What I find fascinatin g, as I watch the entire world slip into a corporate feudal system, is all our “Adam Smith-The Invisible Hand-Free Market” commandos always forget to mention a key point in Smith’s system, that business will always strive to attain a monopoly, and only an open free market…
This is the biggest and weakest straw man I’ve ever seen. Libertarians arguing that government hasn’t contributed to the problems in our economic system? Where are these Libertarians?
But beyond classifying Libertarians as pro-government, this line of reasoning adds no value. It continues the misconception that fascism and socialism are at opposite poles of some imaginary spectrum. History and theory have shown that it is very unlikely to have one without the other simultaneously (and note, I’m using arguments that are from the early 1900s, distilled in the 1940s, so it’s not like this is new).
To avoid confusion, “classic socialism” means that government controls the means of production, nothing more. Many modern socialists and even classic Marxists would not envision the distribution of powers in government quite the same way as what actually exists. Modern socialists in particular predicate their theory on a complete overhaul of the government so that the term “government” is almost inapplicable.
Similarly, “classic fascism” refers to the corporatism ideas that came out of California’s own Santa Cruz. Economic policy of the government is determined by business leaders. I doubt professors in Santa Cruz envisioned the rabid, racist nationalism that the Axis governments engaged in. I mean, have you ever been to Santa Cruz?
Look at the auto industry in the US. It wouldn’t exist in anything remotely like its current form without business leaders convincing the US government to swing decades of policies (and dollars) their way. This helped keep competitors at bay and reinforce an oligopoly in the us. Businesses shaping policy? Classic fascism. But wait… why is there a huge push for GM to make the Volt? Oh yeah, that was a political decision that was made a condition of the most recent bailouts. Government control over capital and labor? Classic socialism.
Look at the banking sector. Certainly the big banks have, until recently, had a reign over government policy. Classic fascism. But wait, the government subsidizes over 90% of the mortgage market? The government forcing the banks to accept mergers that straddle them with unprofitable positions? Classic socialism. Then the banks convince the government to give them free money until the losses are covered? Back to classic fascism.
What is further interesting is that many libertarians today lean toward the Austrian school of economics. That makes the Adam Smith comparisons rather useless, as only “the invisible hand” carried over (and was, rightfully so, still attributed to Adam Smith). Many of the other arguments were refuted almost a century ago. The labor-theory of value, for example, is a useless construct (this is also a primary flaw with Marxism, not to be confused with classic socialism—though most socialists also use similar value theories). Pointing out that libertarians ignore some of Adam Smith’s ideas while promoting others isn’t very enlightening, unless you seek to confuse other people and obfuscate their economic understanding. Allow me to use an analogy: Aristotle had some great ideas about the scientific method. He also had some interesting ideas about momentum and gravity that turned out to be wrong. But you don’t use the fact that he liked Hipparchus’ impetus as a way of discrediting scientists, do you?
A large number of libertarians were Chicago monetarists in the 70s. The monetarists made some interesting contributions to monetary theory that have practical implications. However, many libertarians have moved away from monetarism because of the moral and organizational problems with centralized control over money and interest rates. Lessons have been learned.
