Pressing the Panic Button: Conservative Paranoia on the Question of Socialism

The Radical Right is at it again, stoking the flames of anger and fear. This time, not just Tea Party folk but major Republican figures and commentators as well. There are books to sell and votes to win by telling America that the end of the world looms – looms, that is, unless stopped by a revitalized conservatism led by the paranoid. Election season is in full swing, and the Right is telling stories – frightening stories, stories that do real damage, stories that need to be challenged, stories like this one.

The “socialism is coming” story.

“America as we know it,” according to Newt Gingrich, “is now facing a mortal threat.”[i] Having won the Cold War, we are apparently poised to lose the warm peace. Why? Because America is being taken over by a shadowy elite of academics, media people, union leaders, trial lawyers, state bureaucrats and liberal Democrats – all determined to take America off in a secular-socialist direction. Stopping that is what Gingrich calls his crusade to save America.

He is not alone in his zeal to save us. He shares it with Sean Hannity who, convinced that “Obama stands for a classic socialist agenda”, found the campaign of “Obama the socialist” to be full of “anti-capitalist statements”: understandably so since “the powerful influence of Marxist parents and mentors is just too much for certain people to resist.”[ii] Socialism, not freedom, is said to be on the march in modern America. It must be, because Glenn Beck found it in the health care reform – commenting on the debate he repeatedly labeled the changes he opposed as Marxist, communist and socialist in kind[iii] – and Glenn Beck is never wrong. There is unity on the Right on this: mortal danger, alien ideologies and the prospect of socialism – collectively constituting what New Gingrich has labeled America’s “existentialist threat”.

The policies of the Left are clearly socialist….They have taken over AIG, America’s largest insurer. They took over General Motors and Chrysler. They dominate banks. They have a “pay czar” in the White House to dictate salaries at ostensibly private companies. These actions are consistent with a socialist vision of America where the government defines and dominates the private sector….The left-wing Democrats who currently control the White House, the House of Representatives, the Senate, and many state capitals are committed to a secular-socialist ideology that is alien to America’s history and traditions. [iv]

There is but one very large problem with this argument. It happens to be total nonsense.

Even though Gingrich, Hannity and Beck argue otherwise, the truth is that America is not going socialist and that what the Obama administration is doing is not anti-American. It is actually pro-capitalist and fully in the American tradition.

Not Socialism

1. As political programs, socialism and communism aim to curtail and ultimately end the private ownership of major industries. They aim to put the working class in power, replacing the power of the owners of capital. Under socialism, wages are meant to go up and profits are meant to go down. But none of this is actually happening in Obama’s America. Obama’s bailouts were designed to save the private owners of major industries, not to replace them. Whatever partial degree of state ownership was reluctantly deployed, it was kept only so long as it made a profit for the taxpayer. And part of that profit came from the lower wages and greater unemployment of ordinary workers in the industries so saved. Whatever else Obama was and is doing with his industrial policy, emancipating the American working class by introducing socialism is no part of it.

1. Nor are bailouts of industries, or government regulation of wages and investment, necessarily left-wing, as Gingrich would have them. Conservatives in power do those things too. In fact, there have been periods in recent history in which bailouts and regulation have been the stock-in-trade of every major conservative government across the advanced capitalist world with the possible exception of this one. The Japanese economy was reconstructed in the post-war years – turned into the second most successful capitalist economy on earth – under “administrative guidance” (using the industry ministry MITI) dispensed by a government that was entitrely center-right in philosophy. French Gaullists regularly use state power to protect French industries – Nicholas Sarkozy is doing so again now;[v] and German Christian Democrats subsidized German coal mines enthusiastically through the 1980s: the very years in which Margaret Thatcher cut subsidies and effectively shut the UK mining industry down. Only ideologically-blinkered conservatives like her believe state direction of industry is inherently wrong. More pragmatic conservatives direct industry whenever it is necessary.

1. The financial crisis of 2008 certainly made federal intervention necessary, at least for a time. Even Henry Paulson saw that – and he was, and is, no socialist. Is Newt Gingrich really pretending that the drying up of credit flows in the wake of the collapse of Lehman Brothers was something that no government should have intervened to prevent? If he is, he is flying in the face of overwhelming evidence that, without intervention, the recession would have been even more traumatic and prolonged than it is proving now to be. There is “free market capitalism” out there; there is “managed capitalism”; and there is “socialism”. Managing something to make it work better is an alternative to replacing it, and Newt Gingrich would do well to recognize that. The repetition of nonsense does not make the nonsense any less false!

Not un-American

1. It is also equally ridiculous to pretend that aiding industry is somehow un-American. How can it be when vast numbers of American private companies rely on little else than government contracts, and when those companies include major engineering firms like Boeing and conglomerates like Halliburton. The US equivalent of the Japanese MITI has been, and remains, the Pentagon and NASA. For perfectly understandable reasons, given the world role of the American state, the entire US arms industry depends on the very working relationship between politics and business that Gingrich would dismiss as unpatriotic and un-American. As long ago as 1982, Gerald Adams called that relationship “the iron triangle”[vi]; and that triangle remains in place today. Certainly Washington is currently replete with lobbyists keen to have politicians of both parties fill legislation with earmarks that will bring peace and prosperity to the US armaments industry and to the US armaments industry alone. In 2006 the Department of Defense spent a cool $11.8 billion on applied research and development, a 54 percent increase on the amount spent just five years before.[vii] That is not socialism. That is military Keynesianism, American-style.

1. It’s not just the arms industry who receive all this federal largesse. There are also huge flows of federal funds to private companies in industries as disparate as agriculture, transport, energy, and housing. The Cato Institute’s Stephen Slivinski reported the federal government as spending $92 billion in direct and indirect subsidies to US companies in fiscal year 2006 ($92 billion in a year in which the Bush-Cheney White House was in full flow). That included $21 billion in agricultural subsidies, mainly going to corporate agribusiness and the richest farmers. It also included ATP Awards to Fortune 500 companies like IBM, General Electric, Honeywell, Xerox and Dow Chemical.[viii] With David Vogel, we do well to remember that “virtually all the sectors in which American industry continues to enjoy a competitive advantage – from aircraft to pharmaceuticals to biotechnology – have been the beneficiaries of direct and substantial government assistance.”[ix] This is not socialism, nor is it anti-Americanism: it is American crony capitalism in all its glory.

Subsidizing American industry with tax payer dollars is as American as apple pie. Next time you eat one, remember: the apples are subsidized, and so are most of the the ingredients in the pastry – certainly the butter and definitely the flour! Time for Newt Gingrich to calm down and eat pie – apple or humble, whichever is less subsidized.

David Coates holds the Worrell Chair in Anglo-American Studies at Wake Forest University. He is the author of Answering Back: Liberal Responses to Conservative Arguments, New York: Continuum Books, 2010.

He writes here in a personal capacity.

This entry was posted on Tuesday, June 1st, 2010 at 4:47 pm, was written by David Coates, and is filed under US Blog. You can leave a response, or trackback from your own site.