Rocky Vega

Dr. Ron Paul (R-TX) is a consistent critic of large government, as well as government intervention, and in a rather scholarly and nuanced sort of way. A prime example is his latest blog post, where he disputes the common complaint that President Obama is socialist and instead argues, more pointedly, that he’s in fact corporatist.

From Ron Paul’s Texas Straight Talk:

“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.”

Dr. Paul explains that referring to Obama as socialist is not only lacking in accuracy but, almost more importantly, it’s a less persuasive argument. Complaining about his socialist leanings weakens criticism of White House decisions that push in favor of increased government control over corporations, which he still finds worthy of reproach.

It’s an interesting concept and worth reading in its entirety in his Texas Straight Talk blog post on socialism versus corporatism.


Rocky Vega,
The Daily Reckoning

Rocky Vega

Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let?s Go Publications, Harvard Student Agencies, and The Harvard Advocate.

  • FRanco

    Excuse me but, ‘Corporatist’ is ‘fascist’ is it not? Is that not the description / definition of fascism.

    That’s the thing with Paul. If he’s on Rachel Maddow, he sounds like a lib. If he’s on Beck he sounds like a conservative.

    He won’t call Obama a fascist.

  • Goober Confedrate Jones

    Ron Paul has a huge advantage over 99% of Americans. He knows what a Socialist is. If you don’t trust Ron Paul, here is a brilliant idea. Ask a Socialist if Obama is a Socialist. To my knowledge no one has ever done that.

  • smithcreek

    It’s been clear since day one of the O’s administration his policy toward corporate America has been “get on board and I’ll assure your survival (along with sweet bonuses for top management), or I’ll crush you.” Then, that power is used for socialistic redistribution of wealth.

    Even if Obama was pure as the driven snow and had no plans to abuse the power he’s accumulating (I know, I know, just for sake of argument, go along with it), what happens when someone else takes the reins? In the same way Bush set the stage for an leftist ideologue like Obama, he could be setting the stage for something even worse.

  • Scott

    I respect Dr. Paul very much, but on this topic I think he’s elaborating a meaningless distinction; most corporations are socialist in their behavior and there is little point in arguing the difference between socialism and ‘corporatism’.

    The issue isn’t socialism vs. mercantilism, fascism or corporatism. The problem is one of collectivism vs. individualism and the extent to which a collective may exert its will and control over an individual before being held in violation of the individual’s rights as defined by the law of the land.

    When a corporation (the US Government for example, which actually *is* a corporation by the way) uses force to compel an individual to purchase health insurance it’s violating the 10th amendment to the US Constitution and is clearly breaking the law. The entities unfairly benefiting from that violation are the insurance companies that collect the monies taken from the public under duress and the US Government itself, which gains revenue at the expense of the individual citizen.

    Call this corporatism or fascism if you want. If necessary argue the fine points of definition. But be assured that you are effectively trying to count the number of angels that can dance on the head of a pin; you have lost focus on the true issue, which is the use of force by the government to benefit itself and its cronies at the expense of private citizens. It is a ‘taking’ under the law and it is a crime.

    I wish this were an isolated case and a rare behavior, but it is not. Our government has become tyrannical and this is only the most recent example of violations that are both increasing in magnitude and frequency not only in America but in the vast majority of sovereign jurisdictions all over the world.

  • sierra

    Obama is not a socialist. And, we do live in a “corporatist” state…….
    Corporatist is a state with “fascist” tendencies.
    Mark the role of the police which have been thoroughly “militarized” in the past three decades and the institution of “protest zones” that surround albeit far from major political events.
    We have two political parties that totally control our politics….yadda-yadda, and yooda-yooda.
    Most people who talk of “socialism” are absolutely clueless on what they’re talking about.
    Labor law has been shredded……consumers almost thrown to the dogs of wall street……
    Yes, we do live in a corporate state…..with “quasi-democratic” processes to periodically validate our “elected” leaders.

  • trilltexan

    FRanco, this is the difference between the two. fascism is a gov’t system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all.Corporatism is Political system in which power is exercised through large organizations (businesses, trade unions, etc) working in concert with each other, under the direction of the state. This is why you cannot call Obama a corporatist. As Ron Paul said it can easily be deflected by saying fascism is ruled by a dictator. This is not true under a corporatist. And we certainly don’t have a dictator….. Not yet anyway.

  • Jim McClarin

    Benito Mussolini said corporatism would be a better term than fascism for his ideology.

