. What did a Franklin Raines or Robert Rubin do to deserve their fortunes?

  60. DownSouth

    Yves,

    I can’t tell you how much I enjoyed the BBC series. Thank you so much for the link, as it helped to not only crystalize some of my own ideas, but fill in with empiracal infomation areas where before I relied on speculation.

    I’d like to take this one comment from the video series and expand upon it:

    There are now growing demands that they fulfill a grander vision, that they use the power of government to deal with the problem of growing inequality and the decaying social fabric of the country. But to do this they will have to appeal to the electorate to think outside their own self-interest. And this would mean challenging the now dominant Freudian view of human beings as selfish, instant-driven individuals, which is a concept of human behavior being fostered and encouraged by business because it produces ideal consumers.

    Three thoughts:

    1) Freud certainly believed in the view of man as being helpless before his primordial drives of lust, greed and selfishness, but that idea was not original to him. It was Darwin who probably did more than anyone else to give the idea ubiquitous acceptance within the scientific community, also providing an explanation as to how man arrived at this condition.

    2) This concept of man “red in tooth and claw” is now coming under increased attack within the scientific community. More and more evidence is accumulating that indicates that it is simply not true.

    3) The iconic figure who came to symbolize this concept of man as “red in tooth and claw” was the New Atheist, Ayn Rand. Now that she is gone, the most wellknown figures of “fostering and encouraging” the belief are the “four horsemen”–Richard Dawkins, Sam Harris, Christopher Hitchens and Daniel Dennett.

    To give an idea as to what their line of argument is, here’s a video of a lecture by Richard Dawkins, which begins at min. 47:00…

    http://thesciencenetwork.org/programs/beyond-belief-science-religion-reason-and-survival/session-7-1

    As one can see from Dawkin’s presentation, the New Atheists have now been forced to admit that there is an immutabe “good Samaritan” side to human nature. But as one can see, Dawkins surely doesn’t like it. He calls it a “mis-fire” or “mistake” from our ancestral past, from a time when humans lived in smaller family or tribal groups, explaining that it results from the mechanisms of “kinship, recipricocity, reputation and the handicap principal.” The implication is that the good Samaritan gene no longer contributes to our reproductive success or survival success.

    Conspicuously missing from Dawkins’ analysis is what Walter Bagehot pointed out in Physics and Politics 150 years ago:

    He (Bagehot) begins indeed by showing that “Natural Selection” in the early stages of the march of civilization–the better organized, more cooperative groups conquer the less unified. But then more and more other qualities, initiatives, and ideas–liberty, free discussion, written law, habits of calm reflection, of tolerance and generosity–conduce to survival, because they make for an ever higher degree of cohesion. These virtues are the strength of the national state, whose power a less developed people cannot successfully withstand.

    I could go on punching holes in Dawkins’ presentation, but just let me conclude that, despite all his claims as being on the side of science, I get the sense that his is a polemic, not a presentation by a scientist in search of empirical truth. He seems to be much more interested in peddling his version of what human nature ought to be, and not what it is.

  61. artichoke

    “Yves again. The phrase “free markets” should be banned. It is a slippery, ill defined concept, and perversely conflates “freedom” (lack of restrictions) with “markets” which rely on laws (even Friedman would grant that) and exchange. A market with no rules is a brawl (think of drug dealers, who operate outside the law. deal in often adulterated goods, and contracts are often enforced via violence). It is a brilliant bit of Newspeak.”

    Yves this is a brilliant insight, as well as a brave comment. Thank you.

    (To the first poster in the thread, which government intrusions are arbitrary and which are not? The answer probably depends on whose ox is being gored, i.e. Yves is spot-on.)

  62. Anonymous

    You betcha socialism is gaining in the USA and it started this time with the banksters.

    Socializing the bank/Wall Street losses via bailouts is socialism for the rich. The lower and middle classes only want what they think is their fair share.

    Capitalism involves both successes and failures. If you won’t take the failures then you are not a capitalist in my estimation.

    You will end up at some form of statism if those responsible for the losses refuse to take the downside and the authorities abet evading the consequences.

