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Thursday, April 22, 2010

Is Obama a Socialist?

More like a corporatist.

In an April 14 Washington Post column , Norman Ornstein of the American Enterprise Institute, a conservative think tank, took issue with conservatives (and presumably some libertarians) who call President Obama a socialist.  Ornstein’s counterargument largely consisted of demonstrating that most of Obama’s policies, from health care to the “stimulus” to foreign policy, were based on ideas proposed by conservatives or Republicans, or passed with their cooperation or approval.  He concludes:  “This president is a mainstream, pragmatic moderate, operating in the center of American politics; center-left, perhaps, but not left of center.” In other words, he is not “the most radical president in American history.”

There is much that is interesting in this argument, but I want to focus on two related points.  First, I agree with Ornstein that Obama is not a socialist, at least not in the usual ways that term is used.  However, that hardly means his ideas are not of concern, lying as they do toward the center of American politics.  What Ornstein misses, and this is my second point, is that the very fact that Obama’s policies are supported by Republicans should be what makes us even more concerned about this presidency.

Obama isn’t really a socialist, but he is, like most of Democrats and Republicans, a corporatist, if not an economic fascist.  Unfortunately, the “center” of American politics, or the intersection of where so-called liberals and conservatives agree, is not a pretty place. It’s full of underlying beliefs and assumptions that are inimical to liberty.

So why isn’t he a socialist?  Even though many of Obama’s critics have thrown that word at him, it really doesn’t fit, even if it carries rhetorical punch.  We’ve yet to hear him argue for nationalization of the means of production.  We’ve yet to hear him argue that markets are to be rejected as the primary means of economic coordination.  Yes, he has his doubts about markets and has presided over the nationalization of parts of the auto and banking industry, but there’s nothing in any of those actions to suggest he thinks government ownership is so desirable that it should be expanded to other industries.  In fact, he’s gone out of his way to praise (what he believes he understands as) “free markets” and deny that he wants to eliminate them.

And it’s that very lip service to markets that shows him as something other than a socialist.  Talking the talk of “free markets” but proposing policies that mostly amount to collaborations between well-placed private-sector interests and the State is the hallmark of “corporatism,” or “state capitalism,” or even economic fascism.  From the bailouts of the banking system to “green jobs” to health insurance “reform” to various pieces of the “stimulus,” the real winners from the Obama administration’s policies (and Bush’s before him) have been those in corporate world lucky enough to be in the favored industries and to have sufficient political connections to benefit from the changes.

Rather than take over various industries, Obama seems to believe he can work with industry leaders and labor to negotiate and manage them collectively in the national interest.  This is the essence of the “third way” of Italian Fascism.  It is not socialism, as private ownership is nominally maintained, but it is not capitalism, since private owners are not fully allowed to make independent decisions based on perceived profitability.  Those decisions must take a back seat to predetermined  national priorities.

Again, consider the health insurance package.  It’s not a single-payer system, which would arguably be more truly socialist.  Instead, we will have a system of nominally private insurance companies heavily regulated and controlled so that they serve political goals, such as trying to guarantee that everyone has insurance regardless of income or medical history.

Viewed through this lens, it should be no surprise that Obama really does sit in the corporatist/fascist “center” of American politics.  The Republicans have been playing this same game for years, just in different industries.  Consider the way in which well-connected firms have benefited from the wars in Afghanistan and Iraq, whether it be the manufacturers of arms or “private” security companies hired to do the State’s bidding.  Many Republicans have long supported various limits on international trade as well as subsidy and quota systems in agriculture.  Here, too, those with the right connections are the winners in the collaboration between “capitalists” and the State.  For Republicans and conservatives to suddenly call Obama a socialist for doing more or less what they’ve been doing for decades is the height of hypocrisy.

The real problem here is that the line of scrimmage in American politics has moved so far from the end zone of freedom that what looks to observers such as Norman Ornstein like the moderate center is in fact a place very hostile to the liberty on which our prosperity and peace depend.

Obama is no socialist, but he, like just about everyone else in Washington, shares the presumption that he knows better and can — in collaboration with those he sees as the “right people” in the private sector — better run our lives than we can.

If that’s the pragmatic middle, call me an extremist.

  • Steven Horwitz was the Distinguished Professor of Free Enterprise in the Department of Economics at Ball State University, where he was also Director of the Institute for the Study of Political Economy. He is the author of Austrian Economics: An Introduction.