Likelihood of Success

Not socialism enough

Mar 6, 2009 Gelt, Medialites

Harold Meyerson:

Take it from a democratic socialist: Laissez-faire American capitalism is about to be supplanted not by socialism but by a more regulated, viable capitalism. And the reason isn’t that the woods are full of secret socialists who are only now outing themselves.

Judging by the failures of the great Wall Street investment houses and the worldwide crisis of commercial banks; the collapse of East Asian, German and American exports; the death rattle of the U.S. auto industry; the plunge of stock markets everywhere; the sickening rise in global joblessness; and the growing shakiness of governments in fledgling democracies that opened themselves to the world market — judging by all these, a more social capitalism is on the horizon because the deregulated capitalism of the past 30 years has blown itself up, taking much of the known world with it.

Wow, really?  Funny, because looking out my window the world looks more or less the same as it did last month.  And I’m up on the 44th floor, okay, so I can see quite a bit of it.

This is not merely facetiousness; rather, it is a key point.  It’s odd that a “democratic socialist” would miss this point, but maybe, on consideration, it’s not.  Let’s flesh it out.

Very, very wealthy people losing almost all their wealth — or, Madoff victims aside, losing more wealth than most of us could ever dream of, but still being immensely richer than the fantasy of that same dream — is not “taking much of the known world with it.”  The same goes for once-powerful institutions such as commercial and investment banks.  What on earth kind of socialist sees the fall of such “robber barons,” exploiters, real live capitalist pigs, as “taking much of the known world with it”?  The bigger they are, the harder they fall, right?

An 8.1% unemployment rate is rotten, but “most of the known world” would seem to be some profound multiple of eight.   Is the prospect of a massive reduction in the United Auto Worker’s cashflow, and its ability to finance its political projects, really the end of days?

Foreclosures on unreasonably overbuilt, stupidly overfinanced McMansions?  That’s most of what world, exactly?

I’m not underplaying the economic crisis we’re going through now; but it is not quite the hoped-for collapse of capitalism that Marx, like a modern-day goldbug, predicted “any day now.”   Obviously if the UAW takes it on the chin because of massive unemployment in Detroit, that is bad all around… in the near term.

On the contrary, this moment in economic history, and the reason it can and is taking place now, is as good a proof of the vitality of the market as there is.    Is today’s middle-aged GM worker better off today, unemployed and used to a standard of living way out of proportion to his actual ability to add value to the economy, than if he had left the factory, its rewards undistorted by government and union intervention in the  market, when he was still young enough to be trained in a useful trade for our time and place 25 years ago?  If he could know of this future, what choice would our model proletarian have made for himself, for his family, then?

But pay the long run no mind:  The present experience is painful enough, and pain is indeed sufficiently broad, that it provides the emotional, demagogic opening for exactly the kind of socialism of a Harold Myerson.

And what kind of socialist is that?  The typical kind, meaning resentful of an unregulated disbursal of power, and intellectually dishonest — and, of course sarcastic; the kind who can write things like this with a straight, if sneering, face –

We have the world’s highest health-care costs, borne by businesses and employees that cannot afford them; nearly 50 million Americans have no coverage; infant mortality rates are higher than those in 41 nations — but at least (phew!) we don’t have socialized medicine.

– while ignoring what is happening in every system with socialized medicine.  It is part for the course in rhetoric of this sort to ignore the broader reality that inequality of outcomes is not proof of a systemic failure at all, and is more often than not vastly superior to regulation in delivering overall greater welfare by every measure other than … well, equality of outcomes.

Socialists preach obsession with the high and low ends of every distribution of wealth or benefit or joy, even of talent, and use the fervor thereby generated among the resentful during moments of economic panic to ratchet up state power. The great irony of it all is the claim of socialists during these moments that the predictable and necessary pain caused by the operation of the market (of which sectoral collapses, especially in the most regulated sectors, are a certainty) proves that state control over markets, and the people who live in them, is the route to  “true” long term prosperity.

And that is the fundamental ugliness at the heart of every socialism, whether it calls itself “democratic” or otherwise.  It does not exult in overall benefit, or opportunity, or achievement.  It feeds, rather, on envy, jealousy, bitterness, resentment.  And the threat of it is that, while markets build and destroy and rise again organically,  reductions of state interference in an economy do not, as Marx promised in his “long term,” wither away, but come at great political expense.  Such opportunities can only happen where, despite a period of maximized control, a class of citizens with stakes in the outcome, with unbroken optimism and just enough appetite for liberty manages to break out.

That’s going to happen, right?