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EDITOR OF REDSTATE

State Capitalism

By: Erick Erickson (Diary)  |  May 3rd, 2010 at 12:00 PM  | 

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There is a lot of talk these days about “state capitalism”. What is it?

The best definition is perhaps, “a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.”

In other words, it is textbook socialism.

But just as liberals now call themselves progressives, they now call socialism “state capitalism”.

Socialism is largely inefficient because the state does not have to worry about shareholders, profits, employees, or any of the rest. The state merely raises taxes and places the money in the hands of unelected and largely unaccountable bureaucrats.

And who practices “state capitalism”? China and other communist countries.

The left will descend into a lot of chest beating over this, but the facts and definitions speak for themselves. To roughly quote Obama, “words mean something.” And “state capitalism” means “socialism.”

The left is targeting corporations and other private sector job producers as evil and corrupt because they want to undermine capitalism and move us to socialism.

Barack Obama is a socialist. And the public is starting to see where things are headed and really does not like it.

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COMMENTS

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  • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

    which I will in column soon, but suffice to say that

    Vast majority of Chinese are in abject poverty and they have a huge demographic problem given all the female babies that have been aborted; huge surplus of men and the dying out of the most productive.

    Europe has been able to live the good life solely due to

    THE USA paying for defense and inventing drugs etc.

  • lineholder

    There are plenty of other countries across the globe that have followed the path of socialistic polices. I think that there is a lot conservatives could learn about what might lie ahead. I also think that understanding the cause-and-effect scenarios that have taken place in other countries could help us in fighting the battle to prevent the same types of policies from being implemented in our own country. Do you plan to include an evaluation of socialism in South America as well?

  • Achance

    VERY democratic or it can quickly become oppressive and unresponsive. Conversely, the people can use that very democracy to oppress as well, so there has to be strong constitutional underpinnings and an effective judiciary and law enforcement.

    If Alaska ever returned to Democrat/union hegemony, if it had anything like its current revenue, it would make the worst of the Left Coast and New England look like bastions of capitalism; it came pretty close to embarking that way in the ’70s before a burgeoning private sector took power away from the Democrats. While the state as a whole has remained conservative/libertarian, leaning more libertarian, the larger towns are all governed by Democrats (ANC has a nominally Republican mayor but a Democrat Assembly) and Democrats from any big Blue city in the Lower 48 would feel right at home in any of them, especially in downtown Juneau or downtown Anchorage.

    The big moral hazard in state capitalism as it is practiced here is that it turns the people into trust fund babies. The Alaska political class will say it jokingly, but it is altogether too true that you can do anything politically in Alaska so long as the Permanent Fund Dividend stays above $1000 and the canonization process begins if it is over $1500, see, e.g, Sarah Palin. The dependent class in Alaska has very generous benefits yet it doesn’t much get pressure over the generousity of those benefits because the people arent directly taxed, so it is easy to get ever more generous benefits enacted by the Legislature. The wage earning and wealth-producing classes have a level of amenities that aren’t at all reflected in the actual taxes they pay. Only in the more urban areas are there any taxes other than perhaps a local sales tax, and good citizens that they all are, the taxpayers complain constantly about their high property taxes, yet those property taxes on pay for a very small portion of their schools, roads, and other public amenities. A cut in the State funding of those amenities causing the people to either do without or pay for them out of local taxes would produce screams of outrage and a new crop of legislators at the next election.

  • mnewcomb

    I know Ron Paul is a sore topic around here, but what do you think about his description of Obamacare etc.. as corporatism vs socialism? I think his point about socialism being thrown around is easy to dismiss because you look at USSR/Vietnam/China and most people don’t consider the USA comparable to those countries.

    Drug and insurance corporations are big winners in Obamacare.

    Other big corporations are winners in cap & trade because they will be selling these credits on private exchanges (invested in by Gore, Goldman Sachs, Obama, etc…).

    Banking corporations win big with all the regulation and the implied too-big-to-fail guarantee it provides them.

  • Leopard1996

    Or another word for it Facism

  • Richard Mullins

    So soon enough we might see the first “State Capitalism” failure. The Chinese are setting themselves up for the fall with very high year to year growth(safe growth is always maxed out at 4-5%, over that give you Recessions and outright melt downs). This one thing that keeps being ignored when comes to US Chinese realtions. If we keep having them buy our bonds, we will go down hard along with the Chinese.

