Arnold Kling  

Progressive Corporatism and the Resistance

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Simon Johnson on Money and Pow... How Will Daniel Akst Like S...

Glenn Reynolds comments on the plight of Freddie Mac as reported in today's Washington Post.


[The Post reports]

When Freddie Mac's executives concluded a few weeks ago that they had to disclose that the government's management of the McLean company was undermining its profitability and would cost it tens of billions of dollars, the firm's regulator urged it not to do so, according to several sources familiar with the matter.

Freddie Mac executives refused to bend. The clash grew so severe that they threatened to go to the Securities and Exchange Commission, which oversees corporate disclosures, to secure a ruling that the regulator's request was out of line. The company's regulator backed down, the sources said.


Remember, when a private company wants to cover up billions in losses and the responsibility for them, that's a major scandal and proof of the evils of capitalism. But when a government regulator does the same thing, hat's just how people are, these things happen, whaddyagonnado...

Read the whole thing. You can see how the U.S is going to function under what I call Progressive Corporatism.

Another post you should read is one that was written last month by Pete Boettke.


Perhaps a more timely book to read than even Hayek would be Mises's Omnipotent Government and in particular the sections on the German economic model of national socialist policy. Our current policy path seems more along those lines, [rather than] outright expropriation of private property by the government. In the German model, Mises argued, private ownership was nominally maintained and the appearance of normal prices, wages and markets was kept. But in reality entrepreneurs were replaced by government-appointed shop managers, and the government dictated how the "capitalist" must use his funds and what wages workers must work for. Government effectively controlled production and distribution.

At this point, I think that the relevant political divide is not between the two parties. It is between the forces of Progressive Corporatism and the (much smaller) forces of The Resistance.

Boettke quotes a woman who resisted the Nazis and ultimately was executed.


Sophie Scholl wrote the following about the damage to the German people caused by fascism: "The real damage is done by those millions who want to 'survive.' The honest men who just want to be left in peace. Those who don't want their little lives disturbed by anything bigger than themselves. Those with no sides and no causes. Those who won't take measure of their own strength, for fear of antagonizing their own weakness. Those who don't like to make waves or enemies. Those for whom freedom, honour, truth, and principles are only literature. Those who live small, mate small, die small. It's the reductionist approach to life: if you keep it small, you'll keep it under control. If you don't make any noise, the bogeyman won't find you. But it's all an illusion, because they die too, those people who roll up their spirits into tiny little balls so as to be safe. Safe?! From what? Life is always on the edge of death; narrow streets lead to the same place as wide avenues, and a little candle burns itself out just like a flaming torch does. I choose my own way to burn."

For now, I think that mockery is the most useful form of resistance.


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CATEGORIES: Political Economy



TRACKBACKS (2 to date)
TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/1663
The author at The Blog of Record in a related article titled The Coming Progressive Corporatism writes:
    The economic policies being implemented now are closer to the economic model of a certain European country in the 1930s than to outright government-owns-all socialism: Perhaps a more timely book to read than even Hayek would be Mises’s Omnipotent... [Tracked on March 27, 2009 11:57 PM]
The author at Ed Driscoll in a related article titled Oooh, That Smell writes:
    Matthew Vadum writes, “There is a whiff of Fascism emanating from the Obama White House”: Although there have been some incidents of government exercising minor control over industry during wartime, this aggressive assault on American ... [Tracked on March 29, 2009 11:59 PM]
COMMENTS (13 to date)
megapolisomancy writes:

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fundamentalist writes:

"At this point, I think that the relevant political divide is not between the two parties. It is between the forces of Progressive Corporatism and the (much smaller) forces of The Resistance."

Excellent point. Republicans are socialist light. Had McCain won the presidency, his policies would have been no different from Obama's. Obama's victory saved Republicans the embarassment of promoting all out socialism.

Crawdad writes:

Robert Higgs has been calling this for some time. He refers to it as "participatory fascism."

Niccolo writes:

I don't know about dividing the situation between two sides.


I highly doubt that any other persons in office would be advocating what we advocate on the libertarian side of the ball.

If they did, they'd obviously be disqualified for office.

prose writes:

Progressive corporatism is a very impressive moniker. Now, we need to popularize this to make sure that the vast sweeping movement of change can be easily identified, traced and fought.

M. Simon writes:

We are in the Stimunism phase.

The Sheep Nazi writes:

Congratulations on the InstaCircle©, by the way:
Arnold Kling on Prrogressive Corporatism and the resistance thereto.

rich hern writes:

Liberal Fasiscm is what Progressive Corporatism is also know as. As an American who has studied history ( I am a CPA, BS at Univ Of Ill at Chicago) and an MBA in International Business, I have studied what Italy, Spain, Germany and several eastern European ans South American nation did in the 1930s. What PBO is trying to do is very, very close to what was done in these countries in the 1930s. Argentina was widely considered a near big power in the early 1900 hundreds, but after Peron, Mr then Mrs, Argentina is a second rate nation, with Italy, Spain, Hungary, Germany and France not far ahead. Is this what WE THE PEOPLE are going to stand for? A SECOND 1776 is needed NOW.

Max writes:

If you want to popularize this principle - Progressive Corporatism - I think that you should drop the designator 'Progressive', and simply use Corporatism.

Otherwise I think that you'll find that your arguments are dismissed out of hand, simply for the fact that Corporatism will be mistaken for a free market principle due to the root 'corporate' and its association w/ commercial corporations. Most people will regard Progressive Corporatism as a self-contradictory term - i.e. Progressives oppose free markets and so they are anti-Corporatist by definition. 99% of your efforts would go to debating this argument.

Spinoneone writes:

The National Socialist Democratic Party, otherwise called the Obama Administration, is now and always has been socialist. They use the term "progressive" because "liberal" has fallen out of favor and they believe they can improve their arguments for a reversion to Europe 1930 by using the term progressive. "Fool all of the people some of the time and some of the people all of the time" and those are pretty good odds. Fascist Italy was called a corporatist state at the time. That was understood to mean medium to large businesses were controlled directly or indirectly by the government and the little guys were intimidated as required. Given where Geithner wants to go coupled with the new "Americorps" Act, we are moving there very rapidly. Oh, and don't forget Obama is ramping up the Afghanistan/Pakistan war so he has something with which to divert the attention of the masses and to create a continuing "crisis."

Tim writes:

Max wrote: "If you want to popularize this principle - Progressive Corporatism - I think that you should drop the designator 'Progressive', and simply use Corporatism."

I half agree - substitute "Progressive" with "Public" and you'll get conservatives on board.

That is, if you're interested in building a coalition to stop Public Corporatism.

ChipD writes:

I think there is too much fixation on trying to shoehorn today's events into the socialism/capitalism debate.
For example, check out William Geider's piece in the Nation -
http://www.thenation.com/doc/20090413/greider?rel=hp_picks

and Simon Johnson's piece in Atlantic -
http://www.theatlantic.com/doc/200905/imf-advice

Both make the point that there is a very cozy and incestuous relationship between Wall Street and Washington, and the political parties, both right and left, have a mutually beneficial relationship with the very companies they claim to regulate.

The GOP is not really in favor of anything resembling a "free market" and the Democrats are not really enemies of the corporations.

The furious debate and name calling only hides the fact that both parties have become indebted to the moneyed powers, and act mostly in its interest.

Joshua Lyle writes:

Max,
but aren't those the important arguments to be making?

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