Phil Mirzoev's blog

Saturday, December 4, 2010

Don't be afraid of the word 'socialism' in the 21th century, it can be helpful

"We the People of the United States..." is said in the first sentence of the US constitution, not "We the corporations or capitalists or financial institutions of the United States...".
Even some of the biggest 'capitalists' of the US are starting now to be increasingly aware that free market capitalism cannot be a state ideology or a fundamental value or a kind of primary ever reached goal. It's just an economic reality - just it. It can be a necessary condition, it can be a necessary medium and economic and financial relationship structure, but it just cannot be an ideology of the state, neither a fundamental value, nor a thing of special pride. The freedom of entrepreneurship - YES that is one of the main values and goals, but not capitalism which many conservative demagogues have many decades tried to blur in their discourse with entrepreneurship. Even Soros, to my surprise, now understands that an attempt to make capitalism as such some kind of fundamental civil democratic value like entrepreneurial freedom is nothing more than an attempt to make gun possession a fundamental value confusing it intentionally with the right of self-defense.

Socialism is very often demonized by the conservatives. It's bad they say. Yeah, that's just a label, that could be used in a demagogic way, cos many people really have some stereotypes about this 'magic word', very often confused with communism in the mind of ordinary folks.
Sweden, one of the most progressive and reach modern democracies, is a socialistic state in the sense that very big well established corporations pay big taxes and have little lobbing influence on the Government. The same goes for Denmark, Norway Finland and some other nice and extremely reach democratic countries which did even not take any notice of the the world economic crisis thanks to their economic and social model (no problems with financial sector and banks cos they are very closely monitored and controlled by the state and... right public). On the other hand, state transparency and the civil control over the political decisions in Scandinavian 'socialistic' countries are stricter and arguably more effective than in the US, in this sense they are more democratic than the US democracy, cos people has a more state-of-the-art mechanisms of control over their Government. Some would say: "Ale right, but the US is a world economic powerhouse, not Sweden...". But if Sweden was the size of States in terms of population and territory, my bet is she would be even better an economic powerhouse than the US, let alone more peaceful one and less harmful in terms of breeding communism regimes (many authoritarian countries always used the US as a kind of capitalistic scarecrow, using in their turn too the capitalism-socialism demagogic myth to deceive their peoples and hold the power).
More to the point, Germany, France, Belgium, Canada, Australia etc and are not completely capitalistic either, though not so socialistic as Scandinavia. In fact there's no such thing as an absolute capitalism or absolute socialism, there's always some compromise. So neither of them is an absolute evil or good. The right question is: what kind of socialism or what kind of capitalism and how effectively is a concrete model going to work?
My personal opinion is that a little reasonable shift  towards socialism would only do the US good in the 21th century. No making Sweden out of the US but just a reasonable corrective rebalance of the US model - that's it. May be there was a time when big corporations (especially financial) in the US contributed to the jobs increase and possibly to the economy and needed some kind of lobbing power, but not any more. Now, on the contrary, huge financial corporations and banks need more control on the part of Government which, IMHO, has been amply proven by the recent crisis, its causes and consequences. Small and medium businesses is another question, they need more protection on the part of the Government, that is what is meant by the socialism in practice in the 21th century.
So no point in demonizing socialism as such. The main idea of this is that the right social conditions contributing to the maximum realization of the human potential in a society comes first before the driving economic force of businesses, but the idea of free market is nowadays not put in contrast with the social role of state. The free market and entrepreneurial freedoms have long stopped being some kind of fundamental values in the modern democratic world, and become rather a sort of scientific truths which are not disputed by anybody any more. When conservatives try to defend those things (trying to paint a terrifying picture of socialistic ideas) it looks to me like trying to prove that you must wash your hands after the work in the garden, or that one gotta pay respect to his mom. The socialists, in turn, just try to prove that realization of human social potential of a country through available and promoted education, health care etc is the primary goal of the state, not the protection of big oil companies or banks in our modern world. Don't neat together corporate interests with the state power: that's one of the major exhortations of socialistic pundits. But demagogues, using the ignorance of many people, try to use the term 'socialism' as a threat to the free market principles and  property rights. But not a single one so called socialistic country has any thing against free market conditions. On the contrary, in highly capitalistic societies the big well established business corporations arguably have unfair competitive advantage before small and new ones because they have the power to lobby the Government. So the extreme forms of capitalism can in fact not only promote democratic principles but detract from them (not in the sense of fairness of elections, maybe, but in a broader context of general public control over the actions of the Government, cos you have an intrinsic conflict of interest through the influence of business giants on the state). On the other hand in Sweden there is no such conflict, so the democracy in practice (between the elections) work more effectively than in many other more capitalistic countries. For example, it's very hard to imagine that, like in Canada, the Sweden Government would allow itself to buy some jets for $15bln from a foreign company without any tender and without any accountability whatsoever before the nation. The thing is not only that such Government would be put out of office immediately and anti-corruption investigation would be launched, but that the Government just would not be able to do this, cos mechanisms and traditions of  public control - democracy in practice, not only at the ballot box - are higher in this country than in the US, in my opinion. Large rate of higher eduction and the absence of conflict of interest in Government are two big contributing factors to this, resulting directly from Sweden being a highly socialistic country.
And last but not least: let us not be deluded about big corporations and their purported development thanks to low taxes and little intervention on the part of Government. Big profits very often provoke them invest even less. Just two more points about big corporations:
1. Many people like to refer to the necessity for tax reduction for project developments even for big corporation. There is some sense in this point, but in practice more often than not this argument is used in purely demagogic way: 'Reduce our taxes forever, cos we sometimes somewhere happen to develop some projects' - that's the main undercurrent of all those talks about 'poor rich monsters' lacking enough money for their new projects. There could be one thousand and one way to help with new projects without general tax reduction (for all for everywhere), using highly particularized TAX BREAKS. A corporation first proves that it really has a project to develop and then it proves beyond the reasonable doubt that it really develops this project (its not just on paper) and than it gets back some taxes.
But let us have any illusions: in reality those 'quasi-monopolistic' giants are not inclined to spend very much on new projects in times when profits are very high. The brilliant example is the oil giant Exxon Mobile, which stopped enlargement of its reserves as soon as the oil prices sky rocketed, see:
2. In times when tax regime is soft, big corporations, with their high lobbing power, do manage to pay practically much less than small and medium business which is pretty much helpless in the face of state regulations. The same Exxon Mobile in recent times have practically paid NOTHING at all, and that in the climate of super-duper record prices for oil and super-duper profits from it too:
Interestingly enough, but even some financial billionaires like speculator like George Soros or Warren Buffet in the US now understand and recognize that in the 21th century there's no such thing as 'pure capitalism' in reality as state model and ideology, in the form it was pictured for a not very educated part of America by conservatives in the 20th century against the background of the Cold War (which in reality was a war against Russian totalitarian expansionism, but had always been presented by American conservative ideologists as a war of capitalism against communism).
Socialism can be an ideology for a state and nation, but not capitalism, which is not an ideology for state at all (beer is a good thing, but it's not an ideology to build a state upon). And now even billionaires like Soros understand this.
On the other hand. If Soros lived in socialistic Sweden, he could pursue his currency trading business all right.
In the developed democracies capitalism is about economic mechanisms - it is an economic reality, and socialism is about role and function of the state, which must help the interests of whole nation and be fundamentally separated from the direct financial lobbing influence of big corporation. "We the People of the United States..." is said in the first sentence of the US constitution, not "We the corporations or capitalists or financial institutions of the United States...".

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