Bryan Caplan  

Great Question: The Scarcity of Social Democratic Triumphalism

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Don Boudreaux raises a deep question I've often asked myself:

But if I were a pro-regulation and high-tax kinda guy, why would I dispute the claim that America's economy has performed remarkably well for everyone even since 1973? Why would I not say "See, the government programs enacted from the New Deal forward are working!"...

In short, despite what some pundits mysteriously assert, America during the past twenty-five to thirty-five years has emphatically not been a laissez-faire society. Not even close. So why do so many persons on the political left see in the economic data of the past three decades a compelling case for even greater government control over our lives and pocketbooks? And why don't more of these same persons on the left respond to those of us who advocate less government by pointing to the evidence of continued and widespread growth in prosperity by saying proudly "See! We're right and you're wrong: government intervention does work well!"

When I asked my favorite Democrat in the world this question (and scrupulously tried to avoid leading the witness), he cloned my own view: Facts notwithstanding, people believe that "the System" in the U.S. and Europe is capitalism. Good results reflect well on the System; bad results reflect badly on the System.

But why is the System in even France or Sweden "capitalism" instead of "Social Democracy"? My favorite Democrat could only second my lame response: It's illogical, but that's how people see it. Until you've got something close to full-blown Communism, the System is capitalism, and to promote more government, you've got to argue that the System isn't working.


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COMMENTS (6 to date)
Les writes:

Why do most people believe that the "the system" is capitalism, when it is actually a mixed economy, with a significant public sector? Excellent question!

I think one answer is that politicians work very intensively and effectively to persuade the poorly-informed voters that we are constantly being threatened by impending doom from economic problems of market failure, and only immediate and massive government intervention can save us from:

a) The sub-prime mortgage epidemic.

b) The wholesale loss of good American jobs to low-wage, sweated foreign slave labor.

c) The horrors of severe "climate change" caused by dirty, smelly, toxic human industry and its inevitable greenhouse gas emissions.

d) The so-called hatred of deeply offended foreigners who are justly outraged by American arrogance, greed and savage aggression.

e) The encroachment on, pollution of, and utter desecration of pristine virgin lands by filthy oil companies, evil lumberjacks and barbarian engineers.

liberty writes:

Les, but that still doesn't explain why they don't explain that Social Democracy must save us from those evils of pure capitalism. Instead, it is still considered capitalism, if a bit of a managed, or nurtured one.

I think it comes from (a) the failings of management, such that those who favor bigger government want to put the failings onto capitalism, (b) the push for much greater intervention leads proponents to deny that they have achieved anything so far of their goals and (c) more recently, the failure of socialism has given them reason to avoid any related term for what they desire.

Hence, it is still to their advantage to call what we have capitalism and what they want socialism; and only at the edges take credit for any improvements (as a step in the right direction). But they also try to set the terms of the debate.

The gold standard is a joke to most people because its so obvious that we need a fiat currency to handle an advanced modern economy and its so obvious that FDR saves us from capitalism's great depression. That is setting the terms, and its best done without admitting that FDR introduced a large measure of socialism- its obvious that he introduced intervention, no need to say that- but then you argue that it was obviously not enough because we still A,B, and C ills (poverty, business cycles), which still get blamed on the system we have: capitalism. Until every last ill is stamped out, more intervention is required.

8 writes:

It is just as much a fault of those on the right. Perhaps out of fear that people would see the mixed economy as working very well, they are afraid to condemn the system. Healthcare is perhaps the best example today.

James R. Ament writes:

Liberty said,

"Until every last ill is stamped out, more intervention is required."

So I guess it's "capitalism" until we have a sufficient, i.e. relatively complete, governmental command and control system. In other words, what we have is simply not enough government. Oh, joy!

Floccina writes:

To get elected you must first convince people that ther is a problem and second convince people that you are the one that can solve it.

Dain writes:

"Facts notwithstanding, people believe that 'the System' in the U.S. and Europe is capitalism."

Perhaps because so many prominent conservatives and libertarians themselves wax eloquent about how America is devoted to "limited government and free enterprise".

One of my favorite writers, Kevin Carson (one of the few contemporary mutualists), notes that it's in the interest of large corporatitons to defend their actions by appealing to the relatively populist American ideal of "healthy competition" and freedom of choice. Mainstream liberals take advantage of this rhetoric to make the case for big government.

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