In reply to “Socialism in the USA” by Carl P. Mitchell, published in the Daily American on Oct 14.
The term “socialism” tends to get thrown around a lot in our current public discourse, especially with the recent rises of the Tea Party and Occupy Wall Street. The Tea Party and OWS are two movements which, though they may appear starkly different, derive their concerns from one primary issue: large corporations lobby for the government to have more power, and in return the government enacts laws and regulations favorable to large corporations. In essence, large corporations request that the government coercively take private property, either directly via taxation or indirectly via regulations and statutes, and give it to these corporations. This is not socialism, which the right decries for its similar destruction of private wealth, but corporatism. Similarly, this is not capitalism, which the left decries for its muddled understanding of the role of government in the economy.
I agree with Mr. Mitchell that there is indeed much hypocrisy on the right concerning the role of government coercion, but what Mr. Mitchell misses – as do, unfortunately, many of the OWS protesters – is that the root of this problem is not the market, but the government.
Mr. Mitchell attacks the Tea Party and elements of the market system for their support of smaller government. He makes specific mention of the libertarian-philanthropist brothers Charles and David Koch. The Koch Brothers are to the far-left what George Soros is to the far right: boogeymen that have the most sinister of goals (usually the exact opposite of what the accusing label supports) and are ruthless in achieving it. The Koch Brothers provide countless opportunities to youth and academics around the country in engaging and improving their communities in various ways. The Kochs support intellectual, volunteer, and academic outings for individuals of various political and economic beliefs and have touched many lives in their investments.
Mitchell continues to lob ad hominem attacks at the Kochs, stating that their employees at chains such as Home Depot work in depraved working environments. A quick fact-check shows this to be false and that employees at Koch-owned chains enjoy average to above average pay and benefits.
Mitchell attacks the outsourcing of jobs as some sort of abstract class warfare; he pushes the concept that the market is a zero-sum game. The outsourcing of jobs is not some sort of evil scheme by corporations to do in the consumer, but it is actually what has made the standard of living so great in the United States and the Western World. Instead of wasting American resources on non-specialized fields or fields that require very little specialization, resources are outsourced, not only preserving the opportunity to pursue and invest in greater specialization at home but also for a lower cost than employing the non-specialization here.
“What about the ‘lost’ jobs?” Jobs are not lost and wealth is actually created. It is because of outsourcing that we are able to enjoy the great variety of goods at stores like Walmart for such a low price. If those goods were forcibly created at a higher price at home rather than abroad, then the difference in capital invested in the human capital and resources to create those goods would not only be lost, but the difference in the final costs at the store would be compounded. The final burden would fall on each and every consumer. Outsourcing, and the highly-specialized economy that it promotes at home is anything but evil; it is because of the free movement of labour that we can enjoy such affluent lives.
Moreover, Mitchell accuses that Koch Brothers of not only supporting the Tea Party, a group which is dedicated to downsizing government and has been ardently opposed to government bailouts and relief programs for corporations since its inception, but also being in cahoots with Wall Street in having “hoodwinked” the American people. His logic is paradoxical, especially once examined after observing the root of corporatism: the state.
Economic leftists employ a Hobbesian argument for regulation. Corporations own the government and must be regulated to prevent the accumulation of wealth and disparities. However, when asked who will regulate the corporations, the reply is that the government must do it.
If the government, the force of monopolized, “legitimate” coercion in society, is in bed with corporations, then how does one expect it to regulate corporations? Once regulation is seen as a necessity, government and large, powerful, corporations collude to create high barriers to entry into markets, coercive regulations, and lucrative bailouts, in order to establish a powerful oligopolies and monopolies within markets. As Chicagoan economist and Nobel laureate Milton Friedman noted in his book “Capitalism and Freedom,” monopolies and oligopolies cannot maintain themselves without the assistance of the state to crush competition and prop up their markets.
Having accepted the above argument, why would the Koch Brothers be behind Wall Street and the Tea Party? Why would the Kochs be attempting to diminish the very mechanism which allows for powerful corporations to gain benefits to start with?
The real issue is not any market or capitalistic system, but actually corporatism. Corporatism finds its roots in that coercive monopoly that we know as government. A reasonable understanding of the social contract would be the complete rejection of the state and the social contract.
It is the government, which derives its “power” from this social contract, that creates wealth disparities and crushes economic freedom and quality of life in its path. Systems which have rejected free-enterprise only fail and lead to greater wealth disparities, granted by government to a select few. The solution to ending corporatism, which both Occupy Wall Street and the Tea Party ought to agree upon, is to reject that which is the foundation of the coercion which leads to both socialism and corporatism: Leviathan. Only the acceptance of free and open trade with no favors granted by an all-powerful entity will create a truly fair economic system.