Is Barack Obama really a socialist?
- 11-03-2008, 10:12 AM
Is Barack Obama really a socialist?
Is Barack Obama really a socialist?
Not exactly, but his 'socialist-lite' policies should still be cause for concern.
By Donald J. Boudreaux
from the October 30, 2008 edition
Fairfax, Va. - Since telling Joe the Plumber of his wish to "spread the wealth around," Barack Obama is being called a socialist. Is he one?
No. At least not in the classic sense of the term. "Socialism" originally meant government ownership of the major means of production and finance, such as land, coal mines, steel mills, automobile factories, and banks.
A principal promise of socialism was to replace the alleged uncertainty of markets with the comforting certainty of a central economic plan. No more guessing what consumers will buy next year and how suppliers and rival firms will behave: everyone will be led by government's visible hand to play his and her role in an all-encompassing central plan. The "wastes" of competition, cycles of booms and busts, and the "unfairness" of unequal incomes would be tossed into history's dustbin.
Of course, socialism utterly failed. But it wasn't just a failure of organization or efficiency. By making the state the arbiter of economic value and social justice, as well as the source of rights, it deprived individuals of their liberty – and tragically, often their lives.
The late Robert Heilbroner – a socialist for most of his life – admitted after the collapse of the Iron Curtain that socialism "was the tragic failure of the twentieth century. Born of a commitment to remedy the economic and moral defects of capitalism, it has far surpassed capitalism in both economic malfunction and moral cruelty."
This failure was unavoidable. It was predicted from the start by wise economists, such as F.A. Hayek, who understood that no government agency can gather and process all the knowledge necessary to plan the productive allocation of millions of different resources.
Likewise, socialism's requirement that each person behave in ways prescribed by government planners is a recipe for tyranny. A central plan, by its nature, denies to individuals the right to choose and to innovate. It replaces a multitude of individual plans – each of which can be relatively easily adjusted in light of competitive market feedback – with one gigantic, monopolistic, and politically favored plan.
A happy difference separating today from the 1930s is that, unlike back then, no serious thinkers or groups in America now push for this kind of full-throttle socialism.
But what about a milder form of socialism? If reckoned as an attitude rather than a set of guidelines for running an economy, socialism might well describe Senator Obama's economics. Anyone who speaks glibly of "spreading the wealth around" sees wealth not as resulting chiefly from individual effort, initiative, and risk-taking, but from great social forces beyond any private producer's control. If, say, the low cost of Dell computers comes mostly from government policies (such as government schooling for an educated workforce) and from culture (such as Americans' work ethic) then Michael Dell's wealth is due less to his own efforts and more to the features of the society that he luckily inhabits.
Wealth, in this view, is produced principally by society. So society's claim on it is at least as strong as that of any of the individuals in whose bank accounts it appears. More important, because wealth is produced mostly by society (rather than by individuals), taxing high-income earners more heavily will do little to reduce total wealth production.
This notion of wealth certainly warrants the name "socialism," for it gives the abstraction "society" pride of place over flesh-and-blood individuals. If taxes are reduced on Joe the Plumber's income, the rationale must be that Joe deserves a larger share of society's collectively baked pie and not that Joe earned his income or that lower taxes will inspire Joe to work harder.
This "socialism-lite," however, is as specious as is classic socialism. And its insidious nature makes it even more dangerous. Across Europe, this "mild" form of socialism acts as a parasitic ideology that has slowly drained entrepreneurial energy – and freedoms – from its free-market host.
Could it happen in America? Consider the words of longtime Socialist Party of America presidential candidate Norman Thomas: "The American people will never knowingly adopt socialism, but under the name of liberalism, they will adopt every fragment of the socialist program until one day America will be a socialist nation without ever knowing how it happened." In addition to Medicare, Social Security, and other entitlement programs, the gathering political momentum toward single-payer healthcare – which Obama has proclaimed is his ultimate goal – shows the prescience of Thomas's words.
The fact that each of us depends upon the efforts of millions of others does not mean that some "society" transcending individuals produces our prosperity. Rather, it means that the vast system of voluntary market exchange coordinates remarkably well the efforts of millions of individuals into a productive whole. For Obama to suggest that government interfere in this process more than it already does – to "spread" wealth from Joe to Bill, or vice versa – overlooks not only the voluntary and individual origins of wealth, but the dampening of the incentives for people to contribute energetically to wealth's continued production.
