Tuesday, March 17, 2009

Is America Socialist? Is America Moving Toward Socialism?

Socialism is defined in the following ways:

  • Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy. [1]
  • The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved. [1]
  • A theory or system of social reform which contemplates a complete reconstruction of society, with a more just and equitable distribution of property and labor. [2]

Is America socialist? Given the above definitions, and given America's present condition, it would be hard to say that America isn't socialist and it would be an ignorant falsehood to claim that America is a free market, capitalist country. In a Nov 2008 article entitled "What is Socialism? Is Barack Obama Socialist?" I wrote:

I must ask what it means for us to own our property. When a government can control, appropriate, distribute, and dispose of a very significant amount of its citizens' property without their individual consent, is it not the operating premise that government owns everything and that you use your property only with government's tacit consent, and only as long as government doesn't presently wish to revoke your rights to this or that portion of your property? In such a society government presumes to be lord of all and the law of the land is "render unto Caesar whatever he says is his."

Can anyone disagree that the situation described above is America's present condition? That our government can control, appropriate, distribute, and dispose of its citizens' property without their individual consent? If you doubt it, then a brief review of the American government's involvement in its economy is in order:

Quantity and Price Controls
The US federal, state, and local governments have imposed myriad controls and restraints on the free exchange of value between consenting individuals. We presently have wage controls as modest (though still harmful) as the Federal minimum wage of $7.25 and as steep as the average of $55 an hour (recently down from $70) that United Auto Workers members have been able to garner from an auto industry that is forced to accept the union's terms because it is illegal for employees of American auto companies to work for less than the wages that the UAW has bargained for.

Price ceilings on a state and local level govern the price of rents for apartments, electricity, gasoline, and insurance premiums among other things. Preventing prices from rising naturally to meet market conditions causes shortages and decreased quality as suppliers and capital markets produce less of the good in question because the government controls have damaged its profitability. Price ceilings on insurance premiums in Florida are the reason that State Farm dropped 1.2 million homeowner policies in Jan 2009, leaving Florida homeowners vulnerable to the next hurricane that destroys their property.

The government also imposes tariffs and import quotas on all kinds of imported goods like sugar cane from the Caribbean and steel from Europe, driving up the price of these goods for American businesses and consumers and hurting American exports by encouraging similar policies in other countries. In addition, government subsidies of various industries wreak havoc with market forces and create wasteful surpluses and artificially low prices. The surpluses (of subsidized corn, for example) typically get dumped in foreign markets where they flood the market and bankrupt local farmers.

American citizens and businesses drown in a sea of regulations navigated by hundreds of powerful regulatory agencies. Think our economy isn't centrally planned and controlled? Think again. Just examine this list of United States federal agencies and what they regulate and control. It's astounding. Most of America's major industries are tightly regulated and controlled by the federal and state governments. Among them are agriculture, mining, logging, manufacturing, the food industry, retail and wholesale distribution, telecommunications, education, medicine, banking, energy, housing, transportation, the labor market, securities exchange, and the market for capital- which is the backbone of our economy.

In addition to controls and regulations targeted at these specific industries, there are state and federal laws that regulate (and harm) business activity in general, like the penalties businesses are forced to pay if they don't provide health insurance to their employees, which strains the cost structures of small businesses and discourages creation of new start-ups as well as new jobs by existing businesses. Then there's Sarbanes-Oxley and the millions in annual compliance costs it imposes on publicly listed corporations, and the disincentive it creates for successful companies to list on American stock exchanges.

Then there are the anti-trust laws that the federal government uses to prosecute (or did I mean to write "persecute") businesses for the crime of success. Under these laws, if a business prices above its competition, it can be prosecuted for monopolistic pricing. If it prices below its competition, it can be prosecuted for aggressive pricing to bankrupt its competitors. And get this- if it prices the same as its competitors, it can even be tried for price collusion. The laws are such a vague, tangled mess that no successful business can be safe from them or possibly comply with them all.

Remember the kind of measly taxes that the American colonists fought a revolution to end? The kind of taxes we pay in America today are beyond the wildest dreams (or worst nightmares, more like) of our patriotic forebears. Federal, state, and local taxes of all kinds confiscate American wealth to subsidize redistributive entitlement programs, unnecessary and destructive wars, and the bloated mess of regulatory agencies referenced above.

