The State of Political Economic Definitions
Yesterday ED got a good conversation going in response to this question:
How can anti-statists reconcile themselves with protectionism?
I think however we need to be careful with the ‘s’ word. I’m guilty of throwing it around (on this site even) myself, so I’m not picking on Bro Erik here. I think a lot of us in this politico-blogo world toss it around.
Statism is technically a question of how to organize an economy. It is opposed to capitalism. Real deal statist countries include Peru (1970s-80s era), Argentina under Peron, Egypt, and Cuba. The state in essence is the economy. The entire economy (or the vast majority of it) is directly a function of the control of the state (often a military junta/rentiers).
On the other hand, there are countries that have state managed/state-directed capitalism: China, Taiwan, Singapore, etc.
The US is neither of those.
The US is a capitalist country. The economy is a market economy. What the US does have is a state that takes rents from the market and if anything by its regulatory schema sets the stage for monopolistic corporatist capitalism. That is worth some serious critique, but the ‘s’ word I think is unhelpful in this context.
We need a better term for this US situation: regulatory capitalism? Corporate capitalism? Those aren’t good enough. Liberal Fascism is too insane. Progressive statism has some merit but emphasizes progressivism (which really refers to a movement in the early 20th century that crossed left/right distinctions and would be better kept as that definition in my mind) and statism (which again it is not). At least not as I think statism ought to actually be understood–i.e. it’s original, very clear meaning.
State rentier capitalism? I don’t know.
Something that would emphasize the growing influence of the state in market forces (qua rentier in most cases…GM takeover being an exception), but not statist (rather capitalist), and yet a state that is largely at the behest of big corporate interest. So not a state power that is leveraging its influence to the larger populace (see this in health care reform as example).
Statism is a holdover from a bygone era. An era of both The Cold War and the industrialization paradigm. The Cold War is over, The End of (Ideological) History is upon us and we now live in the informational economy in which case statism makes no sense, doesn’t even come up in this paradigm. [Again see Cuba].
So we need another term. I”ve been racking my brain, but nothing good yet.
Thoughts?
I think it’s quibbling to say our government isn’t technically statist when we are moving quickly toward statism and away from capitalism. We can come up with a new name during this transition, but it’s clear, with all the central planning, which direction we’re headed. So I think it’s valid to use the term “statist” to describe the changes in government control over the economy. We might not be a full-blown statist nation, yet, but the actions by government are statist actions. Conversely, you can say it makes no sense to say we are a capitalist country when economic activity is regulated and influenced by government actions and planning to the extent it’s happening. We do some capitalist things, but we aren’t capitalist in the true definition of the word.Report
But we aren’t statist either, because that sort of implies the economy is in service of the state (or just is the state, as Chris points out), whereas in our situation it’s largely the state that’s in service of the economy – or, at least, a certain corporate part of the economy. Obama didn’t bail out GM because he wants the state to be in charge of GM; he bailed out GM because GM is, largely, in charge of the state.Report
Mike, Well said as usual!
How about crypto-capitalism, or Jacko-Barracko-Statism?Report
State-industry co-dependency?Report
A mixed economy?Report
oligarchic capitalism / capigarchy / capigarchismReport
The point is not what we are or are not. First of all, static definitions simply can never be applied to dynamic situations. We need to look, rather, at the projections. Where are we headed? And where have we come from? Why are things the way they are now? And to me, it seems we are headed toward a very much more statist society than we had previously.
Really, I think I’ve been in a bit of a haze these past few months I’ve been so disgusted with Republicans and George Bush’s failures, but I’m starting to see now just what a calamity we’re headed for with the Dems in control of just about everything and the massive, massive new entitlement programs they hope to erect (not to mention climate change scams, etc.)