• Donald J. Boudreaux is professor of economics at George Mason University. He is the author of "Globalization."
- 11-03-2008, 10:20 AM
so interestingly enough
If, say, the low cost of Dell computers comes mostly from government policies (such as government schooling for an educated workforce) and from culture (such as Americans' work ethic) then Michael Dell's wealth is due less to his own efforts and more to the features of the society that he luckily inhabits.
To me this socialism lite is acually far worse than socialism. not because of its insidiousness, but because it is parasitic. In true socialism at least, the government controls the means of production rather directly and so is able to cause the GDP to grow. In this sort of socialism lite the goverment merely siphons money off. Right now 20% of our GDP goes back to the government to largely not do anything that creates any of the GDP. back in the 1930s, it was around 3% of GDP. Each uptick in that means less of the GDP to be reinvested into things that directly grow the GDP.
11-03-2008, 10:34 AM
Federalist, Interventionist, Keynesian, these are labels which very clearly apply to Obama; Socialist, though, is not one of them.
Now, what is this true form of Socialism I refer to and, most importantly, how does it differ from the popular conceptualization. To address that, let me put forward an illuminative caveat about Marx's work: Socialism is not at heart a political, or governmental system, it is a Socially-Economic one - that is, it is first and foremost a Labour movement. What, then, is illuminative about this point:
a) Redistribution of Income - a popular derogatory catchphrase often used by EasyEJL and yourself, it is meant to convey a 'redistribution' of personal income vis-a-vis government taxation reform; however, this has little-to-nothing to do with a Marxian conceptualization of Redistribution of Wealth. First and foremost, 'wealth' and 'income' are being interchangeably used here to denote the same form of Capital; quite simply, they are not. In fact, in both Das Kapital and A Contribution to a Critique on Political Economy Marx makes almost no mention to individual taxation to redistribute moneys in the form of income. Why, though? Simply because Marx did not view moneys as a primary source of Wealth (i.e., accumulated Capital); in that respect, constant and variable Capital (means of production differentiated to non-human and human labour respectively) are the primary source of new value in Marxian Economics. Income is an end-point function of Capital exchange, whereas Wealth is a primary accumulation of new value - in a Marxian sense, they are not interchangeable.
So - despite the fact Marx rarely, rarely used the term Redistribution of Wealth for the aforementioned reasons - Redistribution of Wealth in a Marxian sense means fundamentally altering what he felt to be the appropriative relation between Capitalist and Labourer - i.e., to rebuke the control of the capacity to work - itself a form of Private Property - of the Labourer from the Capitalist, and make it a Social good: To 'Socialize' (in a literal sense) the Means of Production (literally the human capacity to labour). It has nothing to do with personal taxation, and merely means establishing a more equitable relationship between those who control the Means of Production and dictate the Social Relations of production and; those who carry out the collective activities which comprise them.
b) State Administration of the Means of Production - This may be another illuminative point in respects to Marx: He despised Nationalism as he though it was merely another tired, romantic means of oppressing the proletariat. As I stated above, Socialism is not a political movement, but a Labour movement.
It is also in the misuse of this concept where people their most glaring ineptitudes about Marx's concepts. I have often seen individuals say, "I don't want my government telling me what I can eat, what I can say, where I can dance" as they equate this inhibitory role of government to Socialism; in fact, that is in no way Marx's Socialism, but rather: Totalitarianism - they are not one in the same. In fact, Marx viewed man's propensity to make music, to fraternize, to engage in collective social activities as one of the most unfortunate casualties of Capitalism: he felt as these things are readily commodified, they too become a force alien to the natural man - a mere commodity. In actual fact, Socialism, in his eyes, is: "The full realization and actualization of each man in his natural capacity".
The events which transpired from 1918 onward were more of Lenin's design than Marx's: Marx simply did not address the specific political form of a Worker's Union State, and Lenin elaborated given the specific socio-historical context of Russia at the time. The later events of the Stalin-led U.S.S.R., were even more disconnected with the work of Marx. Simply put, 'Nationalization' was a despised concept of Marx. and even a cursory glance at his simplest work, "The Communist Manifesto" would reveal this; the last line reads as follows:
Workers of the World unite!
That single line is probably the most succinct explanation of his theory possible; he literally was a 'working man's' scholar; his entire goal was to eradicate labour exploitation.