The average American family pays 40% of its earnings in taxes. So if you're average, you work for the government from January 1 to May 26. Only on May 27 do you start working for yourself. How does that feel, comrade? (On a side note, since we're on the topic of working for the government- did you know that the federal government is the largest employer in the United States with 2,300,000 military employees and 2,600,000 civilian employees?)

Among other taxes and fees, Americans pay personal income taxes, corporate taxes, capital gains taxes, estate taxes, sales taxes, Social Security and Medicare taxes, self-employment taxes, property taxes, and fees of all kinds to register everything from your car to your marriage.

Recall or reread the definitions of socialism above, and then decide for yourself whether America is socialist based on the information provided in this article.

End Notes:

1. socialism. (n.d.). The American Heritage® Dictionary of the English Language, Fourth Edition. Retrieved November 22, 2008, from Dictionary.com website: http://dictionary.reference.com/browse/socialism

2. socialism. (n.d.). Webster's Revised Unabridged Dictionary. Retrieved November 22, 2008, from Dictionary.com website: http://dictionary.reference.com/browse/socialism


Chris F. said...

The simple fact is that this country has been socialist for the better part of 100 years or more now. The Republic itself didn't even last 100 years. The home of the brave and land of the free is merely flowery rhetoric. Another American Revolution is long overdue.

W. E. Messamore said...

*Sigh* It makes me so sad. We'll see what happens though- perhaps the spark of liberty is alive in enough hearts to engulf our nation and the world.

Dominic said...

Doesn't the Federal Reserve lend out money to the government with interest? If so, I'd be interested in knowing how much of our tax dollars go straight to the Federal Reserve. Especially since the recent printing of all this "new" money. I think from Oct. 2008 to Feb. 2009, the money supply increased by 70%!

W. E. Messamore said...

You're absolutely right that when the government runs deficits it pays for them in part by "monetizing the debt" -having the Fed print up paper money to pay the government's expenses.

You are also correct in saying that our money supply is in really bad shape!

Anonymous said...

America is becoming a non-western, non-european non-white country, simply because of the demographics. To those new non-european immigrants and their cultures, free market capitalism is a foreign idea. This is reflected in the shift in the American politics. The demographic change is the main driver here, and resisting it may be futile.

W. E. Messamore said...

I'm not sure I agree with that premise. The market is a classical human tradition that goes back to time immemorial. Culture and demographics simply cannot account for the success of free markets in places as different as the USA, Hong Kong, and Dubai.

And look at how many of the USA's immigrants come from Latin America and Asia, people with cultures that value honesty, hard work, strong families, tradition, and classical values and ways of thinking.

Remember that the political systems and their philosophical foundations that are antithetical to free market capitalism grew mostly out of the work of French, German, and English philosophers and political economists.

I think the change we should find alarming in America is the philosophical change and the change in people's hearts. If we can oppose these changes with a philosophy of reason, a religion of love, and an ethic of peaceful coexistence, we can establish a virtuous and flourishing society.

Anonymous said...

America should probably be considered a subliminal form of a socialist regime. Regardless of who is elected President the same basic agenda with the same central initiatives will be followed through to fruition.A small group of people, who possess tremendous wealth, posess an immense amount of power in our "democracy". A few initiatives of both the Presidents' and the electing majority publics'concern may also be fufilled, but at the core of this other things are happening. The media, which is centrally controlled by the government, also seeks to cultivate our minds, thought processes, and even personality traits. The average American has no consciousness as to the aspects of their lives that are being ultimately controlled by the government.In this way by disgusing propaganda as patriotism vs terrorism, Christianity vs Islam, and pushing the lie of One nation under God INDIVISBLE into every new American generations head, the covert system of socialism disguised as democracy will continue. I resent the fact that our government( and some others) promotes ignorance, fraudulance, and deception for its own ECONOMIC benefit, for what is becoming the expense of our humanity.

Anonymous said...

... W.E.Messamore, why do you fail to mention the African Americans' as well the Afrikans' rich cultural and traditional history in your last comment. These people are also part of the American minority. These people are also contributing to the "nonwhitization" of America that you were referring to in your defense. Arican culture also reflects honesty, hard work, family, values and philosophical ways of thinking. The culture and history are well documented and extend even well before the birth of the beloved Christ just as the preceedingly mentioned "races" of peoples culture suggests. I can understand the current state of the majority of African Americans "perceived" social status could cause one to believe otherwise but it would be nice for you to be able to mention all that are deserving in your next assessment or comment pertaining to immigrants/minorities in America...Just a thought

W. E. Messamore said...

Of course! The lack of mention for the African culture and people in that comment was inadvertent, and should not be construed as a deliberate exclusion of African people from my assertion that immigration is good for America.

