Capitalism, Socialism, and Confusion

My FB feed these days is full of people blathering about how Trump is going to save the country from the dreaded evil of socialism.  As evidence of how close we are to this disaster, they typically mention things like deficits and the national debt, or the various government programs to guarantee some minimal level of welfare to some group of people or another.  (Interestingly, no one who is upset about socialism seems to be concerned about the massive corporate subsidies the feds hand out.)  These people are confused.

     Here are a couple of simple truths about the US economic system.  First, there is no significant movement whatsoever towards collective ownership of the means of production.  Indeed, it does seem that ownership of the means of production is becoming more and more concentrated, but in the hands of fewer and fewer private owners, rather than in the hands of government.  Second, there is no significant movement whatsoever towards centralized economic planning.  Indeed, much contemporary economic regulation seems designed to prohibit government from doing anything to regulate private economic activity, no matter how socially destructive it might be.  This is not socialism

     And, of course, my FB feed suffers from no lack of people blathering about the wonders of socialism.  They see these glories in the expansive social welfare programs of the Western European democracies—healthcare, education, humane labor laws.  But here is another simple truth.  These “socialist” countries all exhibit private ownership of the means of production and decentralized economic decision making.  This is not socialism, either.

     This should surprise no one.  You simply cannot have the kind of expansive social welfare programs that one finds in Europe and that many American progressives envision without a vigorous capitalist economy.  Capitalism takes many forms, from corporatism to free markets; but without private property and decentralized economic decision making, there simply isn’t enough wealth to finance “socialism.”

     And here is another simple truth:  there is very little reason to think that Donald Trump is going to do anything at all about deficits and the national debt (except, perhaps, to increase them significantly).  Trump’s cabinet appointments—Mnuchin, Puzder, Tillerson, and so forth—leave little doubt that his administration will serve the interests of the rich.  And deficit spending is the most powerful tool the government has for serving those interests.

     It works like this.  First, everyone gets a tax cut; this helps the rich much more than anyone else, but this is hardly news.  Then, the government spends money like a drunken sailor.  This means much borrowing—from the rich (and foreign governments), because that is where the money is.   And then government gives this money back to the rich in the form of various subsidies disguised as social programs (Medicare Part D, Obamacare) and outsourcing of government functions (like war and prisons) and such.  Meanwhile, ideologues denounce government programs that actually give help to the needful.  And the taxes that everyone else pays go more and more to pay the interest on these loans, leaving less and less for schools and healthcare and such.

The Republicans are masters of this technique.  They like to characterize the Democrats as the party of tax and spend.  This is not unjustified; the Democrats understand that they must pay for what they want government to do.  The Republicans, on the other hand, are the party of borrow and spend.  And we the people are the collateral.

So I don’t think we can expect Trump to do much about “socialism.”  If anything, he is likely to con the country into a more authentic sort of socialism.  Old style socialism tried to bring economic decision making completely under the control of political institutions.  The example of the USSR suggests that the better this works, the worse it works.  Trump’s appointments suggest that he is trying to bring political decision making completely under the control of economic institutions.  Either way—whether the people with all the political power get all the economic power, or the people with all the money get all the political power—that old devil socialism is gonna git your dollar.