The idea of central planning as the underpinning of an economic system, whether labeled “Socialist”, “Communist”, or “Fascist” is repugnant to those who support free markets, or what might be broadly referred to as “Capitalism”.
There is however an equally repugnant but more insidious system that has materialized without many open advocates or a genuine philosophical underpinning. For lack of a precise term, it might be known as “corporatism” or “crony capitalism”, mixed in with a few tablespoons of genuine fascism. Basically, this is the economic and political system that reigns supreme in the contemporary United States of America. This system is abhorrent to free market principles and its economic effects are disastrous to the vast majority of citizens. In addition, it makes a mockery of the rule of law and destroys individual liberty, initiative, and the entrepreneurial spirit. Perhaps even more diabolical however is the fact that this system persists while masquerading as genuine “capitalism” and a system of “free markets”.
Our entire education system (up to and including elite post-secondary and graduate schools) along with the big-named economists, pundits and mainstream media talking heads persistently emphasize the idea that the United States is a society based on capitalism and the concept of free markets. During our 200+ year history, there have been periods where the description was generally accurate. In the current economic environment, the bones of the free market have been picked clean by the corporatist vultures and only the pale ghost of capitalism remains. Yet, the so-called mainstream thinkers are remarkably successful in maintaining the illusion and allowing the widespread damage and economic injustices of rampant statism and central planning to be blamed on free market capitalism.
Under this guise, the so-called “financial crisis” of 2007 and 2008 led many to suggest that we were witnessing the great failure of free markets and the culmination of the Marxist prophecies predicting capitalism’s demise. Beyond the smoke and mirrors however, we were seeing the bright beacon of the free market’s potential and the bloody fingerprints of central planning on a grievously wounded economy. An edifice based on decades of interest rate manipulation (repugnant to the principles of a free market) combined with statist interference in the mortgage industry (a-la Fannie, Freddie, FHA, etc.) and a culture of widespread federally sanctioned fraud stood poised to come crashing down with a delicate wave of the invisible hand. Even after this prolonged period of rule bending and statist intervention, the force of the free market was being felt. The perpetrators of fraud and those whose greed had led them to massive mal-investment were about to be punished. The culprits at the Federal Reserve and the central planners in government were on the verge of having their meddling and mis-allocation of resources explode in their faces. Only a massive and unprecedented onslaught of government support and an insane money-printing spree were able to sustain the system. Temporarily.
Fraud is generally repugnant to any society or economic system, and especially so to the advocates of a free market. Though they cause temporary distortions, frauds and swindles are ultimately expunged by the fundamental nature of the free market. Thanks to massive statist intervention and active government participation in the perpetration, legitimization and obfuscation of fraud, this warped system of U.S.-style corporatism has been remarkably persistent. Monumental interventionism has granted the system a temporary stay of execution, and the spectre of the free market has been momentarily banished. Yet another layer has been added to the economic house of cards. Financial institutions remain bankrupt by any fair or accurate accounting standards. The Federal Reserve is single-minded in its focus to suck every last drop of blood from the productive economy to keep the parasites alive. Commodity prices increase in the presence of stagnant wages causing pain to the lowest income earners. Value-adding producers in the real economy see their operating margins compressed to oblivion as their input costs rise with zero ability to pass on price increases to the wealth-stripped customer. Massive government deficit spending (now accounting for nearly 10% of GDP), is necessary just to keep up the slightest fiction of economic recovery, and an incessant string of spurious (later revised) government statistics is seized upon by the mainstream media propaganda machine as evidence of progress.
Economic prognostication in this environment of statism and interventionism is a fool’s errand, but it is likewise foolish to suggest that any of the major economic trends are moving in a direction likely to yield improvement for the average U.S. citizen. The free market WILL ultimately prevail. Whether it triumphs by a sudden “return to sanity” in the current environment, gradually works through a period of prolonged economic misery, or arises from the ashes of a general societal meltdown is the only question. Regardless of how the end game plays out however, those who would champion liberty, sound monetary policy and free markets have a MISSION! It is our imperative to expose the doppleganger of corporatism and shatter the illusion that the economic malaise of the 21st century United States of America is due to shortcomings of the free market or capitalism. Whether we fix the problem now, or in years hence are left only to fix the blame, the economic misery of millions must be inextricably linked to the corrupt corporatist system and the miserable failure of central planning.