  63. Anonymous

    Dan Duncan said…

    “If you simply take a snapshot view—then socialism is much more appealing than capitalism.

    But put the frame of socialism in a movie, and it’s not so pristine as Aging Demographics, Immigration and The Inability to Defend One’s Self become scene stealing villains.

    The Socialist Natives are getting restlessly old. The Immigrants are just getting restless. …”

    Yes, to have a stable socialist system, one must control immigration. If there are benefits, outsiders will show up to benefit from them.

    But corporations have been strongly against immigration control. They don’t want strong societies, they want social chaos that they will control and steer their way.

    Yet another problem with capitalism, which (by the way, since some have given wrong complicated definitions) means that capital makes the rules.

  64. scepticus

    The advocates of ‘true capitalism’ (aka full reserve banking supported by a gold standard and a magical minarchy) posting on this thread who are against both the crony govo-capitalism we have now and against socialism, make a number dubious assumptions.

    The worst self-deception is that they assume that under a full reserve system there would still be lending of the kind sufficient to support the kind of capital investment required by modern economies.

    There is NO evidence to suggest that any lending of significance would take place under such a system. No lending, no capitalism.

    I’m prepared to believe that a free exchange system without usury might be the best we can do, but it is very unlikely to qualify as capitalist and so should not be termed accordingly.

    In fact it would likely be considerably closer to a steady state economy than its advocates would like to admit.

  65. MyLessThanPrimeBeef

    I don’t care if Yves censors my post, for what I am about to write is truly ad hominem in that sense that it attacks humans (hominem, accusative form of homo); but I have to get this off my chest. The whole discussion here in this thread is just so typcial of anthropocentric chauvinists. From your point of view, everything is and should be about Homo Idiots Idiots. As a card-carrying member of ‘People Against Unethical Treatment of Vegetables,’ I deny that and instead, urge you all to look beyond your little human world and start looking at the whole world from 3 inches off the ground.

    As for the discussion about defining what we mean, perhaps knowing what I am about to say will make you feel a little better. The sad fact is that the quality (a word hard to define, according to the guy who wrote ‘Zen and The Art of Motorcycle Maintenance.’) of communication can be categoried (as much as anything can be differentiated or categoried, a big no no in Zen) as follow, in descending order:

    1) Telepathy (no need for physical contact)
    2) Vulcan mind meld (needs physical contact)
    3) Deeds
    4) Sweet spoken words
    5) Written symbols

    So, if you anthropocentric chauvinists realize that we (including yourself truly) operate at the lowest gutter level, you wouldn’t be so exasperated over a few Americans or Europeans or Chinese, mis-understanding a few words.

    For your infomration, most animals and vegetables operate at level 3 or higher.

  66. artichoke

    On the contrary, MLTPB, there have been some very insightful comments in among the trolls shouting “communist!!”.

  67. JR

    scepticus,

    “The worst self-deception is that they assume that under a full reserve system there would still be lending of the kind sufficient to support the kind of capital investment required by modern economies.”

    I would suggest the current problem is too much lending, or more specifically too much credit created out of thin air. You know, an unsustainable bubble.

    I have no idea why you don’t think there will be sufficient lending on the free market. Perhaps you are confused by what has happened in recent history as Central Banks have pumped money to keep interest rates down.

    The interest rate rises when there is a shortage of loanable funds. The higher interest rate incentivizes people to save their money.

    People might invest in savings accounts and time deposits so that productive businesses can borrow their money instead of speculating on stock market appreciation.

  68. MyLessThanPrimeBeef

    Artichoke, I hope they are not treating you unethically. By the way, would you consider join ‘Animals and Vegetables Against Treating Humans Badly’ club? All too often, beans have not been too kind to humans.

  69. scepticus

    JR, all that you say is simply speculation. You have no way of knowing what interest rate would be likely to settle out under full reserve.

    The only reason we get interest rates averaging around 7% or whatever under the current banking system is because we have FDIC and central banks as lenders of last resort. Without these ‘socialist’ guarantees interest rates would be of necessity be much higher.

    How much higher? I suggest that pricing money beyond a certain level makes capitalism untenable.

