Our “Socialist” Past

Articles of ConfederationThe Republican Party wants you to see, in every exercise of federal power, the creeping spectre of socialism. Of course, this is definitionally and historically wrong. Although the scope of federal involvement in common affairs has always been the issue that divides Americans most, we have also, as a nation, historically come down on the side of more, rather than less, federal power, to undoubtedly beneficial results. Let’s examine.

The Articles of Confederation & the Constitution: the American Constitution is the paradigmatic proof that federal power is not always a bad thing. Immediately after securing our freedom from the British, we enacted a representative form of government by means of the Articles of Confederation, which created something closer to a confederacy than a federal republic. As an organizing document, they wholly failed: the federal government was powerless to tax or, essentially, pass any meaningful legislation. Critically, the power to regulate interstate commerce was completely absent. The results were disastrous. The Constitution massively reworked the state/federal balance, creating a union that, put simply, placed more emphasis on “United” than “States.” 222 years later, we’ve overcome challenges that would’ve stopped the confederated United States cold in its tracks.

Assumption & the First Report on Federal Credit: in ancient Rome, coins were manufactured by private mints, under state contract, and the public treasury consisted of, for the most part, what the consuls could haul out of the provinces. That’s basically what we had, too, in 1776, except we were also broke. Alexander Hamilton changed all that, by assuming all of the states’ war debts and, in five short years, building the financial institutions of a modern state. It was a massive power grab; and it was also wildly successful, there being no other option.

The Bank of the United States: despite spawning the greatest controversy of the early American Republic, the Bank of the United States, in its short history, successfully standardized American currency, ending rampant speculation and bringing to a successful close the Hamiltonian revolution started in the First Report. The Second Bank was considerably less successful, but by the time its charter expired, so had its role in America’s rapidly-evolving financial history.

The Reconstruction Amendments: the Bank was a costly and ultimately Pyrrhic victory for Federalists.  The price of the Reconstruction Amendments, though, was much higher, as they emerged only after the bloody, catastrophic Civil War. And yet none today can deny their efficacy. The Reconstruction Amendments (XII, XIV, XV) fundamentally altered the state/federal balance in a profoundly positive fashion, securing to all Americans, regardless of race or gender, the “blessings of liberty.” Though dearly bought, the result is a closer-knit, freer nation.

FDR’s New Deal: face it — pure laissez faire capitalism doesn’t work. This is the simple lesson of the 1800s. Whether caused by greed, corruption, or simply, well, panic, the financial “Panics” of the 19th century proved that a modern nation cannot successfully ignore its economy, or leave it entirely to private, self-interested actors. Make no mistake, capitalism works, and remains the engine of America’s success, but it works best complemented by a healthy regulatory regime. Regardless of your affection or distrust of government intervention in the economy, the New Deal is the reason you don’t have to worry about your money disappearing from your bank account tomorrow. Quite simply, revisionist history notwithstanding, the New Deal worked.

Medicare & Social Security: a “single payer” public insurance scheme may be too controversial even for today’s Democratic supermajority, but it’s been standard fare for American seniors (65+) for 44 years. Similarly, Social Security keeps 13 million seniors above the poverty line, despite concerns over its solvency. Certainly there are problems with both programs, but they’re by-and-large success stories, responsible for maintaining the health and well-being of our “Greatest Generation.”

It may be that “we’re all socialists now,” as Newsweek suggests. But if we accept the Republicans’ definition of socialism — “a system of government that taxes its citizens and uses state power to forge economic solutions” — we’ve been a “socialist state” for at least 200 wildly successful years. There will always be problems to solve, but we — and by “we,” I mean, “the Republican Party” — should focus on solving them, rather than dreaming up clever names to call our opponents.

18 comments

  1. “The problem with socialism is that eventually you run out of other people’s money.”

    —Margaret Thatcher

    1. As opposed to Thatcherism, in which the problem is everyone eventually runs out of money. :nods:

    2. Mike, you’re too good for the “socialist” canard. Or at least, I hope you are.

      1. I don’t know. If the suggestion of your post is that crying ‘socialism’ is unfair, I’m not sure I agree. The administration definitely likes their social programs.

