Corporate State Socialism

by Anthony Gregory

One of the most important things that individualists can do in speaking with statists of various types is use a terminology that elicits cognitive dissonance, making them realize the errors and inconsistencies in their thinking.

Very few Americans are 100% statist. Most of them have some political opinions on which they are fairly libertarian, even anarchistic. They will often have positions that are grounded rather firmly in individualism, in which they demonstrate a hostility to government power altogether. Whether that issue is taxation, regulation, drug choice, the right to bear arms, foreign policy, or whatever, individualists can exploit this libertarian strain in most people by showing how their more authoritarian views run counter to their anti-statist opinions on a given issue.

Of course, some people are 100% statist, or at least value their libertarian stands on certain issues much less than their authoritarian opinions on other ones. For a leftist who would rather have government health care than free speech, or a conservative who would surrender his guns to be able to stop his neighbor from smoking pot, very few libertarian arguments will work.

But most people believe in certain freedoms, and many people tend to value those freedoms more than the “right” to oppress other people in other areas of human activity. This is where the cognitive dissonance and the clever terminology come into play.

When describing the current economic system in the United States , I like to call it “Corporate State Socialism.” There’s a lot in that term to confuse the average conservative, leftist, moderate or even libertarian. Let me explain.

Obviously, America is under attack from the government’s socialist policies. But if you simply use the word “socialism” in railing against the government, most well-meaning socialists – and there are some – won’t listen to you. Without explaining that Nazi Germany, the USSR , and pretty much every other state in the modern world are examples of varying types of socialism, you might come off as a reactionary nut. And if you do explain all this, the fact that you call the United States a “socialist” country seems to be rather meaningless. If any oppressive government activity in the economic sphere is “socialist,” then what’s the point of calling any of them socialist when they all are?

Certainly, saying that the United States suffers under “state socialism” makes your meaning much clearer. Idealistic socialists consider the socialism under Stalin’s state to be a far cry from what they want, which, if I understand their paradoxical philosophy correctly, is actually some form of voluntary socialist anarchy – perhaps brought about by a “proletarian dictatorship,” but not characterized by this statist means to their desired end.

However, many leftists complain that America is actually suffering under capitalism, state capitalism to be specific. In a sense, they are right. Capitalism, broadly enough defined to include the heavily regulated and taxed American economy, certainly more often than not brings with it oppression of the so-called “working class” for the benefit of the certain private interests.

“Capitalism” is as problematic a word as “socialism.” So problematic are they, it is accurate to say that America has become a socialist country – with policies approaching fascist every day – and also to say that “fascism” is simply a form of “socialism,” in which the state maintains the façade of “private property” in the hands of a few “capitalists.”

Is America capitalistic and socialistic? In some ways. But what most leftists, at least the less evil ones, oppose when they bash “capitalism” is actually “corporatism.”

Libertarians and anarcho-capitalists often bend over backwards to defend corporations. I used to, myself. This makes it harder to convince leftists of our genuine opposition to all oppression. The fact is, many Americans see corporations as too massive, too corrupt, and too inhumane. And their perception isn’t without its validity.

Why should we defend corporations, which exist as creatures of the state, which survive on government grants of monopoly privilege as well as corporate welfare, special contracts with the state, and the benefits of eminent domain?

Not all corporations are all bad, and certainly some are far worse than others. Most people working within the corporate structure, including managers, are working hard and honestly within the predominant economic framework that is available to them. We should always make this clear. But to the extent that the state helps some corporations at the expense of the American taxpayer and the free market, we must agree with the leftists that there is “corporatism” going on.

Indeed, corporations are to blame for much of the socialism in the country. They were at the receiving end of special subsidies under the Lincoln administration and onward. They lobbied for special status in the form of regulations and through the mechanisms of antitrust law. The Progressive Era, World War I, the New Deal and World War II saw an emergence of corporate power right alongside the diminution of laissez faire free markets and liberty. The concentration of corporate power under the Progressive Era is well documented in Gabriel Kolko’s Triumph of Conservatism, and the Rockefellers made some of their biggest fortunes under that socialist of infamy, Franklin Roosevelt. 

Socialism and corporations without the aid of the coercive state are voluntary economic agreements that could conceivably coexist in peace. Anarcho-capitalism and anarcho-socialism are not necessarily mutually exclusive. With the power of the state, however, state corporatism and state socialism become the greatest enemies to human freedom, redistributing wealth, empowering the elites, and fostering war. As the Progressive socialists at the turn of the 20^th Century called for business regulations, huge domestic infrastructure projects, and imperialistic adventures, the corporations that stood to benefit were more than happy to oblige.

And so it is today. Just as stateless socialism and stateless capitalism can peacefully coexist, state socialism and state corporatism can coexist through the force of law. In fact, they feed off each other in a relationship of co-dependence. The augmentation of Medicare with Bush’s prescription drug giveaway last December was the largest expansion of the welfare state since Lyndon Johnson. It is also a huge subsidy to pharmaceutical corporations. Social welfare, much of the time, is corporate welfare. And at the end of the day, the welfare statists and the corporatists can pat themselves on the back, even as they complain publicly that it is the other side that really won.

There is a single word that basically sums up what I mean when I say “corporate state socialism,” and that is: mercantilism. We should revive that word, too, but when we describe what it means I suggest we say “corporate state socialism.”

It is very useful to say “corporatism” and “socialism” in the same breath. It will disarm your leftist friends, and perplex your conservative ones. What the true individualist seeks is a world in which all these labels lose their violent connotations – a world in which “capitalists” and “socialists” can live with the rest of us in peace, not worrying about the other camp using the power of the state to impose its values, and not feeling like they must preemptively use the power of the state to impose their values instead.

In the end, state capitalists and state socialists will always find enough common ground to work together. They’ll continue to advance a corporate state socialism that no peaceful, freedom-loving individual wants. And so the rest of us, who reject the state and are willing to put all our other nominal differences aside, must stick together, at least in our attempts to push back the wave of statism imposed on us by the authoritarian socialists and state capitalists of all parties and all stripes.