When Fascists Rant About Socialism — and the Quest for Compassionate Capitalism

Grand Lake Theatre, Oakland, California. Photo via Tom Steyer Twitter feed.

My Facebook feed has lately been filled with postings about the dangers of socialism, particularly from acquaintances based in Texas. With the House of Representatives flipping to a Democratic majority and some of the more liberal and progressive members of the House promoting socially progressive programs, it is clear that much of the rhetoric surrounding the 2020 elections will center on spreading disinformation designed to create fear-mongering about threats posed by socialism.

True socialism is bad, in the sense that we know with certainty that it disincentivizes the kind of innovation, economic growth and prosperity achieved in capitalistic economies. The question is… is socialism currently a real threat to our way of life in America? Or is the fear of socialism a canard that is being used as a way of diverting attention from a fascist and nationalistic agenda intended to destroy essential elements of our democracy?

Defining the “-ISMs”

To be sure we are on the same page as to what we are talking about, let’s start out by defining some basic terms (with much help from Wikipedia and other sources):

Capitalism is an economic and political system in which a country’s trade and industry are controlled by private owners for retaining profits, rather than by the state. Capitalism fosters efficiency through competition while also encouraging individuals and businesses to take economic risks in return for economic rewards. It is the most efficient system for creating economic wealth and growth that does not involve stealing it from others.

Socialism‘s main focus is on equality. Workers earn wages they can spend as they choose, while the government, not citizens, owns and operates the means for production. Workers receive what they need to produce and survive, but there’s no incentive to achieve more, leaving little motivation for innovation or taking risks.

Communism is similar to socialism, except that instead of the government owning everything, the working class owns everything, and everyone works toward the same communal goal. There are no wealthy or poor people — all are equal, and the community distributes what it produces based only on need. Communism, like socialism, frequently results in low production, mass poverty and limited advancement. In theory, a communist society is stateless, classless and governed directly by the people. This, however, has never been achieved. In practice, they have been totalitarian in nature, with a central party governing society.

Fascism is a form of radical authoritarian ultranationalism, characterized by dictatorial power, forcible suppression of opposition and strong regimentation of society and of the economy. Typically, one charismatic leader has absolute authority. Advisers to government are generally picked by loyalty rather than election or competency, and cronyism is common. There is a union between businesses and the State, with the state telling the business what to do, with nominally private ownership.

Such a state is led by a strong leader—such as a dictator and a martial government composed of the members of the governing fascist party—to forge national unity and maintain a stable and orderly society. Fascism rejects assertions that violence is automatically negative in nature and views political violence, war and imperialism as means that can achieve national rejuvenation. Fascists advocate a mixed economy, with the principal goal of achieving autarky (national economic self-sufficiency) through protectionist and interventionist economic policies.

Neo-fascism is a post–World War II ideology that includes significant elements of fascism. Neo-fascism usually includes ultranationalism, racial supremacy, populism, authoritarianism, nativism and opposition to immigration, as well as opposition to liberal democracy, parliamentarianism, Marxism, Communism and socialism.

Democracy is a system of government where the citizens exercise power by voting. In a direct democracy, the citizens as a whole form a governing body and vote directly on each issue. In a representative democracy the citizens elect representatives from among themselves. These representatives meet to form a governing body, such as a legislature. In a constitutional democracy the powers of the majority are exercised within the framework of a representative democracy, but the constitution limits the majority and protects the minority, usually through the enjoyment by all of certain individual rights, e.g. freedom of speech, or freedom of association.

An illiberal democracy is a governing system in which although elections take place, citizens are cut off from knowledge about the activities of those who exercise real power because of the lack of civil liberties. This may be because a constitution limiting government powers exists, but those in power ignore its liberties, or because an adequate legal constitutional framework of liberties does not exist.

