Skip to comments.Public/Private Plunder - Why Progressive Corporatism Sucks
Posted on 05/13/2013 10:59:51 AM PDT by guyshomenet
Wealthy Californians would like to thank you for buying them expensive automobiles.
Didnt know you that generous, eh?
In fairly recent political history, left-of-center ideologues and other special needs people have advocated public/private partnerships. Once opposed to anything corporate, alleged progressives now embrace funneling tax funds to corporations of every ilk that sustain their ideology, regardless of how insane the plot sounds to common folks with common sense. No less of a man than Bill Clinton (and given his serial freelance philandering, there is no lesser of a man) has focused his face into television cameras proclaiming that government funded private enterprise is wonderful, progressive, modern and futuristic. Oddly, this is not a new concept.
Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power. Benito MussoliniThe fundamental flaw of feeding private organizations with public funds is that it rarely benefits the public. Choices are always made between policy and profit, between a perceived perfection and the elimination of alternatives. It is more than a clown cadre placing all-or-nothing bets by typically choosing their backers ventures. Public/private partnerships are the triumph of narrowing options and assuring that money finds its way into already well-padded pockets.
Which brings us to a green president using your green cash to buy cars for blue bloods in the Golden State.
If you havent seen a Tesla, prepare to be wowed by style, technology and sticker shock. These vehicles are not made for common folks. With list prices starting at $62,000 and peaking at well over $100,000, odds are this is not the car youll buy your daughter for high school graduation. Yet the Obama Administration, famous for making such wise green energy public/private decisions such as Solydra, also substantially subsidizes your rich neighbors Tesla, to the tune of $7,500 (a sum with which you can almost buy a new Nissan). A recent report also notes that Californias bankrupt government kicks in as much as $35,000 for each car Tesla manufactures (just the ones built, not actually sold). All told, as much as $45,000 of taxpayer partnership goes into a Tesla, making up 72% of the MSRP for the cheap model.
You can get a better government, but you cant pay more.
Tesla is not alone in the public/private plunder. Bad governance poster child General Motors vends their arguably interesting Chevy Volt reverse hybrid car that sales figures show nobody wants (such vehicles make up about 0.1% of all new car sales). Buyers arent buying despite the feds offering the same $7,500 subsidy and a myriad of other incentives, making the unaffordable $49,000 Volt affordable except by people who make so little they cant afford any new car, yet pay taxes to buy them for wealthier folks.
A wag once said If mass transit were such a great idea, corporations would have done it long ago. They didnt because the plunder known as public/private partnerships was not offered to them (well, they were offered to railroads, but lets not echo how this was also of unilateral profitability).
The leftist a are pushing a new form of capitalism by having a state after state approve the creation of Benefit Corporations. Benefit Corporations allow the profits to go to non-profit purposes rather than share holders.
Important note: The idea of “public/private partnerships” was originally innovated by national socialists (fascists), after regular socialist nationalization schemes had failed so miserably. It became the centerpiece to “fascist economics” in national socialist economies, as nationalization of industry had been in socialist economies.
In a capitalist economy, industry produces what it wants to produce in the best way possible for its bottom line.
When socialists nationalize private industry, government is neither skilled nor capable of producing what private industry produces, and has no motivation to do so efficiently.
And while little obviously remains of fascist economics in Europe, when fascism was popular before the war, the Roosevelt administration adopted some of its ideas, among which was embracing the idea of “public/private partnerships”. Some of which still remain.
In effect, while the government does not directly control production, it directs what is to be produced, and leaves it up to private industry to do so.
In some situations, this *can* work, such as when the Pentagon puts out a request for a new pistol. Dozens of companies produce their own versions, and after trials, one is selected for the production contract.
However, it *fails* when, for example the Obama administration, presents a contract based on “crony capitalism”, to a single company, to innovate a new technology. The simple logic is that one company will be able to innovate less than many companies.
