Neoliberalism: All the Taxes of Social Democracy, None of the Fun

Tom Geoghegan (in Were You Born on the Wrong Continent?) defends the advantages of the European model of social democracy against the American neoliberal model. No doubt the usual suspects on the Right feel compelled to defend the honor of the American cowboy capitalism that’s prevailed since 1980 or so, as a meaningful approximation to the “free markets” they’re always going on about.

Those of us on the free market Left, of course, will point out that what the talking heads at CNBC and the Wall Street Journal editorial page call the “free market” is anything but.

But Geoghegan does a pretty good job of advancing that argument himself. His remarks at several places in the book suggest that American neoliberal capitalism is not only statist, but that — measured even in terms of the sheer size and cost of government — it’s just as statist as German social democracy.

For example, Americans are taxed about four-fifths as much as western Europeans. So do we have a social safety net, or social amenities like public transit or single-payer healthcare, on four-fifths the scale the Germans enjoy them?

Geoghegan is also impolite enough to notice that what passes as “free market reform” in the United States doesn’t involve actually reducing government spending or intervention in the economy.  Nope — it just means taxing the public the same amount or more and then giving the money to crony capitalists. So instead of using tax money to fund a state-run prison system, you use it to pay Wackenhut on sweetheart terms which Wackenhut’s lobbyists had a big part in arranging.

Medicare and Medicaid actually pay more per capita for the half or so of total healthcare costs funded by the government than western European governments pay for the entire cost of a single-payer system. But it’s not “socialized medicine” as long as delivery of service is in the hands of a technically “private” corporation, even if the corporation’s still getting most of its money at the taxpayer teat.

Because that’s what “privatization” means, to the typical “free market” wonk at Heritage or AEI: Instead of taxing the public to organize a public service through government bureaucrats who operate as a legal monopoly, you tax the public and hire a private company to perform the service. A private company which — thanks to no-bid contracts and all sorts of legal protections — usually operates as a monopoly and has the same outrageous cost-maximizing incentives as a “defense” contractor or public utility. And the tax burden may well actually be greater, because rather than just paying a bunch of white collar civil servants with GS classifications, you’ve got to pay white collar corporate drones — plus the cowboy CEO’s salary and the shareholder dividends. Taxpayer-funded either way, but with “free market reform” you get two layers of parasites instead of just the one. Woo-hoo!

See, it’s only “socialism” if you give the money to poor folks. If you give the money to corporations, that’s “pro-business.” And “pro-business,” of course, means “free market.”

Look, I’m not a social democrat or a welfare statist. If you’re looking for someone to promote the German model in the U.S., it ain’t me. But if you call yourself a libertarian, don’t try to kid anybody that the American system is less statist than the German one just because more of the welfare queens wear three-piece suits. And don’t kid yourself that, given equal levels of statism, most Americans wouldn’t prefer the kind where they have guaranteed healthcare and six-week vacations. Come on, I would — after all, if we’re choosing between equal levels of statism, of course I’ll take the one that weighs less heavily on my own neck.

What I’d really rather have is less statism (i.e., none at all) and more freedom. But if you claim to be selling freedom, here’s a little marketing tip: Offer something that’s more attractive to the customer, not less. And a system where the state robs us to benefit the Fortune 500 instead of single moms and the unemployed really isn’t more attractive. Unless, of course, you’re one of the people running a Fortune 500 corporation. Good luck if you see that as the libertarian base.

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Citations to this article:

Free Markets & Capitalism?
Markets Not Capitalism
Organization Theory
Conscience of an Anarchist