    I’m fairly sure of a melt down in 2 years but being conservative on this, 5-10.

  • Leopard1996
  • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine
  • IJB

    Not there there’s much difference between Fascism and Socialism when the Democrats practice it.

    But you’ll know it’s actually Fascism when leftie brownshirts start going around beating up little old lady tea party protesters. Which should start happening on a wide scale over the summer. Stay tuned…

  • Brian Hibbert

    is almost as absurd as the progressive non-sense.

    I’ve watched him in too many banking commission hearings to put much faith in anything he says.

  • Leopard1996

    And check to see if I am using proper CFC bulbs or my toilet flushing at the prescribed levels. When that happens, that’s when the difference between I hope that doesn’t happen becomes, I wish some stupid s(** like that will happen.

  • mnewcomb

    When he asked Bernanke about where the Federal Reserve got the money to buy 1 trillion in toxic assets? You found that absurd?

  • lineholder

    There is a lot of information out there. If you need input on this one, all you have to do is say the word, sir.

  • Achance

    how many people “should” be living in your house? You know, decadent Americans waste so much living space that the more deserving among us should be able to share.

  • Richard Mullins

    It all seems close to having “State Capitalism” in the US now that on part is implemented. If any more gets passed, it’s going to be bad news even if looks really good. You might see high growth(7-8% like the Chinese are doing now) but then comes the melt down. I don’t think we want that although we will feel the effects of the Chinese melt down. It’s no joke and keeps getting overlooked.

  • Richard Mullins

    It’s all for show and it’s a diversion from the problem we will have very soon.

  • Richard Mullins
  • mnewcomb

    Can you expound on your post?

    IMHO, the creation of (and subsequent giving to bankers/foreigners) over 1 trillion dollars is not a diversion. It is what enables all of this spending.

  • http://www.laborunionreport.combrand/brhttp://www.laborunionreport.blogspot.com LaborUnionReport

    what happens WHEN China melts down.

    It should be coming (as our housing boom went bust), but what are the broader ramifications?

    I would think they would look to put their holdings (U.S. Debt) for sale…which would drive down the cost of said debt, right?

    [I hated macro-economics in school.] :)

  • Leopard1996

    And she handled sending in the census form. However, I live in a 4 bedroom 2 1/2 bath house and it is just me and her, so they will probably use that when housing rationing starts.

  • Brian Hibbert

    I said I don;t put much faith into what he says. He may occasionally get something right, but he’s not the guy I’d go to for any kind of advice about money.

    I also don’t care much for his theories on corporations being controlled by a Zionist conspiracy. Like I said, his theories are absurd.

    In short, I don’t pay much attention to Ron Paul.

  • Achance

    that kind of decadent living in Comrade Obama’s brave new world. I don’t have a big house, but I do have unused rooms, so I guess mine will be parcelled out and, of course, my boat will have to be confiscated and placed in some sort of public service; can’t have things like that in private hands.

  • lineholder

    is any country eligible to purchase those holding? Could Syria or Iran or India buy those holdings? What happens to us if something along these lines take place?

  • pilgrim

    http://www.redstate.com/nighttwister/2010/05/03/we-know-where-you-live/

    A 30 second spot compliments of the commonwealth of PA.

  • mnewcomb

    don’t you like about his advice about money?

    The spending we are seeing today (Obamacare, cap & trade, regulations, FDA, etc…) are all because the Federal Reserve can create money to feed into the Congressional spending machine.

    Take away that power to create money and the spending will stop.

  • http://www.periodictablet.com superamerican

    I hope the rest of the country can understand what Obama and his henchmen are doing to this country. Regulating the private sector to death. That’s the death of our country. How did we allow — support — this? By starting businesses, hiring people, working and producing all the while the government hired activists to change it from within. The Left-wing media are accomplices. They simply hated Bush. Still hate him. And a DJ waltzed up, read his speeches and beat an old man. That’s where we are now. The November elections can emasculate Obama then November 2012 Finally elect someone that is a grown-up who can lead the country through the really tough times of digging out of 50 years of Democrat Rule…

    Http://www.periodictablet.com

    Superamerican

  • notinkansas

    We have lived in China for the past 2.5 years and we can certainly attest to what you just described above. I can’t wait for your column to come out. We can’t wait to be in our beloved American again so we can fight what this idiodic gov is doing to it.

