I continue to encounter many discussions in which the author or speaker
bemoans the economic order’s drift toward socialism or, in some cases, its
actual existence as such. If this characterization were simply a matter of
linguistic imprecision, it might not matter much. But it is much more than a
matter of terminology, because one’s understanding of the nature of our current
economic order hinges on how we characterize it.
Socialism is a system in which all the
major means of production are owned and operated by the state. Except perhaps
for small firms or farms, all productive enterprises are state enterprises. All
natural resources belong to the state. All resources are allocated and employed
as the state dictates, insofar as its dictates can actually be carried out in
practice (all such systems display much slack between orders given and actual
conduct on the ground, owing to corruption and attempts to “fix” flaws embedded
in the state’s overall plan).
Obviously the economic order that
prevails in the economically advanced countries is not socialism. Indeed, these
systems are commonly called capitalistic or market-oriented, notwithstanding
the many types of government intervention that pervade their
markets—various taxes, subsidies, direct government production, and regulations
galore. Some people refer to these systems as “mixed economies,” which at least
helps us to recognize that they are not market economies in any pure sense, not
even in an approximate one. But in calling them mixed economies, we gain no
insight into their nature or operation.
For thirty years or so, I have used the
term “participatory
fascism,” which I borrowed from my old friend and
former Ph.D. student Charlotte Twight. This is a descriptively precise term in
that it recognizes the fascistic organization of resource ownership and control
in our system, despite the preservation of nominal private ownership, and the
variety of ways in which the state employs political ceremonies, proceedings,
and engagements—most important, voting—in which the general public
participates. Such participation engenders the sense that somehow the people
control the government. Even though this sense of control is for the most part
an illusion, rather than a perception well founded in reality, it is important
because it causes people to accept government regulations, taxes, and other
insults against which they might rebel if they believed that such impositions
had simply been forced on them by dictators or other leaders wholly beyond
their influence.
For the rulers, participatory fascism is
the perfect solution toward which they have been groping for generations, and
virtually all of the world’s politico-economic orders are now gravitating
toward this system. Outright socialism is a recipe for widespread poverty and for the ultimate
dissolution of the economy and the disavowal of its political leadership.
Socialism is the wave of the past; everywhere it has been tried seriously, it
has failed miserably. Participatory fascism, in contrast, has two decisive
advantages over socialism.
The first is that it allows the nominal
private owners of resources and firms enough room for maneuver that they can
still innovate, prosper, and hence propel the system toward higher levels of
living for the masses. If the government’s intervention is pushed too far, this
progress slows, and it may eventually cease or even turn into economic regress.
However, when such untoward conditions occur, the rulers tend to rein in their
plunder and intervention enough to allow a revitalization of the economy. Of
course, such fettered economies cannot grow as fast as completely free
economies can grow, but the latter system would preclude the plunder and
control that the political leaders now enjoy in the fettered system, and hence
they greatly prefer the slower-growing, great-plunder system to the
faster-growing, no-plunder one.
Meanwhile, most people are placated by
the economic progress that does occur and by their participation in political
and legal proceedings that give them the illusion of control and fair
treatment. Although the political system is rigged in countless ways to favor
incumbent rulers and their key supporters, it is far from dictatorial in the
way that Stalin’s Russia or Hitler’s Germany was dictatorial. People therefore
continue to believe that they are free, notwithstanding the death of their
liberties by a thousand cuts that continues day by day.
Participatory fascism’s second great
advantage over socialism is that when serious economic problems do arise, as
they have during the past five years, the rulers and their key supporters in
the “private” sector can blame residual elements of the market system, and
especially the richest people who operate in that system, for the perceived
ills. No matter how much the problems arise from government intervention, it is
always possible to lay the blame on actors and institutions in the remaining
“free enterprises,” especially the biggest bankers and other apparent top dogs.
Thus, fascistic rulers have build-in protection against popular reaction that the
rulers in a socialist system lack. (Rulers under socialism tend to designate
foreign governments and capitalists and domestic “wreckers” as the scapegoats
for their mismanagement and inability to conduct economic affairs productively
and fairly.)
Americans do not like to admit that
they live in a system that is most accurately characterized as participatory
fascism. They insist that fascism requires death camps, goose-stepping brown
shirts, comical yet murderous leaders in funny hats, and others hallmarks of
the fascism that operated in Germany and Italy between the world wars. But
fascism takes many specific forms. If you wish to see the form that it has
increasingly taken in the economically advanced countries during the past
century, just look around you.
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