      2. All together now — “social program” ≠ “socialism.”

        1. Ahhhh…but whole bunch of social programs does equal socialism.

        2. That’s a challenging line in the sand to draw. Also, look up the definition of socialism. Based on history and just common sense (someone call Beck!), we’re well-short of the line. Socialism would be when government regulation dominates or completely preempts the private sector. France, for example, and their dirigiste economy. But not us.

          1. How many large companies are taking their marching orders from the White House now that weren’t this time last year?

      3. Frankly, Mike, to a European, talking about “socialism” in a country where the highest tax bracket is a measly 35% and you only have the barest skeleton of a welfare system is simply laughable. If you’re looking for socialism, I’d suggest cranking the tax rate up to a respectable 45-50%, introducing universal single-payer health care, universal income support, and free tertiary education. At that point, you might qualify as a social democratic state. Then you can start working on nationalization of entirely key sectors of industry, extensive government control of the flow of capital and such.

        1. I’m not suggesting that we are socialist. I’m not suggesting that Obama’s actions are socialism. What I AM suggesting is that the Obama administration would have no problem with it if it were and are happy to make subtle moves in that direction.

        2. That’s a ridiculously awful slippery slope argument, and it’s the same as the worst of what you’re accusing the left. Moves towards ≠ the thing itself.

          1. Liberals like government and they like big programs…don’t they?

  2. Restart to avoid nestastrophe. So on your last point —

    GM was in bankruptcy and is now out. Goldman is clearly NOT taking White House orders. Note that the difference between regulation and socialism is a matter of degrees — when regulation approximates ownership, that’s socialism. But where regulation responsibly guides private investment, that’s American capitalism since 1945. And the only times we’ve gone beyond that line was when GM, etc., were in bankruptcy, which is, still, a province of the federal government, so not really scary.

    1. Look, during the Democratic primaries several of the candidates said they would favor a single-payer system. John Edwards admitted that creating a government plan would be the first step towards eventually eliminating all private insurers. Obama said that if we could do it all over that a single-payer plan would be the best route to take. Lots of experts believe the curent proposal would eventually kill private insurers. The CBO says the program will be far more expensive than the administration says it will be.

      In lieu of all this, why is it so unconceivable that the administration would be using the current proposal as a trojan horse to move us towards a single-payer system?

      We can’t have an honest debate when the party in power is lying about their intentions. You all need to just admit you prefer universal healthcare and then go from there.

    2. Yes many democrats would want single-payer, but that doesn’t mean there’s a conspiracy to make it happen.

      From what I had heard there were many stipulations on the table for the government plan to prevent it from putting private insurers out of business. I mean, these insurers are in the negotiations.

      It’s hard to really talk about much since so little of this is in tangible form. Things I hear one moment, may not actually be there the next.

      I’m still hoping we get out of this obstructionist mindset and start sitting down and talk about making things work.

      1. The problem with the ‘input’ the insurers are being given is that it’s all closed door stuff. Obama invites them to the White House, the doors get closed and two hours later they come out with this dazed look on their faces and he says, “We’re all in agreement on this point.” I really thinking he’s threatening the hell out of them and they are just hanging on for dear life.

      2. Really?

        I’m thinking the opposite. I’m thinking that there have been and will continue to be so many concessions and compromises, we’ll end up with an ineffective plan where insurance companies and hospitals make no real change or sacrifice will be required of anyone, and we’ll have a weak bill that can’t achieve what was wanted.

        Which later everyone will blame on Obama.

        I don’t think Obama has been that great at twisting arms so far.

        1. i have to agree, this bill has been horribly presented. if it passes, it will be a miracle and the fault lies in its presentation. and, it isn’t even finalized yet, so you’re correct, it seems to change with the jet stream.

          sadly, obama will get the blame, being the captain of the ship….nevermind the crew was derelict in their duty.

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