An Early Lesson in Government Theory

February 8, 2019

If I was truly intent on convincingly demonstrate how politically dumb Americans are I couldn’t use the election of Donald Trump as proof.  The majority of Americans voted for someone else.

I might get closer if I test them on their understanding of socialism.   For some reason, with most Americans,  socialism ranks with “evil,” “wicked,” or “disaster,” or “failure,” as a descriptor of something really bad.   For example, Bob Salera, a spokesman for the National Republican Congressional Committee, added “ridiculous” when describing the newly proposed “Green New Deal” introduced by that charming and lovely devil incarnate Alexandria Ocasio-Cortez and that “liberal” (another word misused as a pejorative) Senator Edward Markey.   I think Salera, like most Americans when it comes to socialism, don’t know what they’re talking about when they call something “socialism.”   Either that or he is simply playing to the crowd.

I credit my attitude to my father and my Political Science Instructor at Texas Tech in my sophomore year.  (Being a sophomore will explain some things.  It’s a combination of two Greek words meaning “wise fool.”  Additionally, and irrelevantly, I find the first three descriptors of college progression most apt: Freshman, is obvious; Sophomore entirely fitting; Junior as always meaning “lessor.”  They make sense.  “Senior” is, however, most misleading.  The average age of a college graduate is somewhere between 22 and 28 today.  Hardly old enough to be thought of as “Senior.”  A much more appropriate designation would be “Comencier,”  because they have a lot to learn about the real world, as when someone from the real world tells them they have the world by the tail on a downhill drag at Commencement and it really isn’t.)

At age 15 or so, when I was what Alexander Pope called “dangerous,” I sounded off at the dinner table about the Rural Electrification Program (REA) being “socialist” because it was a government program.  My Dad, who was among the first REA employees, put his fork down, said, “Shut up, Jimmy, you don’t know what you’re talking about.”   He then went on to explain about cooperatives and low-interest loans, and so on and so forth.  At about age 18, my youthful assistant professor of Political Science outlined the difference between socialism and capitalism and used the Federal Housing Administration program as an example.  As memory permits, this is what he had to say, starting with a question:

“Since this is an elective course, I assume you are interested in government and how it works.  Am I right?”   There was a chorus of nods.

“Well, then, you are going to hear Federal programs or proposals called ‘socialism.’  That would be wrong.  Nothing could be further from the truth, and you are going to become frustrated when you can’t convince people why they aren’t.  For example, we still hear the FHA home ownership program called socialism.”  (Memories of my Dad’s retort about REA came flooding back.)  (At one point not so long go, 95% of the mortgages made in America were being sold to Fannie Mae or Freddie Mac, two government-sponsored enterprises that generates funds to make more mortgages.)

The professor went on.  “Every program either enacted or proposed by the Federal government is expected to have some sort of return on taxpayer investment in our capitalist form of government.  The FHA program was enacted because it was supported by homebuilders and was intended to stimulate the housing industry in a time of national emergency.  A low-cost guaranteed loan to homebuyers was the mechanism the government used to support capitalism.”   With the passage of time, the term “entitlement” enters our national dialogue.   These entitlements, when approved by a democratic representative form of government reflecting he popular will, are paid for by taxpayers working in a capitalist environment, not from revenues generated by government-owned enterprises.   The power resides at the ballot box, not at the highest levels of a tyrannical government.   Take, for another example, Medicare.   As Paul Krugman reminds us, and as I am old enough to remember, in 1961, the American Medical Association called what became Medicare “socialized medicine.”   Today, it is one of the most popular Federal programs and was the major issue of the 2018 midterm elections because it was perceived to be threatened.   “Socialized medicine” or not, I still pay for some of what I get in a reduction on another “entitlement” I get, called social security.   “Socialism” or not, it would appear that what Americans think of as “evil, etc.” accounts for things they value.

Moments later on that long ago day, the lecture closure came:  “No one in his right mind in this country would ever propose or expect to be enacted any law that would even come close to the government owning and operating all business and industry that exist to make a profit, because that’s where the taxes come from that enable us to have a military, operate National Parks at a deficit, and pay for the R & D that supports our private health care system…” and so on.  What was true in 1955, when I was a Freshman, is true today.  What Ocasio-Cortez and Markey are proposing may be ambitious, but it is really pretty conventional in its approach and more importantly, is consistent with past practice in governance.

That semester in that political science course taught me that capitalism works, even when it adopts “socialistic” practices.  Today, in our society, “socialism” exists mainly and perhaps exclusively as a way to make up for the failures of capitalism when government must be the “provider of last resort” because there is no (immediate) way to make a profit on required services.  (I could add here that the railroads were the recipient of government assistance when they acquired the necessary right of way to build and lots of land on either side of the tracks out west.)  Like with Climate Change, until we can gear up alternatives to the over-protected capitalist way of exploiting our natural resources for profit, which, in turn, admittedly helps provide the funds to make the transition, there will be some level of government support.   It gets very complicated.   But, then, no one said it would be easy.  However, for starters, could we find a more honest way to describe what we really do to keep capitalism healthy?





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