  • http://Inform_This_Mind@yahoogroups.com Wade

    “Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add within the limits of the law, because law is often but the tyrant’s will, and always so when it violates the rights of the individual.” ~Thomas Jefferson

    Another concept that divides collectivism from individualism has to do with the way people are treated under the law. Individualists believe that no two people are exactly alike,and each one is superior or inferior to others in many ways but, under law, they should all be treated equally. Collectivists believe that the law should treat people unequally in order to bring about desirable changes in society. They view the world as tragically imperfect.
    They see poverty and suffering and injustice and they conclude that something must be done to alter the forces that have produced these effects. They think of themselves as social engineers who have the wisdom to restructure society to a more humane and logical order.To do this, they must intervene in the affairs of men at all levels and redirect their activities according to a master plan. That means they must redistribute wealth and use the police power of the state to enforce prescribed behavior.
    The consequence of this mindset can be seen everywhere in society today. Almost every country in the world has a tax system designed to treat people unequally depending on their income, their marital status, the number of children they have, their age, and the type of investments they may have. The purpose of this arrangement is to redistribute wealth,which means to favor some classes over others. In some cases, there are bizarre loopholes written into the tax laws just to favor one corporation or one politically influential group.
    Other laws provide tax-exemption and subsidies to favored groups or corporations.Inequality is the whole purpose of these laws.
    In the realm of social relationships, there are laws to establish racial quotas, gender quotas, affirmative-action initiatives, and to prohibit expressions of opinion that may be objectionable to some group or to the master planners. In all of these measures, there is an unequal application of the law based on what group or class you happen to be in or on what opinion you hold. We are told that all of this is necessary to accomplish a desirable change
    in society. Yet, after more than a hundred years of social engineering, there is not one place on the globe where collectivists can point with pride and show where their master plan has actually worked as they predicted. There have been many books written about the collectivist utopia, but they never materialized in the real world. Wherever collectivism has been applied, the results have been more poverty than before, more suffering than before, and certainly more injustice than before. There is a better way. Individualism is based on the premise that all citizens should be equal under law, regardless of their national origin, race, religion, gender, education, economic status, life style, or political opinion. Ed Griffen

  • Richard Mullins
  • Richard Mullins

    I’m sure that Macro and Micro economics are much easier than Organic and Inorganic chemistry. There has been somewhat of a housing bubble in Shanghai(it seems like the MSM isn’t all bad) and they seem to have quite a bit of banking problems. It looks a Dubai in sort of way. I can see all holdings in bonds being sold and 90% of the gold as well in order to pay off the debt. If they keep with the Euro buying, it really devalue the euro. If they sold the bonds, who would buy them? I also wonder what would happen to vast manufacturing capacity that won’t be used after the Country goes bust. I’m guessing that it might be really rough for both US and Chinese. I’m thinking of the whole ramifications of this in my head and will post it all later.

  • Richard Mullins

    Mostly because Iran will lose a major purchaser in the Chinese and so will the Syrians. For the Chinese, they would have to sell holdings and gold in order to pay off debt and liabilities. It’s not coming cheap but hey buying gold will be quite inexpensive. Basic economics says that more of something drives down price and more gold on the market will drive down prices.

  • lineholder

    What does this mean in a practical sense of us in this country? I know I’m showing my economics ignorance in asking this question, but if the value of gold bottoms out, what does this do?

  • Richard Mullins

    Although any one will Gold need to be worried. Let’s just say that those “Cash 4 Gold” places will be out of business. It will lose lots of value and I’m sure that Platinum,Palladium and Silver will drop in price too. I hope they cash their US bonds and just sell them. It might be a good time when that happens for some states to buy the Chinese gold on the cheap and run it up again. Sell it at the right time and get rid of the debt and liabilities. When the biggest states are debtless, pay off the national debt. It could be great after an austerity government of major cuts and higher taxes on a modern “Great Panic”. I’m sure people have heard of the “Great Panics” that happened in the latter end of the 19th Century here in the US.

    As for Organic and Inorganic chemistry, I’d have to talk with my dad. All that education and being a Medical Technologist is great to answer stuff like that.

  • Richard Mullins

    It sure doesn’t look good to me to see anyone going for the Redline in ecomonic growth(7-8% is redline). Our idiots in Washington might put us more in the fire if we keep up with the spending.

  • lineholder

    That’s an interesting idea. What about interest rates and inflation? Do you have any thoughts of what would be seeing on these issues? I’m picking your brain, I know, but you obviously understand more about economics than I do and I appreciate the input.