    Thing is, no-one, including the chaps at mise.org has any idea what rates of interest would obtain under full reserve, and even less idea of what rates of interest are actually required to make the capitalist doctrine feasible as a social system.

  70. Anonymous

    The basic problem is that everyone’s up to their eyeballs in debt.

    The debt must be removed (i.e. defaulted because the creditors will fight it) and the two ways of doing that are inflation, or repudiation, either legal or extra-legal.

    It’s wrong to chain people to these debts. Jubilee every 50 years is a radical idea from the Bible.

  71. Francois

    “markets” which rely on laws (even Friedman would grant that)”

    Hear! Hear!

    Friedman granted much more than that, although his “disciples” blanch and twitch when I quote their Masta.

    “A major source of objection to a free economy is precisely that… it gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

    The existence of a free market does NOT of course eliminate the need for government. *On the contrary*, government is *essential* both as a forum for determining the “rules of the game” and as an umpire to interpret and enforce the rules decided on. What the market does is to reduce greatly the range of issues that must be decided through political means, and thereby to minimize the extent to which government need participate directly in the game.”

    There you have it! The balance between State power and Market power. Alas, things get murky and screwy when State and Capital start to use each other for symbiotic growth…which is exactly where were at now.

    It could turn truly ugly (read, social unrest) if we get the second leg of the Great Recession is as bad or worse than the first one.

  72. Russ

    Francois quotes M. Friedman:

    “A major source of objection to a free economy is precisely that… it gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

    If he and the Chicago Boys really believed in giving the people what they want, why were they among the worst enemies of democracy in history? Why were they complicit in Allende’s overthrow and assassination and Pinochet’s mass murder? Why did they support every feudalist coup?

    The fact is, Friedman’s nightmare vision has never once democratically triumphed anywhere, and never could triumph anywhere in any way other than through Big Lies and mass violence.

    (Nor was this a case of uncouth disciples tarnishing the pristine ideals of the master. Friedman personally partied with Pinochet.)

  73. john c. halasz

    scepticus and JR:

    You’re both missing the Kaleckian point that the level of supply of loanable funds is primarily determined by the level of corporate profits, which result from successful, productivity-improving investments, and which must be re-cycled into further investment, such that a) it doesn’t entirely depend on a fund of prior savings, since productivity-improving investments generate “savings”, and b) credit is necessary to getting production cycles going and extending them, hence endogenous to large-scale industrial production.

  74. RockyR

    People reading this blog should know well enough to know that what we have in America isn’t a free-market system. It arguably instantiates some of the tenants of capitalism (private investment, right of property, profit accrual to shareholders, etc.). However, our system is not “free” where “free” is defined as “freedom from government control”.

    1. Subsidies to farms, agricultural corporations, and land owners to control the production and price of foodstuffs is not consistent with a free market ideology

    2. Bank bail-outs are anti-free market

    3. Government-protected monopolies (Asurion, phone companies, cable companies, utilities, etc.) are anti-free market

    4. Lobbyists are anti-free markets

    5. Fannie/Freddie, FHA loans, and the bulk of the system to finance housing in the US are antithetical to a free market system

    6. Our health-care system, with medicare, medicaid, subsidies to hospital administration (see medicare), managed health care corporations (our health “insurance” system is SOCIALIST by virtue if not by management structure – private/public). The very concept of our private/public managed care system is not free-market based – broken and dysfunctional as it may be

    7. 401(k) plans, IRAs, 403(b)s, and any other tax policies made to favor one group over another – give one special interest the ability to accumulate wealth at the expense of another – is not a “free market” system

    8. Corporate health care plans are antithetical to free markets… ever feel indentured to your HEALTH CARE PLAN? Does that feeling feel very FREE? It doesn’t because it’s not.

    9. The act of regulating one part of the economy while deregulating another… sanctioning one behavior while banishing another through a central regulatory body – NOT free market

    10. Local government subsidy of sports stadiums, convention centers, office parks… the list goes on and on – NOT free market

    11. Any attempt to protect a legacy institution (GM, C, BAC, FNM, etc.) from failure DOES NOT support a free market

    I could list more, but you would just get more bored.

