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Socialism for the rich

Thursday, May 25, 2006

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The job description for role of “Conservative Politician” is pretty clear. One of the key requirements is a commitment to removing government controls on the economy, so that the market economy can function without interference. For example, in Canada, we see our current federal government cancelling plans for a national childcare program and eliminating funding for initiatives to combat global warming.

But, closer scrutiny reveals that this rule applies only to programs that actually benefit the majority of people (just as deficits are a bad thing only when non-conservative governments incur them). When it comes to the government actions that would make the rich even richer and corporations even more profitable, government action is a very good thing indeed. Think of it as socialism for the rich, and capitalism for the rest of us.

American Economist Dean Baker (of the progressive Center for Economic and Policy Research) has written a new book that explores this particular hypocrisy. “The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer,” available for free at www.conservativenannystate.org, points out that “The key flaw in the stance that most progressives have taken on economic issues is that they have accepted a framing whereby conservatives are assumed to support market outcomes, while progressives want to rely on the government. This framing leads progressives to futilely lash out against markets, rather than examining the factors that lead to undesirable market outcomes.... The reality is that conservatives have been quite actively using the power of the government to shape market outcomes in ways that redistribute income upward. However, conservatives have been clever enough to not own up to their role in this process, pretending all along that everything is just the natural working of the market. And, progressives have been foolish enough to go along with this view.”

Here are a few other choice excerpts:

  • “Both conservatives and liberals want government intervention. The difference between them is the goal of government intervention, and the fact that conservatives are smart enough to conceal their dependence on the government. Conservatives want to use the government to distribute income upward to higher paid workers, business owners, and investors. They support the establishment of rules and structures that have this effect.”
  • “It is accurate to say that conservatives don’t like big government social programs, but not because they don’t like big government. The problem with big government social programs is that they tend to distribute money downward, or provide benefits to large numbers of people. That is not the conservative agenda – the agenda is getting the money flowing upward, and for this, big government is just fine. Of course, conservatives don’t own up to the fact that the policies they favor are forms of government intervention. Conservatives do their best to portray the forms of government intervention that they favor, for example, patent and copyright protection, as simply part of the natural order of things. This makes these policies much harder to challenge politically.”
  • “It is not surprising that conservatives would fashion their agenda in a way that makes it more palatable to the bulk of the population, most of whom are not wealthy and therefore do not benefit from policies that distribute income upward. However, it is surprising that so many liberals and progressives, who oppose conservative policies, eagerly accept the conservatives’ framing of the national debate over economic and social policy…. As long as liberals allow conservatives to write the script from which liberals argue, they will be at a major disadvantage in policy debates and politics. The conservative framing of issues is so deeply embedded that it has been widely accepted by ostensibly neutral actors, such as policy professionals or the news media that report on national politics.”

Baker cites a number of different policy areas in which government intervention is essential to preserving and enhancing wealth in the hands of a few. For example, laws that restrict the circumstances under which corporations can be sued make it impossible for average citizens to seek redress when they are wronged. Laws that make it harder to declare bankruptcy allow banks and other financing companies to take grant credit without having to worry about whether the person receiving the loan can afford to pay it back. Even criminal law is biased against the poor. Compare the penalties given to welfare cheats to those imposed on businesses that cheat their customers or those given to tax cheats.

Likewise, corporations rely on governments to give them their status and to set the rules for corporate governance. This limits the liability of the individuals who have formed or hold shares in the corporation. But, when it comes to government action to control how that corporation operations – for example, governance rules that would guarantee the independence of directors or rules that would limit CEO salaries – corporations are very much opposed to government intervention.

When governments act to control what people can do with their property (for environmental or planning purposes), conservatives get all up in arms about the value of their property being eroded. But, you’ll never here them offering to compensate the government when it does things that increase their property value – such as building a highway or a school, or giving them a favourable zone change. As Baker points out, “this is exactly the sort of nanny state that conservatives want – it only gives them handouts, it never takes anything away.”
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  1. Posted by: tom on May 30, 2006 @ 9:48pm

    got to say, the harper government is good for the rural areas and the western provinces and people who own their own buisnesses. the people who tend to be less affected by corporations?

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