11-03-2008, 10:56 AM
quite true, but what do you think of the effects on gdp (particularly gdp/capita) growth on attempting to place socialistic policies in place on top of a free market system, particularly providing a floor level of living including health coverage for all citzens?
11-03-2008, 11:39 AM
11-03-2008, 02:18 PM
11-04-2008, 06:45 PM
He is not socialist, but his policies on healthcare lean that way. Take this scenario: A crack dealer is shot in the leg upon evading police. (they find guns, crack, dope, needles, pipes and other evidence on his person). The bullet passes through his femoral artery, and he is taken to the ER. Upon taking him to the hospital the doctors find that he has no health insurance, as the crack industry does not provide health benefits.
Under Obama's plan, our taxes will pay for the $10,000 dollar treatment.
Pros: He gets a second chance at life. He could go on to get out of jail and tell kids not to smoke crack. (rare)
Cons: He gets a second chance at life. He gets out of jail, sells more crack, gets shot in his other leg, and we pay another $10,000. (most likely)
Under McCain, he's screwed.
Pros: Less incentive for crack dealers to sell crack and run from police, leads to less crime and crack use.
Cons: Case is never taken to court, police can be accused of killing an innocent man.
Now read about socialism, and prove to me that the government giving out free healthcare is capitalist.
11-04-2008, 07:14 PM
Take this scenario: A crack dealer is shot in the leg upon evading police. (they find guns, crack, dope, needles, pipes and other evidence on his person). The bullet passes through his femoral artery, and he is taken to the ER. Upon taking him to the hospital, the doctors discover the drug industry pays incredibly well and he is able to afford his own private insurance.
Take this scenario: A 45 year old single, working-poor mother is shot in the leg as an accidental target of a drive-by shooting. The bullet passes through her femoral artery, and she is taken to the E.R. Upon taking her to the hospital, the doctors find that she has no health insurance, as the food industry does not provide health benefits.
Now, you read about Socialism and tell me how anything you said relates to Socialism and not your concept of Maoism and/or Stalinism and/or Leninism and/or Trotskyism.
See how that works both ways?
11-04-2008, 09:13 PM
Actually, McCain would give working people like this a $2,500
tax credit to pay for health insurance. You can get get cheap health insurance for $145/month, which she could easily afford. Also, I worked in the food industry a year ago as a dishwasher and they did provide health benefits for families. Also, if your 45 and you work for the food industry and cant afford health insurance, you took some wrong turns and you have had plenty of opportunities to better yourself.
And crack dealers don't make as much as you would think. Nobody sells weight in crack.
11-04-2008, 09:47 PM
However, a few things of interest:
a) Explain to us how giving $2500 to each family which is derived directly from personal income tax is not equally as 'Socialist'.
b) Crack does pay well, believe me. An ounce, if purchased in the right places, is as little as $400-600 and can be flipped for $2000+ if sold in the proper quantities and markets. $1400 profit on every ounce with a profitable dealer purchasing a LB at a time (16oz) pays very well. You may not have your facts straight.
c) So, I assume then, you know every single individual who is 45 years old and working in the food industry? And, further, you are aware of every set of possibilities which may lead to that outcome and are thereby comfortable in making such a broad assertion?
Each plan can be painted as equally bias, equally harmful to the economy and the constituents thereof; which you feel is better depends almost completely on personal perception - namely, whether you feel Liberty or Equality should be privileged in a governmental system. So, please, attempting to propagate one as objectively better than the other is ridiculous.
11-04-2008, 10:55 PM
With the crack, your right, but think about their expenses, competition, and how long it takes, getting robbed. The fastest an ounce is going is 3-4 days. So if you hustle that right, yes you can make plenty of money. However, selling that much is going to attract attention, thus attracting a bullet to your femoral.
Yes, actually I do know EVERY person in the food industry, we are all connected in a secret underground network in which we are planning world domination. We put xanax in the food and prozac in the water.
11-04-2008, 10:57 PM
11-05-2008, 08:56 AM
What expenses? A good dealer needs a car and a cell phone. With those, an ounce can be sold in a day, easily. I am from a semi-rural town in Alberta, Canada and I have seen QPs flipped in 3-4 days, never mind ounces.With the crack, your right, but think about their expenses, competition, and how long it takes, getting robbed. The fastest an ounce is going is 3-4 days. So if you hustle that right, yes you can make plenty of money. However, selling that much is going to attract attention, thus attracting a bullet to your femoral.