I am decidedly for immigration, and opposed to the idea that the death of free market capitalism is due to immigration. It is due mostly to ideas that originated in and germinated from post-Enlightenment, white Europe. Besides, immigration is itself an example of the market system at work to create the most efficient allocation of resources, labor, and capital.

Anonymous said...

it often seems that the right is full of nothing but lies and fear.

W. E. Messamore said...

I'm confused by that comment. How is it related to the post above? Are you asserting that what I've written above is right-wing fear-mongering?

Anonymous said...

I am jumping into this conversation at a very late date however this is the first site that came up when I searched for “Is America Socialist”. I am not real sure how the conversation of whether this country has become socialist or not reached the topic of demographics but here is my two cents. The problem is not black or white or any other color. Each race has people in it with whom we would like not to be associated with. Stereotypes such as the ones discussed above just give us a reason to keep racism alive and leftist groups supporting affirmative action employed.

The problem of socialism in America is more than color and it is a problem that will affect every American. We have been socialist for quite some time however we need to find a way to take back what is rightfully ours (FREEDOM). Each year we become less and less free and own less and less and give the government more power to take more and more. Technology has put most of this burden on us, and no this is not Ted Kaczynski writing this post, but it is the truth. I am constantly hunted by the image of the American people waiting in a nest while momma bird feeds us. Each and every American must take responsibility for themselves and not depend on our neighbors to pay their hard earned dollars to keep all the sinking ships afloat. It is time for a revolution to take back this country.

Anonymous said...

Maybe you're right. Maybe a revolution is needed. But how many people would be willing to actually support something like that?

W. E. Messamore said...

A lot of people- especially if we make sure that it is PEACEFUL and IDEOLOGICAL revolution- a change in the way we think and relate to one another- not a violent revolution.

Graham Shevlin said...

As far as I can tell, the Founding Fathers of the USA did not engage in empty sloganeering as a substitute for debate and thought.
The idea that Barack Obama is a "socialist" is severely at odds with the accepted worldwide definition of "socialism". By comparison with the North and West European mass-market political parties, the Democratic party would be regarded as a right-wing capitalist/corporatist party, a long way from what most Europeans would regard as "socialist".
The major problem I have with the whole meme is this: The line "Barack Obama is a socialist" reads and sounds like a resurrection of the McCarthy-era meme of "so-and-so is a Communist". Most of the time, those allegations were BS or mostly BS, and formed part of a deeply anti-democratic witch-hunt (complete with the HUAC "show trial" process) that I would expect most true Libertarians to despise.
Empty sloganeering like this is about on a par with the meme "two legs bad, four legs good" in "Animal Farm". It functions as a simple rallying cry, but it is a cheap rhetorical device, and by definition is therefore close to content-free.
One way of answering the slogan is "prove it". I have tried that and most people flounder. Another answer is "And this is bad how?". I have tried that on a few people and they are totally unable to answer the question without resorting to yet more sloganeering.
The slogan "so-and-so is a socialist" is a cheap rhetorical trick to avoid engaging in a much more essential discussion which needs to be held in the modern USA. I characterize that discussion as "what sort of country does America want to be as it grows up?". This is a young country compared to many, with all of the good and bad that entails. One of the important discussion topics is the role of government.
The history of Western Europe suggests that as countries become economically mature, they tend towards a more economically rigid governance model with more government spending and state control. I understand that many Americans (of which I am one) have a visceral dislike of what many term "European Socialism", but we have to get beyond that and other knee-jerk regressive reactions, and be prepared to answer awkward questions like:

1. What is the role of government in future in the USA?
2. What (if any) changes are needed to the Constitution and other methods and processes of governance?

Jesse said...

Socialism in the most common definition is; Economic system which is base on cooperation rather then competition and which uses centralized planning and distribution.

In short; Government.

Your second and third definition is "Socialism" as defined in Marxist theory only.