Will we be as statist as many other nations? No, not at all. But far more than we ought to be, far more than is good for our sensibilities, our liberties, and the future of our children. And it’s a shame, because the message of all of this has been lost, and people are just like me – disgusted and sick to death of conservatives in this country, who never fail to drop the ball, mess up the message, etc. So how do we regain that higher ground? I don’t know.Report
“Where we are headed” is a government of the CEO, by the CEO, and for the CEO. The Democrats will lead us somewhat more slowly into calamity than the Republicans, but calamity certainly seems to be on the horizon.Report
“but I’m starting to see now just what a calamity we’re headed for with the Dems in control of just about everything and the massive, massive new entitlement programs they hope to erect (not to mention climate change scams, etc.) ”
I’m a little disappointed here, E.D., I mean, dude, it was/is soooooo obvious! No rocket science involved, sadly, you, your children and grandbabies will have to pay for this.Report
Better late than never. And really, when supplied with so few meaningful choices …. perhaps the English major in me took too much offense to Palin’s linguistic oddities.Report
Which is to say that the GOP needs to do much, much better next time if they hope to beat Obama’s appeal. Whether or not he is actually doing any good for the economy, etc. he is nevertheless still very appealing and still represents a refutation of Bush foreign policy etc. (however accurate or inaccurate that representation may be…)Report
It doesn’t really matter what we perceive Obama wants to do — it’s what he is doing to change the auto industry and the banking industry and the energy industry and the healthcare industry.Report
But that’s a dramatic oversimplification. It is not the norms of the state that are invading the auto or banking industry; it is the norms of the auto and banking industry invading the state. The only case that appears “statist” in a traditional sense is health care, and that’s only if you accept the manic, unhinged conservative position that the Democrats are trying to socialize health care (which they’re not).
Simply pointing out the growing confluence of state and economy isn’t enough to conclude “statism”. What we have is far more like some kind of oligarchic takeover of the government by business.Report
The companies involved in all these changes like GE and Goldman Sachs aren’t private enterprises, they are extensions of the state into the market. Call it what you want to call it, that isn’t important — it is what it is and it’s the state slowly taking control of the economy — i call that statism.Report
Corporatocracy is already a word. And, while the US isn’t truly a corporatocracy yet (electing Democrats has slowed the process slightly, but it won’t actually hold it off), “quasi-corporatocracy” seems like a fine term.Report
Ryan – the bigger the state gets, the bigger the corporations get. That’s how it works. That’s the damnable thing about it. And the more regulations the Democrats place on an industry, the higher the barrier to entry becomes, the more strangled potential competition becomes, and the more corporatist our society becomes. So call it a corpratocracy if you want – in the end, that’s exactly what statism will look like in America. Big corporations and big government working together vis-a-vis regulatory measures, subsidies, bail-outs, etc.Report
Well, “that’s how it works” in the United States. I don’t think there are all that many people who contend that Europe, where the states are generally much “larger” (however you want to think about that), is dominated by corporate interests intertwining with state interests. The social democratic model has largely subordinated corporate interests to the public interest. That we seem unable to do the same in the US is not a condemnation of large states; it’s a condemnation of our inability to form a large state that isn’t entirely deferent to rich people.Report
So Europe doesn’t have massive corporations in bed with those big governments? Just because Europe has done a good job providing broad safety nets does not mean they have perfect economies. (Not to mention, it depends on which country we’re talking about here…) European unemployment is consistently high; taxes are a huge burden and jobs scarce; barriers to entry in many European nations are extremely high. They do some things well, and I won’t deny that, and I think there’s lessons to be learned in some places like Denmark especially, but thinking that there isn’t corporate/government piggy-backing going on is ludicrous (not to mention the absurd power of the unions in some European countries).Report
I don’t see those massive corporations making decisions about how the governments of Europe are run. Certainly there are companies like Airbus, but the notable fact is that Airbus largely serves at the pleasure of the actual people who live in France. High taxes, barriers to entry, and strong unions keep the people of France fed and healthy. If the social safety net is broad enough to catch everyone, why should I care even a little about unemployment?Report
I don’t see those massive corporations making decisions about how the governments of Europe are run.
