Socialism vs Corporatism

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by Ron Paul: Against
Anti-Civilian Sanctions

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many have characterized this administration as socialist, or having
strong socialist leanings. I differ with this characterization.
This is not to say Mr. Obama believes in free-markets by any means.
On the contrary, he has done and said much that demonstrates his
fundamental misunderstanding and hostility towards the truly free
market. But a closer, honest examination of his policies and actions
in office reveals that, much like the previous administration, he
is very much a corporatist. This in many ways can be more insidious
and worse than being an outright socialist.

Socialism is
a system where the government directly owns and manages businesses.
Corporatism is a system where businesses are nominally in private
hands, but are in fact controlled by the government. In a corporatist
state, government officials often act in collusion with their favored
business interests to design polices that give those interests a
monopoly position, to the detriment of both competitors and consumers.

A careful examination
of the policies pursued by the Obama administration and his allies
in Congress shows that their agenda is corporatist. For example,
the health care bill that recently passed does not establish a Canadian-style
government-run single-payer health care system. Instead, it relies
on mandates forcing every American to purchase private health insurance
or pay a fine. It also includes subsidies for low-income Americans
and government-run health care “exchanges.” Contrary to
the claims of the proponents of the health care bill, large insurance
and pharmaceutical companies were enthusiastic supporters of many
provisions of this legislation because they knew in the end their
bottom lines would be enriched by Obamacare.

Obama’s “cap-and-trade” legislation provides subsidies
and specials privileges to large businesses that engage in “carbon
trading.” This is why large corporations, such as General Electric
support cap-and-trade.

To call the
President a corporatist is not to soft-pedal criticism of his administration.
It is merely a more accurate description of the President’s

When he is
a called a socialist, the President and his defenders can easily
deflect that charge by pointing out that the historical meaning
of socialism is government ownership of industry; under the President’s
policies, industry remains in nominally private hands. Using the
more accurate term — corporatism — forces the President
to defend his policies that increase government control of private
industries and expand de facto subsidies to big businesses. This
also promotes the understanding that though the current system may
not be pure socialism, neither is it free-market since government
controls the private sector through taxes, regulations, and subsidies,
and has done so for decades.

Using precise
terms can prevent future statists from successfully blaming the
inevitable failure of their programs on the remnants of the free
market that are still allowed to exist. We must not allow the disastrous
results of corporatism to be ascribed incorrectly to free market
capitalism or used as a justification for more government expansion.
Most importantly, we must learn what freedom really is and educate
others on how infringements on our economic liberties caused our
economic woes in the first place. Government is the problem; it
cannot be the solution.

the Ron Paul File

27, 2010

Dr. Ron
Paul is a Republican member of Congress from Texas.

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