  • James Martin

    Ron Paul was warning about the housing crisis before the housing bubble burst.
    Ron Paul in testimony before the House Financial Services Committee on Sept 10 2003 warned of the destruction for the U.S. economy that Freddie and Fannie May would cause. He also warned about the Federal Reserve’s artificially cheap credit , pushing down interest rates by increasing the money supply (printing) would cause a boom and bust that would have terrible consequences on our economy.
    Former Federal Reserve chairman was actually encouraging borrowers to use Adjustable Rate Mortgages. In 2003 Greenspan told a Senate committee “, The notion of a bubble bursting and a whole price level coming down seems to me as far as a national phenomenon quite unlikely”
    The Ludwig von Mises Insitute which Ron Paul is part of explains how the Federal Reserve causes bubbles that burst that end up hurting people . A must read book that explains this is ‘Meltdown’ by Thomas Woods.
    Peter Schiff, a Ron Paul supporter was on several news stations in 2005 and 2006 warning that the housing market was a bubble that was about to burst. Many other economists like Art Laffer, Gary Norman, Ben Stien and others were saying he was wrong, some were laughing at him. Peter Schiff was right.

    Watch You Tube videos: Peter Schiff was Right , Ron Paul vs Ben Bernanke, Peter Schiff was right Ben Bernanke was wrong.

  • rfaramir

    These are not meaningless distinctions, though to the public at large, they may be. Four years ago, I had no clear idea of what fascist meant.

    Socialism: the state owns the means of production.
    Fascism: the state controls the means of production.
    Corporatism: the owners of the means of production control the state.

    “Big Business” does have a lot of influence on our government, but it is largely due to a defense against fascist tendencies of the progressives. Industries find that they have to band together to defeat aggressive legislation that would take their property. Afterwards, they find they have a method of influence on the state (a lobby), and keep it around. But they are certainly not the only ones with effective lobbies.

    Fascism is “soft socialism”. And it is NOT very soft. It is bossing corporations around (effectively controlling the means of production), and leads directly to socialism whenever the capitalists try to stand up to the state: it resorts to directly taking over that firm or industry. Obama is the most fascist president we’ve had since FDR.

    We’ve got some of all three in this country. The fascism is obvious (now that we know what it means). The socialism is partially present and alarmingly increasing. The corporatism is modestly present, but not a dominant influence.

    Obama is a fascist socialist. Obamacare is fascist corporatist and will lead to socialism. I’d bet that the corporatist elements came from bought members of Congress, not Obama.

  • GrtflMark

    This is, whithout a doubt, the most incoherent, durg-addled, lunatic ravings that I have EVER heard from ANYONE purporting to be knowledgable on affairs of state>

    A “corporatist”? What in the name of all that’s holy does that MEAN? Let me help you: It means NOTHING!!

  • Just A Voter

    There is an Urban Dictionary definition calling corporatist as part of an S&M act.

    Maybe this is something RP DOES know about.

  • sbark

    In a comment above…Corpt’ism: the owners of the means of production control the state”..

    hmmmm…….would not then the Chrysler Bond owners, the true 1st Lein position have not had to eat their position, when Obama gave GM & Chryslr to the Unions?

  • Peter Verkooijen

    Corporatism is how socialism works out in reality. Mussolini was a socialist, editor-in-chief of the Italian socialist party newspaper. His corporatism/fascism was a way to implement socialism in “national unity”, without the mess that was going on in Germany and the young Soviet Union at that time, the early 1920s. Corporatism is a way to implement a government-planned economy through companies that stay in private hands on paper, but are ultimately run by bureaucrats and unions. Barack Obama is an old-fashioned, hardline, doctrinaire marxist-leninist, not a soft cliche socialist. He knows exactly what he is doing and has been very deliberately working towards his goals since the beginning. Wake up people!

  • Pod

    Corporate/State socialism is FASCISM. Obama’s version of fascism is “smiley faced facism”, coined by jonah goldberg.

    Obama is a fascist and a socialist; take your pick.

    Ron Paul lacks the guts to call Obama what he is

  • owling

    Our present situation is much like the late 1800’s when progressives took on the monopolies. The tendency of corporatism – or manipulation of government by use of corporate wealth, for instance, with over 60,000 lobbyists in Washington as our hidden lesgislators – is to wipe out competition from smaller businesses or swallow them up and to buy government through favors so that lawmakers are hamstrung, as Obama presently is. The monopolists today are a little different from the ones Teddy Roosevelt fought. They are gamblers financed by taxpayers and their own scams. Fancy derivatives are nothing more than phony financial instruments, and there are more being traded than the entire global GDP: more than half of the world economy is fantasy. The result is that now we have government by the “corporate person” instead of the “people.” Reps can’t function without injections of corporate cash to survive. To get even weirder, the corporate takeover of government is really a global enterprise. Good luck, little people, we’re in an Animal Farm process with the pigs extracting our money in the biggest wealth transfer of history. And, in the long run, what will they have when the dust settles? Probably a revolution.

  • turnipweed

    “Corporatist”? Is that a nice way to say “Fascist”?

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