Patriotism and Nationalism: This video from America Versus explains them very well:

How Capitalism can Degenerate into Socialism or Fascism

Despite its economic efficiency, capitalism itself presents significant challenges that, if not addressed, eventually lead to economic downfall and social collapse. Efficient production today might cause so much harm to society (by, for example, damaging the environment) that the lives of others might be adversely affected tomorrow (See: Unless It Changes, Capitalism Will Starve Humanity By 2050). So the government must play a role to protect those who might be adversely harmed by the actions of others, and to make sure that capitalists, in addition to reaping the economic benefits of their actions, also bear the economic costs of the harm that they might cause as a consequence of their actions. We often see many of those who gain greatly from our capitalistic economy spending large amounts of money and attempting to subvert our political system to try to avoid bearing such costs. Their behavior is meretricious.

Capitalism also tends to create a sharp divide between the wealthiest citizens and the poorest, with the wealthiest owning the majority of the nation’s resources. There is an ever widening gap between the have’s and the have not’s. Even though *average* economic wealth continually increases, capitalism nearly always causes this economic divide to get greater and greater, with a very small segment of very wealthy people enjoying virtually all the benefits of the capitalistic economy, while a steadily diminishing middle class is joined by a large segment of the population becoming increasingly impoverished.

If capitalism exists within a democracy, and actions are not taken to correct for the economic divide, the inevitable consequence is that the large majority of impoverished will use their votes to overthrow the wealthy, and in doing so, they will usually destroy the capitalistic system that enables economic prosperity. They will push towards socialism and/or anarchy, which will in turn push the society even further in the direction of low production and mass poverty.

The wealthy will not, of course, sit idly by and watch this happen. When they realize they don’t have the votes to sustain their ongoing way of life, they will often take action to destroy democracy by making it become illiberal and by supporting neo-fascism. They will continually push to weaken and corrupt the democratic process. Freedom of the press disappears, and  individuals who dissent from supporting the government suffer punishment and consequences. The government will strive to decouple the economic costs of capitalism from those who reap the economic benefits. The resulting neo-fascist state will attempt to corrupt the military, police, and judicial systems to maintain and strengthen the social and economic status of those holding power, rather than to provide liberty and justice for all. Donald Trump’s campaign and presidency was and is centered on this strategy (along with his putting the interests of Putin’s Russia ahead of America’s interests), and this is exactly what is happening in America right now, TODAY.

The neo-fascists will often recruit the gullible and ignorant to their agenda by decrying the evils of socialism, fostering fear and racism towards targeted hate groups, and by making false promises of restoring economic wealth to those who have lost (or who fear losing) what they once held. And indeed, we see each of these things happening in front our eyes on a daily basis right now.

Compassionate Capitalism

Socialism and fascism both destabilize capitalism and democracy. They both invariably lead to societal collapse. Creating stability requires supporting both democracy and capitalism, while taking steps to address and mitigate the economic divide that capitalism inevitably creates.

This is sometimes known as “compassionate capitalism” and is an extension of the concept of “noblesse oblige.” We often see it applied in practice by the Nordic countries (See: Sorry Bernie Bros But Nordic Countries Are Not Socialist). It operates under the idea that those who are most able to pay to support the social system that enables their success must also contribute the most to maintaining its stability, not just in absolute dollars but also as a percentage of income. In a healthy capitalistic economy, the wealthy do so not out of altruism, but because doing so is absolutely essential to maintaining the long term stability of the system from which they benefit most.

On the whole, the poor tend to not begrudge the wealthy for earning so much more as long as their own health and economic situation continues to improve as well, and as long as they also have the freedom to potentially innovate and prosper through the capitalistic process. When the wealthy recognize this and contribute enough to the tax base to support the basic needs of the populace, and when the society uses that tax base efficiently to create needed infrastructure that primarily benefits the disadvantaged, rather than providing benefits to the wealthy, then the capitalist economy stabilizes and everyone wins. But when the wealthy act out of greed to try to retain too much of their earnings and the plight of the poor continues to decline, or when the poor feel forced to act out of desperation to seize too much from the wealthy, a capitalistic democracy collapses. The other side of the coin is that if taxes are increased too much, or if the tax monies raised are used corruptly, then the economic incentives that fuel a capitalistic economy disappear, and productivity stifles.

