Socialism is generally defined as holding in common the means of production and labor in an economy.
State socialism is when the government owns those means. This economic construct is laden with inefficiencies and lack of freedom and potential for oppression and force. Besides, it doesn’t work.
There is, however, a worse economic construct than socialism, and that is corporatism. Corporatism is the situation in which taxpayers support, via subsidy, private corporations and entities.
Every bailout is corporatism. It is taking taxpayer dollars to support failing private entities. AIG received $85 billion a few months ago (which ballooned its way to $150 billion in the subsequent months — for one company). It’s now on its way to the worst quarter in American corporate history: a loss of $61 billion.
Keynesian economics is unwise and doesn’t consider the economic principles of “cause-and-effect” that should govern economic decisions, and the stimulus package will almost assuredly be a total waste of money. However, the American public might actually get something out of it.
From the bailouts, however, we will get nothing except placing more companies on life support when they are in persistent vegetative states.
Where is the money going?
Catherine Austin Fitts is a former investment banker and Assistant Secretary of Housing and Urban Development. She explores the route money takes that comes from taxpayers, both in direct taxation and in stock investment in her e-book Dillon Read and the Aristocracy of Stock Profit.
Besides using taxpayer money to bailout failing multinational corporations (MNCs) and mandating retirement funds be invested in the stock market for tax deferrement purposes, corporatism also ends up bilking the taxpayer of billions of dollars in scientific research and development.
After our taxes are used to do research and development via the military, or in universities, or the National Institutes of Health, the profitable ideas and products are sold off for a pittance to private companies who then profit from the marketing and sales of what you and I paid to research and develop.
There are other venues of corporatism besides these three. The military-industrial complex that President Eisenhower warned American about profits from war, “shock and awe”, and fear.
“Economic Hitmen” are employed by corporations to assure that countries receiving international aid from the World Bank and International Monetary Fund are unable to pay back their loans and thus become indebted to MNCs and the interest of the elite of Western nations.
Some of you may argue that this is just the worst form of socialism, and to a degree it is. But instead of pointing a finger at the stimulus package and how we as a nation are “moving towards socialism,” consider that our current system of corporations enriching themselves with the tax dollars of the American people is the one described as the glorious “capitalism” by the opposition party.
Published concurrently at The Cause of Liberty.