Category | Op Ed

America blindly embraces fascist economics

Published on February 2, 2010 by Justin Hayes

On Feb. 10, 2009, I wrote a column entitled “The march to socialism.” After a year of research and re-evaluation, I realized that I could not have been more wrong. We are not on the path to socialism. Instead, our economic system has resembled and continues to resemble the economic system of fascism.

First, it is necessary to define our terms. Socialism is a system in which the government owns the means of production, and property is owned collectively. Men are prohibited from retaining the fruits of their labor. Produced goods are given to the state and distributed equally to the collective. We are obviously not headed toward this particular system, although we already have socialist policies.

Capitalism, on the other hand, is a system that protects the natural rights of the individual. Man has a right to his life, liberty and property. In this system, government serves to protect man’s rights from the use of force or fraud. The laws protect man from theft, death and slavery. The prohibition of force is the essence of capitalism. Any system that proclaims to be capitalist and does not prohibit force is a wolf in sheep’s clothing.

Where, then, does fascism fit in the economic spectrum? It neither protects private property nor abolishes it. We often hear that America has a “mixed economy” - a mixture of capitalist and socialist policies. In other words, we are allowed to keep private property, but government can regulate it, tax it and often seize it for the public good.

Private citizens own property, but the government has control over its use and disposal, negating the entire concept of ownership. It redistributes the wealth from the working class to the retired through Social Security and Medicare, and from the rich to the poor through taxation and welfare. It can even use our money to bail out failing banks, insurance firms, and automakers, while stipulating that those funds be used for the public interest.

Because the government controls how we use our property in our economy, businesses, unions and interest groups vie for favors, subsidies and regulation, which hurt or punish the competing interests. In a free and capitalist economy, these pressure groups have no place in government. All interests are treated with equal protection under the law. Which system sounds more like ours?

The health care bill is not about the needs of the people, but the interests of pressure groups. The unions want to increase coverage but refuse to have their pension plans taxed. AARP wants reform but refuses to accept cuts in Medicare. The insurance industry favors reform measures that mandate coverage to increase their profits, but oppose a public option. Groups use the tool of government force to strip away the rights of others for their benefit.

The economic system of fascism is often referred to as corporatism, a merging of business and government. In a free economy, businesses that fail to please their shareholders or the public go out of business, while those companies that provide the best product at the lowest price succeed. In a corporatist economy, businesses - which often become government monopolies - are subsidized to provide for the public need. The government does not run the economy, but guides it with protections and subsidies.

Demagogues will often argue that capitalism only benefits big business. The person who shares this belief is mistaking capitalism for corporatism. Big business love a government intervention and regulation, and hates free-market policies. Larger companies can absorb the cost of regulation and higher taxation by raising the price or firing employees. Smaller competitors, on the other hand, do not have the extra capital and can potentially go out of business. Free markets level the playing field by forcing larger companies to outperform competitors to stay in business.

The economic system of fascism is the Third Way, the midpoint between capitalism and socialism. Fascism is not synonymous with racism or dictatorship. Democratic governments can control all affairs of a nation’s industry, social interactions and commerce if that government abandons its protection of individual rights for the whims of the public.

How much do we rely on public opinion polls for policy positions? How often do we hear about the importance of pragmatism over principle? How often are those with principles labeled extremists? Fascism, in this country, comes not from a tyrant but from a government absent of principles.

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