But the real purpose of the exercise was *not* to innovate, but to redistribute money to political cronies. Which was why such enterprises failed so miserably. While a hundred inventors can produce a dozen good innovations after being told about what to produce, paying one inventor to innovate a particular thing is far less likely to happen.
Not so much. Public-private partnerships have been around for a very long time, in the form of state-granted monopolies.
The latest incarnation does have a lot to do with the failure of socialism, but it was driven by people like Margaret Thatcher.
Whatever "public-private partnerships are in America today, for Thatcher they were a way of getting away from state-owned and state-run enterprises, and introducing free market incentives into public services. Stephen Harper is doing something similar in Canada now.
That may be different from what's going on in the US now, but the talk about fascism doesn't help clarify just what public-private partnerships are and how they originated. I don't disagree with the rest of what you say, though.
I would actually distinguish between government endorsement or provision of a legal monopoly with PPP, which in its 19th Century origins and later embrace was usually called “corporatism”.
One of its early proponents was Adam Müller, an advisor to Prince Metternich in what is now eastern Germany and Austria. Müller propounded his views as an antidote to the twin dangers of the egalitarianism of the French Revolution and the laissez faire economics of Adam Smith.
Coupled with the anti-market sentiments of the medieval culture there was the notion that the rulers of the state had a vital role in promoting “social justice”. Thus corporatism was formulated as a system that emphasized the postive role of the state in guaranteeing social justice and suppressing the “moral and social chaos” of the population pursuing their own individual self-interests.
Corporatist Regimes of
the Early Twentieth Century
National Corporatism, Italy, 1922-1945, Benito Mussolini
Country, Religion, Monarchy, Spain, 1923-1930, Miguel Primo
National Socialism, Germany, 1933-1945, Adolph Hitler
National Syndicalism, Spain, 1936-1973, Francisco Franco
New State, Portugal, 1932-1968, Antonio Salazar
New State, Brazil, 1933-1945, Getulio Vargas
New Deal, United States, 1933-1945, Franklin Roosevelt
Third Hellenic Civilization, Greece, 1936-1941, Ioannis Metaxas
Justice Party, Argentina, 1943-1955, Juan Peron
In the above table several of the regimes were brutal, totalitarian dictatorships, usually labeled fascist, but not all the regimes that had a corporatist foundation were fascist. In particular, the Roosevelt New Deal despite its many faults could not be described as fascist. But definitely the New Deal was corporatist. The architect for the initial New Deal program was General Hugh Johnson. Johnson had been the administrator of the military mobilization program for the U.S. under Woodrow Wilson during World War I.
Hugh Johnson had become an admirer of Mussolini’s National Corporatist system in Italy and he drew upon the Italian experience in formulating the New Deal. It should be noted that many elements of the early New Deal were later declared unconstitutional and abandoned, but some elements such as the National Labor Relations Act which promoted unionization of the American labor force are still in effect.
Some of the New Dealer saw the Tennessee Valley Authority as more than a public power enterprise. They hoped to make TVA a model for the creation of regional political units which would replace state governments.
The model for TVA was the river development schemes carried out in Spain in the 1920’s under the government of Miguel Primo de Rivera. Jose Antonio Primo de Rivera, the son of Miguel Primo de Rivera, was the founder of Franco’s National Syndicalism.
Corporatism today includes the social democratic regimes of Europe and the Americas, but also the East Asian and Islamic fundamentalist regimes such as Taiwan, Singapore and Iran. The Islamic socialist states such as Syria, Libya and Algeria are more corporatist than socialist, as was Iraq under Saddam Hussain. The formerly communist regimes such as Russia and China are now clearly corporatist in economic philosphy although not in name.
But this doesn't relate very will to real-world public-private partnerships in transportation, education, utilities, sanitation, or corrections.
What Obama's doing -- crony capitalism, picking winners and losers to reward or punish -- is something else as well.