  • Richard Mullins

    and don’t forget to buy their gold too. The interest rates and inflation will go up after a Chinese meltdown but in a way it’s great that we don’t have a vast amount of Precious Metals(less chance of price shocks on the up and down of them). I must say I remember all of what I’ve been taught and now I seem to be putting it to good use. I’m just a simpleton but if I had an army of good economists, I sure I can fix the problem.

  • lineholder

    If you ever need info on EHR’s, i.e. electronic health records, I’ll be glad to return the favor.

  • Leopard1996
  • davesinsanantonio

    Stop the spending, and there is no need to “create” money to pay for it. The Congress will still spend if we let them, they will just vote to increase the debt ceiling. It is the runaway spending that is the problem!

  • jolinarofmalkshur

    “The left is targeting corporations and other private sector job producers as evil and corrupt because they want to undermine capitalism and move us to socialism”.
    ====================

    And Halliburton, BP and India (Bopal) make it happen!!!! to mention only a few.
    —————————————————————————————–

    1. Halliburton for stealing money in the past. I watched a program on Panorama, here, in UK, by Jane Corbin called “23 billions missing”. From the program I gathered that Halliburton has stolen the money. Alan Graystone, a lawyer acting for the whistleblowers, ended the program by saying that the only ones who profited from reconstruction of Iraq are Iran, Al-Qaida and Halliburton.

    2. Halliburton and BP not putting enough and correct safety valves on oil drilling pipes=> oil spill in Louisiana.

    3. Bopal or who inherited Bopal paying to the Indian state damages instead direct to the affected people by the explosion and its aftermath. The gangsters from the Indian state – like despicable thieves and antichrists what they are- pocketed the bulk of the money and gave peanuts (next to nothing) to the affected people.

    These booboos and the ones who are responsible for them pave the way for socialism. And when in socialism things do not work out as expected, a terrorist state will be installed to keep the complainers in check(hence Obama and his loony liberals are for gun control, even at international level, so, that the ordinary people won’t be able to put up too much of resistance when this happens). Been there, observed being done plenty. I was born and raised in Romania, a red terrorist country through and through (oh! sorry, they call it communism: in the name of the proletariat they perpretated crimes against humanity that eclipsed the Huns invasions).

    Before the VietNam war, the government in South Vietnam was acussed of corruption: we know this because the Budhist monks demonstarted against the government and the press there were allowed to investigate and report. VietCong and the imperialists of this world told themselves: corruption???No problemos!!! The VietCong prepares for invasion to seize the opportunity. VietNam war starts. VietNam war is lost on purpose, by systematic sabotage perpetrated by traitors in first world countries, first world countries which acted on behalf of South VietNam,… and VietCong moves in. The corruption is one thousand times more rampant but nobody knows about it because the terror state installed does not leak information about it. The Bhudist monks are systematically killed, killing fields start to build up. This is the natural way of things when booboos like above (1,2,3) happens. These private companies and their share holders should act EXTREMLY RESPONSIBLE in every thing what they are doing, decision taking etc; if they do not act responsible, they and their descendants would live to regret it: socialism followed by red terrorism is around the corner.

    Jolinar
    I wonder if Halliburton works for KGB.

  • Brian Hibbert

    asking the Fed Chairman about anything. (Better is to watch it live on C-Span). Then tell me that Ron Paul understands anything about money or economics.

    Like I said, he may occasionally say things that are right, but he is not the person I would go to for advice about money.

    And if you want more specific criticism, I think his ideas on the gold standard are unworkable on the face of them, that they won’t solve the problems he says they’ll solve, and they they’ll cause a whole rash of new problems that we don;t currently deal with. I really don’t want to get into an argument on the gold standard here because that would take us WAY too far off topic.

  • bobmontgomery

    The US education system has been turning out little communists for two generations now. If those interested in restoration of America (transformation has already largely been accomplished) want to solve problem long term they are going to have to shut off the flow. Containment of the damage is just part of it.
    When you reach the point where avowed COMMUNISTS, not just socialists of the European type, are PASSED THROUGH THE VETTING SYSTEM
    , BOTH THE GOVERNMENT AND THE MEDIA, and given positions in the administration of the Presidency of the United States, you have reached a certain tipping point.
    Deploy the booms to contain the damage, yes, but also send teams below the surface to shut off the flow.