Ron Paul and the Blindness of Ideological Belief

Lew Rockwell, Ron Paul, Free Markets

Ron Paul has a piece up at Lew Rockwell's site about the mischaracterizations of Obama as a socialist. He is obviously right about that, but wrong about much else, as usual.

Proceed, sir.

Lately many have characterized this administration as socialist, or having strong socialist leanings. I differ with this characterization. This is not to say Mr. Obama believes in free-markets by any means. On the contrary, he has done and said much that demonstrates his fundamental misunderstanding and hostility towards the truly free market. But a closer, honest examination of his policies and actions in office reveals that, much like the previous administration, he is very much a corporatist. This in many ways can be more insidious and worse than being an outright socialist.

I just want to stop here and go on the record for first time readers by saying socialism is certainly not insidious. It may or may not be the best system for creating the highest amount of profits, but that really has nothing to do with whether it's a good system or not. That, of course, will have to remain a topic for another discussion.

Socialism is a system where the government directly owns and manages businesses. 

This is untrue. Socialism is a system where the means of production are owned by workers and administered either by them or in their name by the state. In a social democracy, the two groups are one and the same.

Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government. 

This is also untrue. Ron Paul hates government, so he places all the blame on government while accusing it of taking over business. But in a corporate state, business and government are one and the same. And if business is governing, then there can be no democracy. This is, of course, where we are heading in the United States. The Obama administration has been a continuation of the Bush administration in this regard.

In a corporatist state, government officials often act in collusion with their favored business interests to design polices that give those interests a monopoly position, to the detriment of both competitors and consumers.

And, even more importantly, to the detriment of workers, who soon find themselves at the mercy of large corporations and their government policies.

More to the point, in a corporatist state, there is no actual distinction between government and corporate officials. They are often interchangeable, and sometimes occupy both positions at once. Their loyalty is to each other, and their concern for the general citizenry is limited to ensuring that there are no armed rebellions.

This is exactly where we find ourselves today. Retired generals who serve as special advisors to the government at the same time they serve on the boards of defense contractors (who stand to make billions from each new war) were regularly appearing on TV advocating the invasion of Iraq. Where they government officials? Were they businessmen? There is no longer any real distinction.

Health insurance CEO's literally wrote much of the legislation in the recent health reform bill. Blackwater managers directly commanded US troops in Iraq. Hank Paulson went directly from his position as CEO at Goldman Sachs to his next job as Treasury Secretary, where he was responsible for overseeing his former company. Did he even need to change offices?

A careful examination of the policies pursued by the Obama administration and his allies in Congress shows that their agenda is corporatist. For example, the health care bill that recently passed does not establish a Canadian-style government-run single-payer health care system. 

(Which it would have done if it actually reflected the wishes of most Americans.)

Instead, it relies on mandates forcing every American to purchase private health insurance or pay a fine. It also includes subsidies for low-income Americans and government-run health care “exchanges.” Contrary to the claims of the proponents of the health care bill, large insurance and pharmaceutical companies were enthusiastic supporters of many provisions of this legislation because they knew in the end their bottom lines would be enriched by Obamacare.

Absolutely true, although calling it "Obamacare" belies this point, and, while sure to incite a rabid response from his Tea Party minions, obscures the fact that his role was one of merely marketing the product, not creating it. That job was left to the industry, which fought not with Congress or the administration, but amongst each other over which sector would get the biggest pound of flesh.

Similarly, Obama's “cap-and-trade” legislation provides subsidies and specials privileges to large businesses that engage in “carbon trading.” This is why large corporations, such as General Electric support cap-and-trade.

Also true. Instead of making them buy the carbon credits from the peasants who will bear the costs of pollution, the industry plans to just give them to themselves, at which point they can sell them back to the taxpayer in the event that the taxpayer actually wants to stop carbon emissions. And of course, if they do sell them back, they'll just give themselves some more.

To call the President a corporatist is not to soft-pedal criticism of his administration. It is merely a more accurate description of the President’s agenda.