    What we have in America is NOT a free market system. It may not by definition be socialist. It may be corporatist, or fascist, or “crony capitalist”, but it’s NOT free market.

    STOP blaming “free market” ideology for our current problems. Your premise that what we have is a free market system – or that the act of changing the regulatory regime of one part of our managed economy is somehow a defense of “free market” ideology – is wrong. It’s fair enough to argue the virtues of socialism vs. capitalism, but using this crisis to justify the implementation of one system over one that does not currently exist based on the supposed shortcomings of the system that doesn’t exist is specious at best.

    Thanks,
    Rocky

  75. Anonymous

    Rocky is correct. America stopped being close to a capitalist society when it established the Federal Reserve in 1913. A nation that outsources it’s very own money supply is corporatist. The world wars and judeo-christian value system kept state capture at bay for many decades.

    What we are now is Fascist and sloping quickly into Tryanny, Anarchy and the process begins anew. The only comfort an American can glean out of this is that the process due to the information age is occuring in spans of decades rather then centuries as in era’s past. After out Tryanny stage, we might be spared the worst effects of anarchy due to being in the information age. Perhaps we will settle the bitter debate beween James Madison and Alexander Hamilton on the importance of Central Banking. Every level of this perverse society here in America has permeated through massive debt creation and the temporary but powerful illusion of wealth.

  76. scepticus

    John C,

    I’m inclined to agree with you on your point (b), although in fairness it is still open to debate.

    On (a) you assume that amount of loanable funds will dominate in setting their price, however there are other factors. Specifically, the fact that banking losses are periodically socialised explicitly via bailouts and implicitly through inflation reduces the risk to individual investors and pushes down the interest rate. The bottom tier of the pyramid subsidises interest rates for the capitalist classes at their current level by being taxed and robbed via inflation.

    Under full reserve banking interest rates would place the entire risk burden squarely on the investor and I believe real rates would therefore be very considerably higher.

    Therefore capitalism only works in my view because the working and middle classes are forced to assume a significant portion of investment risk.

    With long term growth rates below say 3%, this form of capitalism is not viable. Full reserve capitalism would require far higher growth rates even than 3% to prevent it degenerating into a steady state stagnation.

    Growth rates for the developed world can be expected to be well under 3% for the rest of this century barring unforseen technological miracles.

  77. brushes9

    “The Century of the Self” is excellent. It points out how advertisers used people’s existential fears surrounding identity and produced nations of shoppers by elevating “desire” out of the realm of taboo until, now, I can buy my identity, thanks to brands that reflect who I am.

    Robert Bly in, “The Sibling Society,” argues that this validation and engorgement of our desires is why our super-ego’s have become pitiless judges and frantic dictators, to balance out our overly validated ids. He adds that this is especially acute in our youth, and explains both their taste for violence and their suicides.

  78. brushes9

    I don’t want people to think that my point summarizes “The Century of the Self.” This film provides the methodology behind the psychological manipulation of our society from the early years, when people commonly believed that one or two “outfits” of clothing were enough.

    The capitalist dilemma was that the assembly lines quickly saturated every market when people prided themselves on frugality and controlling desires. Can’t have that!

    Today, we have “focus groups” that are used to test words, memes and frames of meaning. What do they use to draw conclusions on their data…a century of practice and research as documented in the film.

    We are so screwed. :}

  79. Anonymous

    What is troubling is how the western intellectual will cogitate on concepts that are so irrelevant as to be laughable.

    The ‘isms’ are ideological and yet the bulk of the world fixates on the racial, religious and tribal.

    As we create polyglot societies we imagine we are united under some constitution, the rule of law, yet all around us we see constitutional process and the rule of law being eroded.

    A savage with an AK-47 is given lawyers and due process yet a military commander ordered to stop he depradations the savage inflicts
    can find himself indicted by a ‘international tribunal’

    The barbarians are at the gate and they will not much care about your ability to define irrelevant distinctions. He will know you. Will you know him?

  80. Anonymous

    Socialism? What socialism? This survey is about as relevant as asking somebody if they thought free peasantry was better than slavery.

