I have a very short reaction to this poll (HT: PowerLine) that 36% of Americans, including 61% of those who identified themselves as liberal and 53% of those who identify themselves as Democrats, had a favorable view of socialism. My answer would be influenced by what I thought socialism is. If I read Yahoo Answers, I'd find out socialism is a midpoint between capitalism and communism. If I tried to read Wikipedia, I'd get this hopeless list of possible socialisms. If I read Marxists calling it the society of the free and equal, it's hard to oppose.

If on the other hand you thought of socialism as immiseration and murder, you would have a different opinion.

Jonah Goldberg, in his letter from yesterday (by free subscription) makes this same point:

I think this is one of the most fascinating and under-explored areas of 20th-century history. Not just the liberation theology angle, but the whole effort by the Soviets to manipulate world opinion, and thereby politics, in countless and often little-understood ways. So many of the conspiracy theories that have inflamed the moonbat Left over the years were, at least in part, psyop cons by the Soviets. Some scholars made their careers by making pro-Soviet arguments in good faith and then being rewarded with more access to the Soviet Union. Some people were bribed and others simply flattered into aiding and abetting the Soviet cause.

The effect of these academic scribblers lives on and influences how people respond to pollster questions on socialism.

Labels: economics, socialism

A year ago when Pelosi and Bush decided to go forward bailing out the auto industry, David Brooks wondered if we are sliding into progressive corporatism. I went further with this in March. Now comes Jerry O'Driscoll.

First, the Fed announced that it will evaluate bankers� pay on the basis of how well they manage risk. How better to be a good risk manger in a bureaucrat�s eyes than to take no risk? Purchasing Treasury obligations and federal agency paper is the sure way to avoid risk. The Fed has a second policy to make that strategy profitable: zero interest-rate borrowing to finance Treasury and agency debt yielding 3%.or more. The Fed continues to signal it will keep rates low, diminishing interest-rate risk.

These policies are choking off the supply of credit to the private sector, espcially small business. To add to the problem of small business, the Fed and the Treasury have a third policy of credit allocation to major banks like Citigroup, Bank of America and JP Morgan Chase; large industrial firms like GM and Chrysler; and such entities as money-market mutual funds.

The government crowds out the private sector overall, and Wall Street crowds out Main Street.

Melloan doesn�t state it, but there is a name for this economic policy: corporatism. Big government favors selected big business and rewards big labor as a junior partner. It�s not socialism, but the economic component of a fascist political program.

In March I thought we were slouching towards corporatism. It now seems like a full-out run.

Cff. Steven Malanga from last April. I prefer corporatism to socialism as a description of Obama's policies, and when I said so on radio last July, boy did I catch heck! I wonder if it's because it blurs the distinction between our two major parties?

Labels: economics, socialism

Today I attended the statewide meeting of MN Republican Women and again was reminded of something we really take for granted - a structure to run meetings. Robert's Rules of Order (RRO) has provided guidelines for meetings since 1876. Most of us grew up with its procedures and just assume that meetings will be run following them.

This is a rarity. I'm reminded of a Russian immigrant at a statewide Republican Convention a few years ago. He stood up at one point in the meeting and said (I paraphrase): "Do you realize how wonderful this is? People can debate, disagree, but they are heard. And no one gets mad. This is beautiful! This is America."

We hold debates in a civil manner and there is a procedure. It seems cumbersome at times but it works. If we lose our freedoms, RRO will also be lost. As frustrated as I used to get having to follow the RRO parliamentary process, I now appreciate it for its thoroughness and yes, beauty.

Labels: education, socialism

Liberals make fun of conservatives' patriotism, but in fact liberals' preferred economic policies are more dangerously nationalistic, and full of contradictions.

Ben Casnocha. On my way to a conference in China where I am speaking on the third wave of globalization, the one China embraces. I like Casnocha's description of economic nationalism, which I'm sure walks in the neighborhood of Jonah Goldberg's liberal fascism, but is probably less value-laden. Goldberg himself closed his blog for the book using the term "state capitalism", which indicates convergence with my preferred "corporatism".