Finding the right balance isn’t easy. But it is clear that present day America is a society significantly out of balance. The GOP tax cut of 2018 went in exactly the opposite direction of what would be healthy for America. It cut taxes severely for the most wealthy while increasing the overall financial burden for most of the poor and middle class, essentially robbing the poor to give money to the rich. At the same time, it also severely increased the national deficit in a truly alarming manner, exactly at a time in which America was economically prosperous and should have been able to make real strides in balancing the budget and perhaps even starting to pay down the ginormous national debt. Today America is an unstable country presently pursuing a course pushing strongly towards illiberal democracy, neo-fascism, and, eventually, financial and societal collapse.

So when I see people decrying socialism, on the one hand, I know socialism is bad. But I also know that socialism isn’t really what progressive members of our political system are advocating for at the moment. What they are asking for is compassionate capitalism, understanding that our political system is presently significantly out of balance and destabilizing, and recognizing that there is significant room for debate as to what measures are most appropriate for restoring balance.

Look, for example, at POTUS and those who support him trying to use fear-mongering to claim that liberals want to turn America into another Venezuela. The fact is, corruption and the abuse of emergency powers have been central themes used to advance the socialist political agenda in Venezuela, just as Trump is using corruption and the abuse of emergency powers to advance his fascist agenda in America. If anyone is pushing the US closer to the model of government used by Venezuela, it is Trump, not the liberals seeking to practice compassionate capitalism.

When I see people decrying socialism but never using their voice to speak out about the horrific daily acts being taken RIGHT NOW by Trump to move America towards illiberalism and neo-fascism (and, in fact, sometimes vocally supporting those acts), I see people who are the ultimate frauds and hypocrites, using fear-mongering about socialism to try to mask their support of the destruction of truth, justice and the American way.

Where Do We Go From Here?

These are interesting times. Extreme social and economic pressures potentially leading to neo-fascism and the fall of democracy are manifesting right now in actual practice rather than in theoretical arguments.  America stands at a cusp in its history, and we have enough information available to be self-aware of it. Democracy in America may fall to fascism, leading to a period of extreme darkness in terms of personal freedoms and human rights, very possibly followed by social unrest, societal collapse and environmental calamity. Or alternatively, America may react to the situation by embracing compassionate capitalism in a way it has failed to do in the past, leading to social and economic rejuvenation along with measures undertaken with real seriousness to address the financial and environmental challenges we are bequeathing to future generations.

I lived many years in Texas. Many of my friends there, some of whom served in America’s armed forces as patriots, now use their voices to rant about socialism while failing to speak out against (and sometimes even speaking out in support of) nationalism and fascism, acting in stark betrayal of the freedoms and democratic principles on which our country was founded, and which they once served to defend.

It is terribly saddening to watch it happen.

[Article revised March 1, 2019 to change the sentence “The resulting neo-fascist state will attempt to use military and police strength to maintain the social and economic status of those holding power” to read “The resulting neo-fascist state will attempt to corrupt the military, police, and judicial systems to maintain and strengthen the social and economic status of those holding power, rather than to provide liberty and justice for all. “]

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Cliff Kurtzman

Described as "pragmatically reckless with a high tolerance for ambiguity," Dr. Cliff Kurtzman is the founder of The Domino Principle. He is also an award winning entrepreneur, speaker, trend forecaster, and M.I.T.-trained rocket-scientist. Over the past 25 years, Cliff has launched several highly successful ventures by seeing technology trends in the world before they became widely realized, figuring out how they would impact our lives and then creating businesses that leveraged those trends ahead of many others. His bio is at http://www.kurtzman.biz.
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