And Ron Paul will probably be called a Marxist for this statement.

When he is a called a socialist, the President and his defenders can easily deflect that charge by pointing out that the historical meaning of socialism is government ownership of industry; under the President’s policies, industry remains in nominally private hands. Using the more accurate term – corporatism – forces the President to defend his policies that increase government control of private industries and expand de facto subsidies to big businesses. 

Although, given the fact that corporate media is also a part of the virtual government, it's unlikely that he'll be forced to defend himself any time soon.

This also promotes the understanding that though the current system may not be pure socialism, neither is it free-market since government controls the private sector through taxes, regulations, and subsidies, and has done so for decades.

It's amazing that Ron Paul can't take the next logical step. He's been so sure that businesses operating in a free market are the cure for all that ails us that he can't see that in a free market, corporatism is the inevitable result. If there are no rules, why shouldn't the corporate world consolidate into large companies and then take over government?

In fact, the last 30 years have been an experiment in destroying social democracies and anyone else who got in the way of corporate interests,  from Chile to Argentina to China to Russia to Iraq and now finally right here in the United States. It's all been done in the name of Ron Paul's beloved free markets. The free market philosophy has triumphed, and it has led us to this place: the Corporate States of America- authoritarian rule by an elite who have consolidated political power and the means of production. This fact is so glaringly self-obvious that it is astonishing that Paul cannot see it, and yet that is the nature of ideology. It is that blinding.

Using precise terms can prevent future statists from successfully blaming the inevitable failure of their programs on the remnants of the free market that are still allowed to exist. 

Remnants? There has never been a free market. You cannot have an "kind of" free market. It's like being "kind of" pregnant. The quest for a free market is an impossible one; it results not in free markets (which no one really wants anyway), but in the consolidation of power by those born into it or lucky enough to attain it. Once this consolidation reaches a critical mass, reversing it will become nearly impossible, as the corporate state will own both the means of production and the political system by which it is maintained.

The problem isn't free markets. They are a myth. The problem is that the quest for free markets inevitably results in a corporatist state-the same corporatist state that Ron Paul professes to hate.

We must not allow the disastrous results of corporatism to be ascribed incorrectly to free market capitalism or used as a justification for more government expansion. 

To what else, then, would you ascribe it? It has been the direct result, to varying degrees, of every single instance of free-market capitalism. It's not a bug; it's a feature. There is not one single example in the history of the entire human race of a successful free market system outside of Ron Paul's imagination.

And the reason for that is simple. It's a theory. It's an elaborate theory, yet one that seems simple enough to be understood by your average person. It's appealing because it tells you that all you have to do is be selfish and the world will be perfect. But it's a theory. It has never been tried because it fails to take into account one major thing: the fact that human beings never have complete information, and don't always behave in the perfectly rational ways that this theory requires them to do. In other words, it's a beautiful theory ruined by imperfect people.

And so who are you going to believe-your eyes that tell you that every time free markets are tried, they result in a corporate state, or Ron Paul, who insists that "It shouldn't happen that way! That's not how I planned it!"?

Most importantly, we must learn what freedom really is and educate others on how infringements on our economic liberties caused our economic woes in the first place. 

What is true freedom, Mr. Paul? Is it the freedom to choose between food and health care while executives eat caviar in their private jets? Is it the freedom to defraud pension funds out of billions of dollars of retirement funds so that Wall Street execs can buy another island? Is it the freedom to trick unsophisticated 20 year olds into going into credit card debt which will take them years to dig themselves out of? Is it the freedom to sell extremely complex and rigged financial products to unsuspecting clients, while taking out insurance on them with AIG so that you get paid off when they fail? Is it the freedom to threaten the poor and middle class taxpayer with the complete destruction of the economy if they don't pay those multi-billion dollar insurance claims when AIG fails? Is it, as Matt Taibbi puts it, the freedom to "sell some working father a car with wobbly brakes, then buy life insurance policies on that customer and his kids"?

Government is the problem; it cannot be the solution.

In a corporate state, this is true. In a democracy, government is us.