In the broadest accepted terms, socialism is in fact a necessary part of any economy and capitalism and socialism are not mutually exclusive. In fact if you make a list of all the countries in the world and rank them according to how much public spending makes up our GDP, which is one way to measure degree of socialism, the US would actually be more socialist than most.

Unless you are willing to spend some time working to build roads, volunteering for fire, police and EMS, protecting and cleaning our national and state parks, working at the local sewer plant, driving the public bus, working at the local public school etc for some time of the year, you are better off just paying taxes and letting the government pay people to do these things for the common good.

Thank god for socialism.

MLee said...

The Federal Reserve Bank owns $1.6 trillion in US Bonds. What did they use to pay for them? They truth is they did not pay for them with substantive value. They merely created the money they used to buy the bonds. There was no consideration so they did not actually pay for the bonds. That's fraud. The bonds should be returned to the US Treasury and the national debt is $1.6 trillion smaller.

Jawahar Khan said...

very well said, Jesse!

Anonymous said...

A lot of very ignorant statements in the original article and in the comments. So far I haven't seen anything postited here that constitutes true socialism.

BTW, Obama has proven over and over again that he is a center-right conservative, as are most democrats. There are only a couple true liberals in the US congress, none of which have any power whatsoever.
The only socialist system in the US is the US military and its health care system.

Socialism is state ownership of the means of productions. period. The US is not even close to that.

Yes, captalism is not freemarket - no corporation worth its campaign bribes is forced to compete in the free market. I thought everyone knew that.

All I see here are comments bemoaning the fact that SOCIETY has decided that is it worthwhile for the PEOPLE in the SOCIETY to solve some problems as a community rather than as indivitual operators. Most of that has to do wit the fact that corporations have become so powerful that they can run roughshod over individuals, and even towns and states. The fact the people band together to counteract amoral corporations is simply society taking care of the psychopaths that run most of our corporations. Just simple self-defense.

Remember that the "government" operates only under the control of the people. We can change it, and do occastionally. It is not some abstract concept. It is real and reacts to the demand for change.

That does NOT mean that the "government" owns everything. Far from it. It simply means that the people have asked their ELECTED reprsentatives to make certain laws that both help and protect them from the vagaries of life. Is that bad? No, of course not. If the whiners here actually got what they really want - anarchy - that is, no government (I don't believe that the social misfits posting here could live under ANY government without whining about something)- they would absolutely shocked about what that is actually like - think Somalia. Yes, there in Somalia they have no government, no regulation, it's every person for themselves, kill or be killed. That is what you are all talkkng about. Why don't you go there and try it out for awhile. Once you have had your education you can come back to the US, stop whining and become a useful member of society.

Now, run along and play. We don't have time for your childish nonsense.

Anonymous said...

"A small group of people, who possess tremendous wealth, posess an immense amount of power in our "democracy"."

That is not socialism or "subliminal socialism."

That is called Oligarchy, and yes, I agree with that.

As George Carlin said, "I don't vote. The rich have decided what they want and they occasionally ask us to rubber stamp it. I refuse to participate.

Anonymous said...

"Federal, state, and local taxes of all kinds confiscate American wealth to subsidize redistributive entitlement programs, unnecessary and destructive wars, and the bloated mess of regulatory agencies referenced above.

Please detail what % of taxes you are wiling to pay.

Please detail exactly what you are willling to give up and which of these you will eliminate when you are king.

Also, would you please tell us which laws you want to get rid of that you find useless.

Then, take what is left and tell us how you will pay for them.

In detail please. I have never seen this done by any conservative, so would really like to know.

Anonymous said...

"Then there's Sarbanes-Oxley and the millions in annual compliance costs it imposes on publicly listed corporations, and the disincentive it creates for successful companies to list on American stock exchanges."

Of course companies are so honest that we don't need to monitor them.

Where on earth do you live?!?! If you above the age of 6 you know that companies are, for the most part, dishonest at some level. Some corproations are so dishonest that they have self-desstructed and in the process elimninated billions of dollars of savings of normal people. The psychopaths that run most corporations, and all financial instituions must be kept on very, very short leashes or they will again destroy the economy.

The same goes for most other corporations - Exxon, BP? totally incompetent at dealing with oil spills. Shocking really how utter inept they are.

And you want to do away with regulations? What an absolute ignoramous you are!!!!

That alone disqualifies you to talk about anything to do with government - you are simply too ignorant of the subject.

William Cromwell said...
This comment has been removed by the author.

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