    If anybody still thinks that by the end of this depression, hard-working, honest American and Chinese folks will continue to indirectly subsidize lazy Frenchmen’s and Frenchwomen’s 30 hour work week and 2 month paid vacations, or siesta-loving, not-so-long-ago-third-worlder Spaniards’ lofty pensions and free healthcare anymore, they’re in for a big surprise.

    The free lunch is over. The European pseudo-socialist societies are broke, the money is gone, and the trans-Atlantic handouts have ended (as soon as AIG truly goes bust, that is). America and China, tghe only nations that truly matter, are now focusing onto themselves, and the formerly socialist European parasites are on their own in their crumbling socialist utopias.

    Welcome to the new Global Social Darwinism…… Coming to a newly-opened Parisian sweatshop near you…LOL

    Vinny GOLDberg

  81. Anonymous

    Sorry, I posted my above message twice by mistake… not because I thought it’s worth reading twice…:)

    Vinny GOLDberg

  82. Anonymous

    To right brushes, advertising and sales driven profit are bad toys for humans to play with, like training young men and women to to kill in the military, for foreign policy enforcement/corporate trading advantage.

    Only to have them come back to the real world and become dysfunctional, on one hand killing is good to resolve issues, but only over seas with Gov approved individuals or groups, never at home with individuals or groups that pose a much greater threat than those over seas.

    No wonder many thinking people come back all PTDS, their rational mind can not make sense of the world they live in, to many contradictions, like doc said, go all HAL9000 on them selves. Where the people that accept the programing entirely come back and drink at the pub telling war story’s to the crowd’s delight and their super ego gets its just deserts/validation.

    Self perpetual interaction setting the stage for the next crop of defenders for our country.

    Skippy…rape, pillage, burn and eat BABYS….old ranger cadance…it was done tongue in cheek though, right?.

  83. Anonymous

    Welcome to the new Global Social Darwinism…… Coming to a newly-opened Parisian sweatshop near you…LOL

    Vinny GOLDberg

    Vinny, I think you mean Muahhahahaha Muahahahaha instead of LOL.

  84. brushes9

    Yes. Wow! Well, I have heard people of all diagnosis, who don’t suffer crippling symptoms, do so by making cripples of others. I honor the former.

    In-authenticity is now perceived as normal. That is what I would be, now, if I were not gifted with my trauma, illness and suffering.

    My life is not interrupted, this is my life.

    We are so screwed, because I/we are a society of ponzi-personalities. The heroes at the dinner tables are all becoming zeroes. The path forward, re-invention, pain and suffering, is not easily embraced, to put it mildly.

    But, deep down, I believe that we can do this. It was hard for me, but I’m lame on two or three different counts.

  85. gordon

    Yves: “…[capitalism's] promoters managed to sell it to libertarians, who somehow bought that this construct would help the little guy..”

    I don’t think so. Libertarians are more cunning than that. Neocon capitalism looked like a good way to avoid taxes, something which has always been at the top of the libertarian agenda.

  86. K Ackermann

    @MyLessThanPrimeBeef – watch your mouth. Your comment about humans was speciest, and you are probably lucky it went over their heads.

    As a duck, however, I couldn’t agree with you more even if you were twice as correct.

    That was an interesting driving stat, and I’ll add it to my scary stat list and share another one with you:

    50% if all doctors graduated in the bottom half of their class.

    I’m not sure what the MOE is.

  87. cent21

    Thought experient for investors primarily interested in saving for retirement.

    Social Security revenues are down about 10% this year. The stock market is down about 50%. Which one is more secure under worst case economic conditions?

    Relying on people being employed in the future, even in an environment where unemployment might exceed 10%, still leaves about 90% of Social Security revenues ex trust fund interest intact.

    Can any combination of private capital guarantee that fraction of a promised return on (or of) capital some 50 years into the future?

  88. Anonymous

    I didn’t realize there was socialism. My understanding it’s all capitalism in some form or another ex. slave labor.

    Working for a government to be supported by the same government doesn’t replace capitalism as labor is still producing and selling. Just being brutally taxed is no reason to reclassify it as socialism.

    Call it what it really is: over taxation on capitalism.

