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I recently returned from a trip to Denmark, which is probably the most socialist country in Europe. Danes pay very high taxes and receive generous welfare benefits in return. They acknowledge that there are trade-offs, but — in general — seem happy with the deal they have voted themselves over the years. No one there pretends that they are a center-right country, or a right-right country. It’s a socialist welfare state, and everyone knows it.
Here in the US, we all feel the increasingly heavy weight of the government boot on our necks, all the while pretending that we live in a center-right free market democracy. We are in 12th place in the Heritage Foundation’s 2014 Index of Economic Freedom, below Denmark, and rated only as “mostly free.” (Canada is #6.) Every indicator is moving in the direction of a tyranny incompetent to govern, but brilliant at demagoguery and coercion.
Since the late 19th Century, the United States has steadily progressed toward becoming a massive, highly centralized social welfare state. We became a deeply unfree country while lying to ourselves and each other about the process; so long as we continue that lie, we guarantee the most dysfunctional and least free and democratic outcome.
For over a century, our ruling elites attempted to usher in a social welfare state in America. Because ordinary Americans abhor socialism and reject the idea of the government owning the means of production, these elites instead embraced a form of corporatism. Society would be organized as a set of interest groups such as labor unions, educational institutions, foundations, and large businesses, and these would be yoked to the wagon of social good, guided, bribed, and coerced by elites into pulling together in a common direction.
We see the results now in the genesis and management of massive social enterprises like ObamaCare. When it turned out that large employers commanded an insufficient share of the labor market to provide universal health coverage — these benefits set to be managed by a complex regime of tax breaks and regulations — large health insurers were enticed by the promise of a coerced customer base and the preservation of an uncompetitive, fragmented market to become public utilities in service of a nationalized health system. It’s not socialized medicine, you see, it’s private industry! But “private” in this case has no meaning besides the ownership of stock; these companies are not free to pursue private interests according to their best judgment, but must provide the product the government says, in the way the government demands.
The hyper-regulatory state we live under is a direct result of the corpratists’ desire to eliminate the free choices of private entities in order to harness them as vehicles of state policies and preferences. However, corporatism turns out to be an incredibly inefficient way to deliver social goods. The system of bribes, incentives, penalties, and regulations is complex and inefficient, and constantly in danger of further distortion and corruption through regulatory capture. It is also economically inefficient: in this system, economic rents aren’t a bug, they are chief among the incentives that motivate corporate entities to serve the interests of the state.
Above all, corporatism hides the true cost of delivering social goods by burying them in the costs of goods and services delivered by servile, over-regulated businesses. Economically naive citizens are told that the benefits they vote for will be funded by taxes on the rich, without any mention of how that invariably means higher prices throughout the economy. When prices rise, they never blame regulation and coercion, only those greedy, “1%” capitalists who are — ironically — cogs in the vast, corporatist machine.
Wouldn’t frank socialism be preferable to all this dissimulation? Wouldn’t it be better to draw a straight line from a citizen’s taxes to the expenditures made on his behalf for a cradle-t0-grave welfare state? If we had that sort of system, Americans could actually see the money draining from their pockets when they vote for services, and decide if they were getting their money’s worth. Let government deliver social goods, and business make money providing goods and services with a minimum of regulation. If businesses are to work for the government, let them do so as contractors providing transparent fee-for-service work, not as hidden tax collectors and enforcers of political whims.
Americans won’t embrace liberty or libertarianism in our lifetimes. Perhaps they should instead embrace democratic socialism in its honest, open form like the Danes, and decide if it’s worth the costs. America would be freer as an honest socialist country than as the corrupt, inefficient, grim corporatist machine that it is today.