Robert Higgs of the Independent Institute wrote a blog post titled, “Once More, with Feeling: Our System Is Not Socialism, but Participatory Fascism“. This may be the most perceptive analysis of the modern social-democratic, welfare, regulatory state that I have read. Higgs captures the essence of the modern face of fascism, noting subtleties and nuances that frequently escape notice.
Higgs defends the use of his term “participatory fascism”, noting that it is “a descriptively precise term in that it recognizes the fascistic organization of resource ownership and control in our system, despite the preservation of nominal private ownership, and the variety of ways in which the state employs political ceremonies, proceedings, and engagements—most important, voting—in which the general public participates. Such participation engenders the sense that somehow the people control the government. Even though this sense of control is for the most part an illusion, rather than a perception well founded in reality, it is important because it causes people to accept government regulations, taxes, and other insults against which they might rebel if they believed that such impositions had simply been forced on them by dictators or other leaders wholly beyond their influence.”
He then points out two reasons why “participatory fascism” has been more readily adopted and accepted than socialism.
- ‘… it allows the nominal private owners of resources and firms enough room for maneuver that they can still innovate, prosper, and hence propel the system toward higher levels of living for the masses. If the government’s intervention is pushed too far, this progress slows, and it may eventually cease or even turn into economic regress. However, when such untoward conditions occur, the rulers tend to rein in their plunder and intervention enough to allow a revitalization of the economy. Of course, such fettered economies cannot grow as fast as completely free economies can grow, but the latter system would preclude the plunder and control that the political leaders now enjoy in the fettered system, and hence they greatly prefer the slower-growing, great-plunder system to the faster-growing, no-plunder one.‘
- ‘… when serious economic problems do arise, as they have during the past five years, the rulers and their key supporters in the “private” sector can blame residual elements of the market system, and especially the richest people who operate in that system, for the perceived ills. No matter how much the problems arise from government intervention, it is always possible to lay the blame on actors and institutions in the remaining “free enterprises,” especially the biggest bankers and other apparent top dogs. Thus, fascistic rulers have build-in protection against popular reaction that the rulers in a socialist system lack.‘
This is absolutely brilliant, as it explains so much of why the world appears as it does. For instance, it is now clear why almost every nation in the world has abandoned outright socialism. It also explains why Hong Kong and Singapore, despite various economic interventions by their respective governments, are the paragons of economic freedom in the world today. It also explains why there will be no mass revolts in first world nations due to the current depression. Governments will reform enough to escape falling into the abyss, but will never liberalize to even the point of modern day Hong Kong and Singapore.