    Free markets exists outside capitalism such as barter with your neighbor or a local drug dealer, these things go on all the time and can’t be stopped.

  89. JR

    john c. halasz,

    What is your point? Mine is that we don’t need G printing money to otherwise make up for an inherent shortage in loanable funds. Its my position G printing destroys real wealth and reduces the pool of loanable funds.

    More money is not wealth, it just makes the existing money worth less and benefits the early recipients of that money to detriment of others.

    “You’re both missing the Kaleckian point that the level of supply of loanable funds is primarily determined by the level of corporate profits,”

    Actually, I disagree with it. What about all the money the Government pumps into the banking system?

    I agree business profitability plays a key role in expanding the pool of real wealth that can be either saved/invested or consumed, if that is what you mean.

    “which result from successful, productivity-improving investments,”

    agree about where profits come from

    “and which must be re-cycled into further investment,”

    Why must they be? Can’t firms pay dividends?

    “such that a) it doesn’t entirely depend on a fund of prior savings, since productivity-improving investments generate “savings”,”

    Agree existing business can make profits and thus not have to borrow as much money. What about the new business? What about the businesses that want to invest in capital intensive expansion?

    “and b) credit is necessary to getting production cycles going and extending them, hence endogenous to large-scale industrial production.”

    Agree we need credit to support new businesses and the capital-intensive expansion of existing business.

  90. JR

    Hi,

    What is selfishness?

    Is altruism selfish?

    Austrian economists do no think people are selfish, they think people act purposefully to meet their goals. Many libertarians and anarcho-capitalists are Austrian.

    Mother Teresa wanted to help people. So she did.

  91. Anonymous

    @JR said…Mother Teresa wanted to help people. So she did

    ….

    Sorry JR but,

    You mean the old lady that ran the orphanage, that had her face and all the poor/hungry kids splashed all over media, that took in $$$$$$$$$$$ of monies, that never used 1% of that money to help those kids, but was the reason people gave the money and was used to fill the vaults of the Roman Catholic Church. No wonder she was canonized, best money make the Church has seen in hundreds of years.

    Bad point in case me thinks (she was selfish) in her beliefs, that suffering was good for their souls. To bad every one that gave money did so under false pretenses, but their good at that game eh.

    Skippy…careful of your goals.

  92. Openworld

    Two comments on overlooked common ground in the “left” and “right” postings above —

    1. The free market is where different nodes of cooperation compete.

    2. “Altruistic” behavior can indeed spring from selfishness.

    On this second point, I’ve admired Rand over the years because of her respect for free institutions and formal equality in political relationships.

    It’s not a great leap to reconcile Rand’s respect for the inviolability of individual rights with an abiding respect for (freely-chosen) acts of generosity.

    From a Randian perspective, generosity and even altruism can flow through a simple decision: to widen one’s sphere of caring to include those who share the qualities of spirit that one wishes to see replicated.

    Dawkins’ ideas on how “selfish genes” (and “selfish memes”) can prompt unselfish action suggests a path for understanding why capitalists with an extended self will take risks to ensure the survival and reproductive success of others who hold valued qualities of spirit.

    In these cases of “sacrifice”, we may be part of an evoluntary process in which “selfish values” compete for survival and reproductive success. When individuals who have kindred qualities of spirit interact, trust grows and the potential for cooperative endeavors increases. This can create foundations for remarkable actions of “unselfishness” such as Wikipedia (created by Jimmy Wales, an Ayn Rand admirer) — not far from Marx’s vision of human production after the withering away of the state.

    Mark Frazier
    Openworld.com and EntrepreneurialSchools.com
    @openworld (twitter)

  93. Anonymous

    Agree with skippy, I love the idea of trashing a Saint.

    JR

    Mother Theresa wanted to help people? Who is to say they could be helped to begin with? Who is she to decide how any money, time or effort will be spent? In the best radical position of anarcho-capitalists, those people would be much better off spending that themselves.

    Charity is not a good use of capital.

    Those who have the gold make the rules.

    The biggest problem with a gold standard is the Mechanics.

    Who already has the gold? Why, if you have all the gold, would you let anyone use it for money, its value is theoretically infinite in that situation.