Do you really think they do not have very loud voices in the halls of government?Report
Actually, the influence of corporate lobbyists in the EU is pretty significant. In fact, Brussels has nearly as many registered lobbyists as the US federal government (15,000 vs. about 17,000). France has no system of registration, but it seems to be recognized as a major and growing problem that is causing greater demands for regulation.Report
Which is not to say that Europe has “perfect economies”. But from where I sit, and taking the public interest as far, far more important than letting a few people get spectacularly rich, European economies are almost universally more just than ours.Report
If Erickson collapsed Sweden would probably go into a death spiral. It’s my impression (and I stand ready to be corrected) that European economies are typically less diverse the more socialist they are, even if those industries are privately held. As a result the bonds between the government and those industries are incredibly tight as one cannot live without the other.Report
I agree with everything you said E.D. and would add a couple of additional points of my own: With more regulations comes a closer relationship between elected officials and business as businesses invest in those officials to get special treatment and guidance through the regulatory process.
Also, as regulations get tougher the schemes to make money will get increasingly more complex which means the inevitable busts will be that much more painful (Case A being our current mess).Report
Not to sound all Ron Paul-ish, but a big reason for this is fiat money/legal tender. The monopoly of money creation by the government through its in bed relationship with the banks. It now being unclear whose in charge of the other one.Report
Where’s Andrew Jackson when we need him?Report
If you don’t think the state will control the patsy corporations playing ball now, then you “misunderestimate” (a bushism that’s forgotten) the state.Report
Oooh – I like misunderestimate. Bush was like Shakespeare – always coming up with new words! 😉Report
I see no reason to conclude that corporations will not continue to control the state. The banks and GM wanted billions (trillions) of dollars of taxpayer money. They held out one hand and there was the entire United States government shoveling it in.Report
Mike,
I’m not sure about that. GM maybe since GM had unions and therefore got attacked by right-wingers. It’s ok to rough them up a bit.
But the banking industry? Those stress tests were a complete joke and sham. Those guys are never going to be disciplined.Report
Although it’s worth pointing out that the people who got the most hurt by the GM bailout (other than the taxpayers) were the unionized employees who lost pensions and such.Report
Let’s just call it a clusterfuck economic system and move on.Report
But to be clear, I suspect you want a powerful state controlling the corporations — that we need better representatives who will put them in their place.
I am a proponent for a limited government so that the government has nothing to offer corporations, which would end the unholy alliance. You say the banks got away with murder, but the people allowing them advantage are the Goldman Sachs cronies — and Goldman has done pretty well. You seem to think the state can rise up and smite down the corporations and therefore begin creating equality and justice rather the rich becoming more powerful. So, I see why it’s better from your perspective to see the problem as a problem of powerful corporations rather than a problem of state intervention in the economy.
Regardless how you distinquish power which creates its advantage from the monopoly of coercion, as corporate controlling state or state controlling corporate, it’s the same power and the same intervention which prevents capitalism from working.Report
“I am a proponent for a limited government so that the government has nothing to offer corporations.”
This sounds good. But when I think about it, I can’t figure out how that would work. Corporations were plenty powerful before the government really ramped up (Depression/WWII -> now). I don’t know that reducing governmental power would really do much to corporations… and I worry that it would actually make matters worse.Report
” Liberal Fascism is too insane.”
😀Report
Mike: “The companies involved in all these changes like GE and Goldman Sachs aren’t private enterprises, they are extensions of the state into the market. ”
As has been pointed out, large corporations were around when the state regulated a very small portion of the economy, way back in the 1800’s. The percentage of the economy involved with large corporations was smaller, true, but that was probably also due to the technology of the times. Large corporations were far more feasible with the railroad, telegraph, and large steamship.
The temporal direction was that companies got large, and purchased government favors after they got large (and then got larger).
Example: as was pointed out in the Rolling Stone, G-S has been both big and playing massive, nasty finance games since before the New Deal.Report