While I certainly don't think it's unfair to call President Obama a socialist, the truth of the matter is, he isn't one.

So if Obama isn't a socialist, then why is it fair to call him one?

Because "socialism" as devolved into a catch-all phrase for Big Government, and he champions socialistic policy ... wants to "spread the wealth around," commandeered the health care industry, intends to increase the powers of the Federal Reserve, and so on ... You can read a more detailed analysis of this in Jonah Goldberg's "What Kind of Socialist Is Barack Obama?"

What is Barack Obama then, if not a socialist?

He's the same thing that Bush was before him, Clinton before him, Bush Sr. before him, etc... Barack Obama is a corporatist.

What is a corporatism?

Believe it or not, during the 1930's fascism was in style. It's true! Glenn Beck has done a good job of educating the public about America's flirtations with fascism. Please see his video series: "Communism or Fascism?"

Thomas J. DiLorenzo's "Economic Fascism" is an outstanding paper detailing the influence of fascism on America. As required reading during my final semester of college, I still can't recommend it enough. Every American should take the time to read it. At least twice!

Economic Fascism

When people hear the word “fascism” they naturally think of its ugly racism and anti-Semitism as practiced by the totalitarian regimes of Mussolini and Hitler. But there was also an economic policy component of fascism, known in Europe during the 1920s and ’30s as “corporatism,” that was an essential ingredient of economic totalitarianism as practiced by Mussolini and Hitler. So-called corporatism was adopted in Italy and Germany during the 1930s and was held up as a “model” by quite a few intellectuals and policy makers in the United States and Europe ... In the United States these policies were not called “fascism” but “planned capitalism.” The word fascism may no longer be politically acceptable, but its synonym “industrial policy” is as popular as ever.

Few Americans are aware of or can recall how so many Americans and Europeans viewed economic fascism as the wave of the future during the 1930s. The American Ambassador to Italy, Richard Washburn Child, was so impressed with “corporatism” that he wrote in the preface to Mussolini’s 1928 autobiography that “it may be shrewdly forecast that no man will exhibit dimensions of permanent greatness equal to Mussolini. . . . The Duce is now the greatest figure of this sphere and time.”

Certain British intellectuals were perhaps the most smitten of anyone by fascism. George Bernard Shaw announced in 1927 that his fellow “socialists should be delighted to find at last a socialist [Mussolini] who speaks and thinks as responsible rulers do.” ... the American author Ezra Pound declared that Mussolini was “continuing the task of Thomas Jefferson.”

Thus, it is important to recognize that, as an economic system, fascism was widely accepted in the 1920s and ’30s. The evil deeds of individual fascists were later condemned, but the practice of economic fascism never was. To this day, the historically uninformed continue to repeat the hoary slogan that, despite all his faults, Mussolini at least “made the trains run on time,” insinuating that his interventionist industrial policies were a success.

In short, corporatism is a system in which Big Business and Big Government work hand-in-hand. Like the bailouts of the banks and auto industry for example, businesses remains more or less "private" with the government in control.

The result of the corporatist system, is the collusion between government and its preferred businesses, and the socialization of private losses (the "too big to fail" theory).

Rep. Ron Paul (R-TX) does a great job explaining corporatism in his latest column below.

Socialism vs Corporatism

Lately many have characterized this administration as socialist, or having strong socialist leanings. I differ with this characterization. This is not to say Mr. Obama believes in free-markets by any means. On the contrary, he has done and said much that demonstrates his fundamental misunderstanding and hostility towards the truly free market. But a closer, honest examination of his policies and actions in office reveals that, much like the previous administration, he is very much a corporatist. This in many ways can be more insidious and worse than being an outright socialist.

Socialism is a system where the government directly owns and manages businesses. Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government. In a corporatist state, government officials often act in collusion with their favored business interests to design polices that give those interests a monopoly position, to the detriment of both competitors and consumers.

A careful examination of the policies pursued by the Obama administration and his allies in Congress shows that their agenda is corporatist. For example, the health care bill that recently passed does not establish a Canadian-style government-run single payer health care system. Instead, it relies on mandates forcing every American to purchase private health insurance or pay a fine. It also includes subsidies for low-income Americans and government-run health care “exchanges”. Contrary to the claims of the proponents of the health care bill, large insurance and pharmaceutical companies were enthusiastic supporters of many provisions of this legislation because they knew in the end their bottom lines would be enriched by Obamacare.

Similarly, Obama's “cap-and-trade” legislation provides subsidies and specials privileges to large businesses that engage in “carbon trading.” This is why large corporations, such as General Electric support cap-and-trade.

To call the President a corporatist is not to soft-pedal criticism of his administration. It is merely a more accurate description of the President’s agenda.

When he is a called a socialist, the President and his defenders can easily deflect that charge by pointing out that the historical meaning of socialism is government ownership of industry; under the President’s policies, industry remains in nominally private hands. Using the more accurate term – corporatism - forces the President to defend his policies that increase government control of private industries and expand de facto subsidies to big businesses. This also promotes the understanding that though the current system may not be pure socialism, neither is it free-market since government controls the private sector through taxes, regulations, and subsidies, and has done so for decades.

Using precise terms can prevent future statists from successfully blaming the inevitable failure of their programs on the remnants of the free market that are still allowed to exist. We must not allow the disastrous results of corporatism to be ascribed incorrectly to free market capitalism or used as a justification for more government expansion. Most importantly, we must learn what freedom really is and educate others on how infringements on our economic liberties caused our economic woes in the first place. Government is the problem; it cannot be the solution.

Please visit Ron Paul's archives, he's the only guy in Washington with a thorough understanding of economics.

If you'd like to learn more about corporatism, please read: There’s Nothing Free About Corporatism.

  • http://www.thats-right.com Russ

    Ok. I can buy that. Corporatist it is.

  • http://conservativehideout.com/wordpress/ Matt

    Well said CL.

  • http://www.amazon.com/dp/B003S3S4CC Stephanie Herman

    Could not agree more - in my book, 'Obama's Not a Socialist,' I'm trying to get across to a younger audience that capitalism - laissez-faire - by definition, prevents corporatism. If the GOP would stop mislabeling Obama as a socialist and called him what he is - a corporatist - they could gain a large percentage of moderate Democrats in 2012. They don't mind Obama as a socialist - they'd be outraged to understand Obama as a corporatist.

    • Kohouted

      So, then, the Rightie labeling of Obama as "socialist" is to pull the wool over the eyes of their own constituency? Do you Righties really like being lied to that much? The answer must be a resounding "YES."

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  • eep

    George Bernard Shaw is mentioned. I have been wondering about the relationship between Fabian Socialism and Corporatism. I've read that George Orwell was very critical of this group (1984 was supposed to be based on them). If what I read is correct and Fabian Socialism is the "third way" then US Presidents have been a brand of socialist: Corporate Socialism?

  • sal magundi

    "Socialism is a system where the government directly owns and manages businesses."

    this is of course wrong. nationalization does not equal socialization. state-capitalist forms are not socialist forms. it would be nice to point to socialized forms, but it's hard to as the state, both for itself and as proxy for business interests, doesn't like to cede its power and tends to move in and murder the people attempting it.