    Who makes the rules going forward? Are there elections, lobbies? Who gets whats there?

    If the government budget is too big to not have people sucking on, who says the money supply of the world wouldn’t be a great target for manipulation? Who are the police that protect this money supply? How are they governed? How do they get the gold in order to get the power to make the rules?

    God bless the good mother.

  94. DownSouth

    Openworld said…”On this second point, I’ve admired Rand over the years because of her respect for free institutions and formal equality in political relationships.”

    But “formal” political equality never translates to real political equality. This is why libertarian fairytales never come true.

    As Reinhold Niebuhr wrote in The Irony of American History:

    The American demcoracy, as every other healthy democracy, had learned to use the more equal distribution of political power, inherent in universal suffrage, as leverage against the tendency toward concentration of power in economic life. Culminating in the “New Deal,” national governments, based upon an alliance of farmers, workers and middle classes, have used the power of the state to establish minimal standards of “welfare” in housing, social security, health services, etc. Naturally, the higher income groups benefited less from these minimal standards of justice, and paid a proportionately higher cost for them than the proponents of the measures of a “welfare state.” The former, therefore, used the ideology of Jerffersonianism to counter these tendencies; while the classes in society which had Jefferson’s original interest in equality discarded his ideology because they were less certain than he that complete freedom in economic relations would inevitably make for equality.

    In this development the less privileged classes developed a realistic apprecition of the factor of power in social life, while the privilegd classes tried to preserve the illusion of classical liberalism that power is not an important element in man’s social life. They recognize the force of interest; but they continue to assume that the competition of interests will make for justice without political or moral regulation. This would be possible only if the various powers which support interest were fairly equally divided, which they never are.

    Since America developed as a bourgeois society, with only remnants of the older feudal culture to inform its ethos, it naturally inclined toward the bourgeois ideology which neglects the factor of power in the human community and equates interest with rationality.

    Such a society regards all social relations as essentially innocent because it believes self-interest to be inherently harmless. It is, in common with Marxism, blind to the lust for power in the motives of men; but also to the injustices which flow from the disbalances of power in the community. Both the bourgeoes ideology and Marxism equate self-interst with the economic motive. The bourgeois world either regards economic desire as inherently ordinate or it hopes to hold it in check either by prudence (as in the thought of the utilitarians) or by the pressure of the self-interest of others (as in classical liberalism). Marxism, on the other hand, believes that the disbalance of power in industrial society, plus inordinate character of the economic motive, must drive a bourgeois society to greater and greater injustice, and more and more overt social conflict.

    One of the things that struck me as I was viewing the BBC series is not only the extreme pessimism of the New Atheist world view, but also the fact that it is so elitist and anti-democratic. Essentially what it says is that the masses are too stupid and/or manipulable to be trusted to make decisions.

    And recent events have shown us what happens when we follow the path of the New Atheists. If those on the “right” adhere to the New Atheist ideology, the result, though totally unintended, is the unholy alliance of economic and poltical power. If those on the “left” adhere to the New Atheist ideology, it leads to solutions such as those proposed by W.E.B Dubois in his “talented tenth,” which was debunked by Cornel West and Henry Louis Gates in The Future of the Race, as was discussed here:

    http://malalatete.typepad.com/mal_a_la_tete/2008/01/cornel-west-tak.html

    The only way out of this quagmire is a healthy, functioning democracy, something that in the pessimistic world of the New Atheists is not possible.

  95. Anonymous

    Yves,
    Thanks for the BBC links. Very much confirms my gut intuitions about how modern Americans have become consumers and not citizens. Apparently this was planned– which is pretty disturbing. I have some experience with the human potential movement, and can attest that a lot of it promoted self-satisfied, uninvolved people. One of the things that is sad about it is that so much of it was poorly understood and warmed over Buddhism. Looks like Sam Harris and his cohort are well on their way to being this generations pop-Buddhist ideologues.

    For the libertarians:
    Again for the minarchists and libertarians: HOW will you keep the government limited? HOW will you prevent private entities from overwhelming a crippled and weakened state? Why should the state become limited? Just because people want it to be so? Are you going to depend on people’s altruism? Waving a piece of paper at an oligarch is not going to stop him.