Labels: China, Free Markets, socialism

I was in high school when I read The Gulag Archipelago. Having just been part of a Nixon-Ceausescu cultural exchange program, and thus touring Romania for three weeks in August of 1974 (I know, weird, but Nixon had a thing for Romania from the beginning of his presidency) the book was like a shot across my complacency about touring that country, experiencing the queues, the poverty, the restrictions on where you could and could not go. I recall looking at a border installation with the USSR and feeling the isolation.

Over the years the book has become an anachronism, replaced on school reading lists along with most of his novels ("One Day in the Life of Ivan Denisovich" probably remains on some.) Peter Boettke reminds me of the Museum of Communism in Prague, which could be also placed in Bucharest, Tirana, or any other Central European capital. In a year in Kyiv in 1995-96, I saw very little of the nostalgia for the USSR, not because capitalism was helping them live their lives in their minds but because they remembered the Holodomor.

It's worth remembering today that communism killed over 110 million in the 20th century. You can count on one hand the number of people who did more than Solzhenitsyn to bring this to the attention of the West and stand against it. Bryan Caplan laments that there will never be a Nuremberg trial for those deaths. I doubt Solzhenitsyn would have wanted that; he was no liberal democrat but rather a Russian nationalist, as Ilya Somin states correctly. Still, he served admirably in holding up communism as something that even the Left should not stand for (though they do anyway).

This quote, of all the ones I have seen today, is why we should keep Solzhenitsyn's Gulag alive on reading lists:

Oh, Western freedom-loving "left-wing" thinkers! Oh, left-wing labourists! Oh, American, German and French progressive students! All of this is still not enough for you. The whole book has been useless for you. You will understand everything immediately, when you yourself � "hands behind the back" � toddle into our Archipelago.

Hand the book to the next student you see with a Che t-shirt.

Update: Steve Horwitz notes:

For example, every summer I do IHS student seminars, and they often have a large number of central and eastern European students. I�d like the Chicago humanities faculty [who are protesting the creation of the Milton Friedman Institute on their campus --kb] to tell me how I�m supposed to feel when these students ask me why so many US humanities faculty, including some of my colleagues at SLU, still think Marxism and socialism have social value when those ideas were the inspiration, even if wrongly interpreted, for thugs who engaged in the killing of tens of millions of innocent people and the destruction of the economies of billions. I�d like them also to tell me how I�m supposed to feel when a Cuban refugee who risked his life to come to the US asks me why some US college students, including some at SLU, think it�s cool to wear Che Guevara t-shirts, implicitly honoring a murder and torturer.

Exactly.

Labels: communism, politics, socialism

After a week of debate where it appeared the saner members of Congress would keep their colleagues from looking like fools, the House passed HR 6377 just before leaving on Fourth of July recess last night, instructing the Commodity Futures Trading Commission to "curb immediately the role of excessive speculation" in energy futures or swaps and

(2) eliminate excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices, or other unlawful activity that is causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities.

The bill, introduced by Minnesota Congressman Collin Peterson, passed overwhelmingly, with only 19 nays. I've already written this week about speculation, but some further comments seem justified.

Congress has heard lots of testimony from 'experts' contending that the price of gas would fall to $2 if we could just get those nasty speculators out of the market. The testimony most have focused on is that at the top of the article, by Michael Masters. Here that is. The focus is on index speculators, who are now buying futures contracts almost equal to the entire increase in demand for oil from China. This however does not reduce the supply of oil unless someone takes delivery of the contract. Krugman hints at this very same point; see also Craig Jones. Most futures contracts are going to be closed out by writing the opposite contract as one reaches expiration. (Futures basics.) You might keep your long position by buying another future, but that does not remove oil from supply.

Now that doesn't mean that the price isn't influenced by what is going on in futures markets. Prices have been rising in part by expectations of the future, but it was ever thus since the beginning of asset trading. The key question is, at what point does speculation become excessive? And the reaction of politicians and everyday people, in my view, is emotional rather than economic. Excessive speculation occurs, in the mind of the non-economist or Congressperson, when the price of X is driven beyond the point where he or she can afford to own it. To take just one example: A St. Cloud resident is a Green Bay Packers fan. He owns season tickets to Packer home games. He does not use these often, instead selling them for above face value. Is he a speculator? When I ask him why he still gets the tickets, he hopes some day to return to the Land of the Cheese and attend all the games when he retires. He thinks the price will be higher for him to go to games when he returns than it is now, so he is hoarding his spot in the season ticket queue.

