The New Socialism
Over the past 30-35 years or so, the world as a whole has retreated from the high tide of state management of the economy that was reached around midcentury, and moved more in the direction of laissez faire. But I think it’s fair to say that though the trend has been perfectly general, the political leadership in this movement has tended to come from Washington and London, where Ronald Reagan and Margaret Thatcher were the loudest and clearest exponents of it and their successors on the center-left tended to confirm, rather than reverse, a new Anglophone consensus. And yet:
The British and American plans, though far from identical, have two common elements according to officials: injection of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans. [...] The Treasury’s openness to direct infusions of cash is a remarkable change in tone from a few weeks ago, when the Treasury secretary, Henry M. Paulson Jr., and the Federal Reserve chairman, Ben S. Bernanke, discouraged such actions in testimony before Congress. “Putting capital in institutions is about failure,” Mr. Paulson declared on Sept. 23. “This is about success.”
This is what a lot of left-of-center economists said in the first place, but the ideological taboo against nationalization was very strong. Now, though, the forces of looming collapse in the banking sector are proving even stronger. Thus, it looks like it’ll be George W. Bush, Hank Paulson, and Ben Bernanke who bring a very strong dose of socialism to the United States of America. And yet Andy McCarthy’s busy worrying if Barack Obama is a closet Maoist.
25 Responses to “The New Socialism”
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October 10th, 2008 at 9:12 am
The thing is, this “socialism” will ideally be very temporary. It’s not like nationalizing the banks because you think the government will do a better job of running them in the long term.
October 10th, 2008 at 9:14 am
Sounds like those developing countries in Latin America were right when they initiated efforts to resist neoliberalism and instead ‘pinken’ the region in the past five years or so. We should have followed their lead.
October 10th, 2008 at 9:17 am
I disagree with the premise–for example, to the extent the Scandinavian countries have retreated a bit from “socialism” in recent decades, I don’t think that was as a result of British and American political leadership. Rather, they were just being pragmatic.
Which to me is somewhat comforting, because while it is true that Americans are suddenly receptive to a lot more “socialism” than just weeks ago, let alone months or years ago, would have suggested, I don’t think that is going to touch off a return to real socialism around the globe.
October 10th, 2008 at 9:19 am
The Gipper speaks — Reagan for Obama — Must See TV!
http://www.youtube.com/watch?v=IqfedYAAGEI
October 10th, 2008 at 9:31 am
Thus, it looks like it’ll be George W. Bush, Hank Paulson, and Ben Bernanke who bring a very strong dose of socialism to the United States of America.
Assuming they don’t just blow the thing up first.
max
['I'd think it might be better called spasticism.']
October 10th, 2008 at 9:33 am
I, for one, will take some comfort and amusement in the utter incoherent stupidity of the far right when I’m roasting rotten potatoes and drinking sterno under a desolate highway bridge a couple years from now.
October 10th, 2008 at 9:36 am
Moving away from socialism generally has meant moving from collective responsibiity towards individual responsibiity. But responsibiities go hand in hand with obligations, so capitalism can only be described as laissez faire when the obligations are not enforced (as has been the case over the last decade or so).
Socialism is still a dead end, since human nature dictates everyone is primarily looking out for nr 1. All we need to do is have is stricter rules and work harder, and we’ll be ok.
October 10th, 2008 at 10:49 am
Just wanted to say, I’m reading this in a Chinese coffee shop, and I pointed the Mao picture out to a Chinese girl sitting next to me, and she said, “Jiang Zemin?”
You had to be here, maybe. It was pretty awesome.
October 10th, 2008 at 11:00 am
Well, it’d give Jonah Goldberg another book to write: Liberal Maoism.
Anyway, it’d be pointless setting up re-education camps for the NRO writers anyway: some people are uneducatable.
October 10th, 2008 at 11:27 am
In Chile in the late 70s a bunch of Chicago-trained economists spearheaded a wave of privatization that was so disastrous that the companies had to be quickly renationalized. This lead some local wag to coin the phrase “the Chicago way to Socialism.” Perhaps in the US we’ll now have the “Bush way to Socialism.”
October 10th, 2008 at 1:34 pm
It is only socialism if the goverment actively manages the banks affairs in detail or if it plans to keep them.
During the early 90s banking crisis in Norway many, perhaps even most, banks were nationalized partially or fully nationalised. IIRC the nationalization was done by the conservative goverment while it was later labour goverments that sold them off, making a profit. (I am sure there exist information about this crisis on the internet. However given the current crisis and the 90s Swedish bank crisis I have not been able to come up with search terms that give me any relevant information.)
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