    Please also provide working examples of your minarchist paradise.

  96. JR

    Re: “Century of the Self”

    Are really suggesting Reagan/Thatcherism = libertarianism?

    —-

    Mr. Curtis’ documentary deals with capitalism and consumerism, primarily in #3, and seems to use capitalism as a pregnant term with some specific assumptions:

    1. Capitalism is based on selfishness.
    2. Capitalism requires an obsession with accumulating things.
    3. Advertising drives the desire for accumulation.
    4. Wealth is limited, so one can accumulate more only at the expense of another.

    #1 is based on a misunderstanding of what Smith meant by “self-interest.” He did not mean selfishness, but that’s what the Curtis seems to believes.

    #2 is based on Keynes, who believed that consumption drives economies and should be promoted by the government instead of savings. Of course Keynes was flat out wrong.

    #3 is a misplaced faith in the power of advertising. Many anti-consumerism writers take the claims of power made by advertising execs at face value instead of looking at real research, which would tell them that advertising can not make people buy something they don’t want, nor create desires that conflict with basic values.

    #4 is just plain old mercantilism, which shows Curtis is about 400 years behind.

  97. Yves Smith

    Anon of 4:10,

    I find that to be a very distorted reading of the series. Nowhere does he say anything resembling your points.

    As to points 1-3, Curtis instead says that government and big business used ideas from psychology to promote a consumer culture and later in the Reagan/Thatcher era. to combat the growth of a cohort that sought self-actualization (out of the human potential movement) which was hard to reach by conventional ad techniques (they became a psychographic rather than demographic segment) and used libertarian messages to successfully reach many of them.

    And as for 3, I suggest you look at the effectiveness of TV drug ads. They most assuredly do lead consumers to hound their doctors for those meds. I get that complaint from doctors all the time. And 50 year ago, values were very different. No one cared about designer labels or having the right gadget. To argue against the effectiveness in the face of consumer loyalty to brands, or identifying certain brands with status (particularly in cars) suggests you have not been out in middle/upper middle class America in the last 20 years.

    Curtis in fact seldom uses the word capitalism in the series, save when talking about the struggle versus communism/bolshevism.

    He did not say advertising “drives” the desire for accumulation. Greed has been around for centuries. He said that advertising shaped tastes and create a consumer society. That is quite different.

    He never said anything resembling 4. Saying that the effect of creating and catering to a consumer class has shifted even the left to the right is far short of 4.

    And mercantilism is alive and well. It’s the basis of Chinese trade policies.

  98. DownSouth

    @ the essay by Roderick Long on the Cato Institute web site.

    I’ve come not to expect much in the way of disinterested commentary from organizations like the Cato Institute who are paid to advocate for big business, and this essay certainly doesn’t disappoint.

    The problem with Long’s essay is not so much what is there, but what is not there. He begins by doing a very good job of detailing what ails the U.S. economy: the capture of political power by economic power.

    But instead of advocating for the obvious solution, which is for the people to take political power away from powerful economic actors, he instead advocates for the elimination or curtailment of political power.

    Of course what is completely missing from this little piece of sophistry is that the libertarians not only have an economic program, but a political program as well. So there is no mention of the fact that those things that would prevent powerful economic actors from using their inordinate economic power to gain inordinate political power–things like regulation of campaign finance, control of lobbyists or limits on the concentration of media ownership–are anathema to libertairans.

  99. Danny Vice

    America isn’t a free market system?

    What? Are you losing your mind?

    If I want to sell a banana for $12, I can. Now is there regularion that requires me to assure I won’t kill someone with that banana? yes.

    Do I have to charge tax for it, yes. Do I have to provide safety measure for emplyees who harvest that banana? Yes.

    But those are regulations for the public good.

    Socialism isn’t even in the same argument.

    Socialism is when the state buys my company and decides how much I deserve to make for my “part” in providing it.

  100. neo ink

    I live in a socialist country. Canada.

    You know what, it’s a wonderful place, and I am glad to live here and pay my dues and provide help for those fortunate and get the services that we do.

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