Socialism Or Is It?

This Time/CNN.com article compares the current move to bail out Wall Street to the statist version of Social Democracy practiced in France.  They do so with some whit and candor so it's worth a read.  They argue that America is going socialist!  But is this Wall Street bail out, and the auto industry bail out that is almost sure to be next, really socialism? 

There are a lot of different varieties of socialism.  But most of them have at their root a set of policies designed to favor labor as opposed to capital.  The state also plays a major role and often, nationalization of major companies if they are about to fail.  But not all socialist movements emphasize nationalization.  French socialists do - but so do French nationalists (more on that later).  Scandinavian social democrats have rarely advocated nationalization of industries.  

This bail out also resembles something even more bothersome rhetorically to Americans... fascism.  Like socialists, fascists advocate a strong role for the state.  However, where socialist policies tend to be biased in favor of labor, fascists frequently bias their policies in favor of an inner circle of people and companies that are close to the state.  Fascism is not the free-market run wild.  Indeed, opposition to free market policies is a basic component of fascist political economy.  Rather fascism is a statist ideology in which the state does things like establish price controls or award monopolies or oligopolies in various sectors.  These things are done with little deliberation and often in secret.

I know it will sound like I'm going over the top here but I honestly see more similarities between where the Republicans advocate these days and fascism than with any other ideological group.

And will this solve the problem?  The real problem globally is that there is a shortage of available capital.  Too much of it is being soaked up to service government debt.  Borrowing another 3/4 of a trillion dollars to plug the gaps now will just add to that debt.  At best, this postpones the moment of crisis.  Ultimately we will have to address this public debt problem.  And it's not just an American issue.  Most industrialized democracies have these kinds of debt problems - many of them have usually had more debt as a share of GDP than the US has had over the last 25 years.