At any rate, the issue in flipping your comparison was to elucidate that both approaches have unintended consequences: In a Universal Plan, more "bad" people will be assisted; while in a Private Plan, more "good" people stand to be screwed. As I said, neither is better, as better implies objective standards, and such issues are fundamental discourses on human nature.
11-05-2008, 09:42 PM
11-06-2008, 03:41 AM
Enron/Worldcom and the recent sub-prime fiasco are examples of failures of capitalism; some regulation is required. Government establishes the infrastructure by which people and companies can acquire wealth. Therefore smart investment in that infrastructure can yield positive returns to citizens. This is also why running a deficit is not necessarily a bad thing. People frequently borrow money to start or expand a business. As long as the ROI is larger than the interest payments, it is a good investment. Similarly, as long as the net national product outpaces the deficit, then it can be good policy.
What I am getting at is that declaring politicians (or policies) capitalist and socialist, at least IMO, is not all that productive.
Last edited by Nitrox; 11-06-2008 at 12:40 PM.
11-06-2008, 08:48 AM
A welfare state doesn't mean a country is socialist.
In Australia we have a universal health care system where you receive proper health care whether you are a drug dealer or an upstanding citizen because national health is a priority of the government and the right of the citizen.
In the US you have the most expensive health care system in the world with the poorest coverage of the populace because the freedom of the market is the priority of the government despite manifest inequality and suffering by the nations citizens.
11-06-2008, 09:49 AM
however in the US we have the greatest purchasing power per person so that people can afford to buy the insurance, they just choose not to in place of luxury items. The people who truly can't afford insurance already have the accessibility to free coverage.
11-06-2008, 01:04 PM
I am not going to claim to know the exact structure of health care in the US but I understand that there are for-profit levels in it. The added profit margin is something that you have to pay for. While this may encourage efficiencies it can also encourage cutting corners as well. So the question is: does privatized health care reduce costs more than the added profit margin without sacrificing quality of care?
Any truth to the horror stories of HMOs denying coverage?
Again, not saying that this is a simple yes or no argument. However, once external costs, ethics, and especially human nature, I do not find loosely regulated privatized health care all that appealing.
11-06-2008, 08:12 PM
A piece of the issue as well is "what do you consider healthcare". Should it be catastrophic only? Or should it cover wellcare and all doctor visits and prescriptions? I'd be much more amenable to a catastrophic only insurance.
That has been a piece of spiraling health care costs in the US, the expectation that basic services be provided as a part of health insurance. My wife had a kidney stone, and her doctor wrote a "prescription" for an MRI. If I had to pay for that out of pocket, I would have called around, checked prices, looked online for better business bureau rankings and other peoples reviews of it, and made a decision based both on cost and quality. Instead we just went to the one the doctor recommended.... Who knows what they charge, what the insurance company allows, how it all works out behind the scenes.
11-06-2008, 08:18 PM
as far as purchasing power goes, I used online statistics about it, and the US does have the highest I believe followed by China, can't recall who is third.
And the HMO horror stories, well some are true, but I can understand the HMOs as well. Recall that its not just a case of them keeping their profit high, but also controlling their costs. If they lay out more money in a year, it means premiums have to go up. With the advances in modern medicine there are now hundreds of diseases that were considered untreatable 30 years ago, that now are treatable. The probelm is that with many the treatments aren't cheap either, and many of them are somewhat experimental as well. So I think a number of the horror stories come from that, and well the squeaky wheel gets the grease and the horror stories come out yet nobody talks about the millions of people who have babies in an HMO and pay $20 copay at the first prenatal visit and have no further costs till the baby's first pediatrician appointment....
11-06-2008, 08:21 PM
11-06-2008, 08:30 PM
I agree that both the healthcare system as well as financial could benefit the public greatly by receiving regulations that create more transparency. Its amazing to me that pharmaceutical companies advertise everywhere (at great cost) plus have representatives whose 6 figure job it is to drive around in a company car to provide free samples to doctors in the attempt to get the doctors to write more prescriptions for those products. How much does that add to the cost for those that buy the medications? I'd like to know, and regulations that would force disclosure of things like that would be very helpful i think
That was one of McCains platform pieces that got little to no attention, his plan to very directly publicize on the web senators and house members who were stuffing pork into bills. Hopefully given his success with other internet venues Obama will do some of the same.
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