He is preventing others from holding that ticket, and therefore is helping drive up prices now. Unlike the index speculators, he actually HAS THE TICKET. But is his speculation excessive, or is it rational? You don't know, I don't know, and the government regulators don't know.

This does not prevent, unfortunately, government from acting as if they did. Sometimes arrogance is a disguise for ignorance, and as a good example this week consider Tim Walz' antipathy to markets, as Andy Aplikowski documents. He quotes a Rochester Post-Bulletin article in which Walz denies the market.

This idea � this red herring � that all of a sudden you�re going to drill and everything is going to be better, as if the market fundamentals are at work here � that�s not happening... These are the same people that are (getting) $40 billion in profit.

"As if" Walz believes profits do NOT motivate drilling. What do you think they do it for, to drop the rocks they drill in the ocean to watch the ripples? There is, in the Walz mentality, a suspicion that people who earned a profit got this from someone, that it's undeserved. For many years we've understood profits as the return to risk born by the residual claimant, the entrepreneur. But instead we get people who believe corporations are reprobates less worthy of our trust than a government that has a monopoly on force.

But that's not the point either. There's no need to believe the government is more immoral than corporations. There's little argument from either side of this debate that corporations are quite willing to co-opt or corrupt government to do their bidding, or that it's easier for them to do so than the hordes of consumers. It is that Walz and the others in Congress do not comprehend how the wealth we live in today came from. In the book with the title that I made this post, Ludwig von Mises stated this well:

Economics is so different from the natural sciences and technology on the one hand, and history and jurisprudence on the other hand, that it seems strange and repulsive to the beginner. Its heuristic singularity is viewed with suspicion by those whose research work is performed in laboratories or in archives and libraries. Its epistemological singularity appears nonsensical to the narrow-minded fanatics of posi�tivism. People would like to find in an economics book knowledge that perfectly fits into their preconceived image of what economics ought to be, viz., a discipline shaped according to the logical structure of physics or of biology. They are bewildered and desist from seriously grappling with problems the analysis of which requires an unwonted mental exertion.

The result of this ignorance is that people ascribe all improvements in economic conditions to the progress of the natural sciences and technology. As they see it, there prevails in the course of human history a self-acting tendency toward progressing advancement of the experimental natural sciences and their application to the solution of technological problems. This tendency is irresistible, it is inherent in the destiny of mankind, and its operation takes effect whatever the political and economic organization of society may be. As they see it, the unprecedented technological improvements of the last two hundred years were not caused or furthered by the economic policies of the age. They were not an achievement of classical liberalism, free trade, laissez faire and capitalism. They will therefore go on under any other system of society�s economic organization.

And thus there is no check on the ability of people to vilify speculators, because of course the oil can be brought to market in any number of ways! It occurs to me that people do not know what the world was like before the Industrial Revolution (or perhaps they want to go back to those halcyon days?) and how recent our gains against disease and starvation and the Malthusian world. Anthony de Jasay writes about how the modern progressive glorifies envy by its ignorance of these gains on the subsistence level:

Most of us react to the decency or otherwise of large incomes and quickly made fortunes by moral reflexes that evolved under the capitalism of a generation or two ago. They have not yet been adjusted to the changes capitalism has since undergone. One such change is the flood tide of pension funds in the Anglo-American type of capitalism which, after all, sets the mode of operation the rest of the world is beginning to imitate. The needs of pension funds and the competition between their managers sets the maximisation of asset values as the primary goal, and the more classic goal of profit maximisation by corporate enterprise tends to become a mere instrument of the primary goal. Socialists whose rejection of the "system" is visceral rather than intellectual, call this "Casino capitalism," run by and for "speculators".

It is that same visceral reaction that lead 402 Congresspersons yesterday to cast aside the gains that result from finding more ways to spread risk in the world to those willing to bear them, gains that allow pensions, homeownership, life insurance, and the development of new technologies -- the very ones the modern progressive says we should trust instead to give us energy rather than tapping the oil deposits we already know exist. Ignorance of that history is a peril to us all.

Labels: economics, Energy, libertarianism, socialism