They used to call it "Fascism"

But now, it's somehow OK? Because Democrats are doing it?

The New American Corporate State
A troika of big government, big business and big labor is attempting to run the country to its own advantage.

Opponents of President Barack Obama and the Nancy Pelosi Congress will often accuse them of being "socialist." I find that this term is unhelpful, as many folks use direct government takeover of industrial enterprises as the litmus test for socialism, and thus will reject this hypothesis about the president. It is more useful to think of this administration as pursuing a European-style corporate state, a form of political economy that allows the state to exert strong control in the economy while maintaining a nominal façade of private ownership.

While the intellectual origins of the corporate state go back much further, the first serious attempt to implement such a system was in 1920s Italy by Benito Mussolini. Under that system, state-sponsored industry cartels programmed every aspect of economic life, from wages and working conditions to prices, production levels and product specifications. Nearly every commercial action required a government license, which would be denied to those who showed insufficient loyalty to the state and its goals.

[...]

In their current form, European corporate states tend to be more informal than their predecessors, drawing on mutually supporting networks of labor, industry and government leaders without the explicit structure of Mussolini's cartels or Roosevelt's code authorities. These networks are driven by an implicit deal by each of the three groups to protect their mutual interests and to recognize specific obligations.

In this three-way arrangement, unionized workers in key industries get high wages, guaranteed employment, rich pension systems and government protection from competition from younger and foreign workers. In return, they promise labor peace (barring the occasional strike to demonstrate their power) and tremendous election-day muscle.

Favored businesses (and by these we are talking about the top 20 to 30 largest banks and corporations in a particular country) get protection from competition, both upstart domestic entrepreneurs as well as any foreign rivals. In return, they provide monetary and political support for politicians' pet projects--from recycling to windmills--with the understanding that politicians will give them legislative back doors to recover the costs of these programs from customers or taxpayers.

In return for granting this largess to selected corporations and unions, government officials get to remain in power. Typically this arrangement appeals to parties on both the left and the right, such that the nominal ruling party may change but the core group in power remain the same.

The losers in all of this are ... everyone else. In effect this corporate system is just another age-old, historically time-worn effort to cement the power of a small group of elites. Entrepreneurship and innovation are often impossible, as incumbent businesses can call on tremendous state powers to stifle competitive threats. The unemployment rates of the young and unskilled can be astronomical, even in rich nations like Germany and France, as older unionized workers have worked to calcify labor markets to their own advantage. In the end, consumers and taxpayers pay for the whole system in the form of reduced growth and economic output, higher prices, higher taxes and less mobility for those not already in power. [...]

I see the same thing happening here. The article goes on to show the how and why of it.

It's not as direct or oppressive as Hitler's or Mussolini's type of fascism, though it does embody many of the same elements. Some would argue that the European Model is more flexible, and therefore more benevolent. Ironic then, that even the Europeans are now are cutting taxes, and urging the US to do the same. But their pleas are falling on deaf ears, as the Democrats seem hell-bent on moving us to the European Model. Or perhaps even something much worse.



   

Are We All Fascists Now? I'm talking about Economically, not Politically

And if we are, just what does that mean? Pat has done an excellent post about this: "We're all Facists now"

He has some excerpts from Michael Ledeen's two part article, where Ledeen comments on a piece published by Newsweek with the headline "We Are All Socialist's Now". Ledeen maintains we're not, and says that even the Newsweek article shows us that something else is going on:

[...] Socialism rests on a firm theoretical bedrock: the abolition of private property. I haven’t heard anyone this side of Barney Frank calling for any such thing. What is happening now–and Newsweek is honest enough to say so down in the body of the article–is an expansion of the state’s role, an increase in public/private joint ventures and partnerships, and much more state regulation of business. Yes, it’s very “European,” and some of the Europeans even call it “social democracy,” but it isn’t.

It’s fascism. Nobody calls it by its proper name, for two basic reasons: first, because “fascism” has long since lost its actual, historical, content; it’s been a pure epithet for many decades. Lots of the people writing about current events like what Obama et. al. are doing, and wouldn’t want to stigmatize it with that “f” epithet.

Second, not one person in a thousand knows what fascist political economy was. Yet during the great economic crisis of the 1930s, fascism was widely regarded as a possible solution, indeed as the only acceptable solution to a spasm that had shaken the entire First World, and beyond. It was hailed as a “third way” between two failed systems (communism and capitalism), retaining the best of each. Private property was preserved, as the role of the state was expanded. This was necessary because the Great Depression was defined as a crisis “of the system,” not just a glitch “in the system.” And so Mussolini created the “Corporate State,” in which, in theory at least, the big national enterprises were entrusted to state ownership (or substantial state ownership) and of course state management. [...]

Fascism is such a loaded word. But what we are talking about here is fascist economics, not fascist politics. It's an important distinction. However, such a situation contains unique dangers of it's own:

[...] The economics of the current expansion of state power in America are, as I said, “fascist,” but the politics are not. We are not witnessing “American Fascism on the march.” Fascism was a war ideology and grew out of the terrible slaughter of the First World War. Fascism hailed the men who fought and prevailed on the battlefield, and wrapped itself in the well-established rhetoric of European nationalism, which does not exist in America and never has. Our liberties are indeed threatened, but by a tyranny of a very different sort.

Most of us imagine the transformation of a free society to a tyrannical state in Hollywood terms, as a melodramatic act of violence like a military coup or an armed insurrection. Tocqueville knows better. He foresees a slow death of freedom. The power of the centralized government will gradually expand, meddling in every area of our lives until, like a lobster in a slowly heated pot, we are cooked without ever realizing what has happened. The ultimate horror of Tocqueville’s vision is that we will welcome it, and even convince ourselves that we control it. [...]

It often seems like we take freedom so for granted, that we don't even recognize it anymore, and therefore don't value it. So it's easily sacrificed in the name of security. But are we destined to find out that those who sacrifice freedom for security end up with neither? Must we rediscover what freedom is by losing it?

Ledeen goes on to compare Roosevelt’s New Deal and Mussolini’s Third Way, and the failures of both. We can learn from the mistakes of the past, instead of repeating them. Read the whole thing, it's your "must read" for the day.