In Ludwig von Mises’ Interventionism: An Economic Analysis, he issues an impressive critique of the “third option” of economic systems (not to be confused with the Catholic Conservative’s “third way,” known as Distributism –there are many who think that they have found a “third way,” an alternative to Capitalism and Socialism). This third form that Mises dissects is known as “Interventionism.” Intervention is summarized in the words of Ludwig von Mises as “a system of private ownership of the means of production in which the government intervenes, by orders and prohibitions, in the exercise of ownership.” Mises takes the book to analyze interventionism and reveal its various problems and ultimate result.
But first he defines Capitalism and Socialism so as to better show what the so-called third way is aiming to be separate from. In his definition of socialism, Mises makes a very important distinction between two types of socialism. These two types of socialism are hardly understood today. This makes for a very ignorant and confused citizenry. For instance, when most people see a company that is not owned by the government, but rather owned by private individuals, they assume that this is an example of capitalistic presence in the economy. But this is not necessarily true. For it is possible, under one type of socialism, to have these mega-corporations, owned and operated by individuals in the private sector.
Mises, writing this in 1940, shows that socialism can be “realized according to two different patterns” which are 1) “the Marxian or Russian pattern” and 2) “the German system.” Today, these can be distinguished by other terms. We can call the first one “Marxism” or Communism. The second pattern can be referred to as Fascism or Corporatism. Some call the second one “State-capitalism,” but in my opinion, this only confuses things. And economically, if we take the Austrian approach to economics, we realize that this latter pattern actually has the effect of destroying capital and encouraging immediate consumption. Thus, it should, just like the first pattern, be considered a form of anti-capitalism.
It is important to recognize that these are two differing styles under the one umbrella of socialism. That is to say, fascism and communism are both forms of socialism. Often, we will hear the Republicans calling out the Democrats for their “socialist” measures and efforts. But once we realize that there are more than one type of socialism, we realize that the GOP is equally guilty of socialism. The GOP establishment not only supports unending military cronyism, monopoly central banking, farm and agriculture subsidies, but their solutions that they parade about as being “free-market” approaches are really nothing more than the second type of socialism. They advocate for “privatizing” the TSA, social security, and the school system. But this privatization is not an effort toward free markets, only private ownership of government mandated programs. In form, even if not to the same extremes of German Nazism, the GOP is fascistic.
The Republicans pretend they are capitalistic, but they are not.
But are the Republicans right in calling Obama the “marxist-in-chief?” It is true that the talking points taken up by Obama and his party are more Marxist in flavor, rather than the nationalism of the GOP. But in practice, is the Democratic Party communistic? I don’t think so. Interestingly, they also are fascistic, socialistic in the second sense of the word. Think about the infamous bailout of the auto industry. Marxists don’t do things like that. Think about the so-called Obamacare. It is most certainly not a single-payer system, which would be more communistic. Instead, it is a massive subsidy to the corporate insurance-medical complex. It is fascist in nature. From green enterprise subsidies to banking industry support, Obama has presided over a remarkably crony corporatism. The Republicans have different special interest groups and talking points, but the sense in which both parties are the same is that they have adopted more of a “German system.”
The Democrats pretend they are communistic, but they are not.
The Republican voting base is made up of individuals who are more prone to be attracted to the rhetoric of capitalism. The Democrat voting base is made up of individuals who are more prone to be attracted to the rhetoric of Marxism. Thus, they both speak to their constituents while pushing a fascist order.
Now, neither party is blunt about the desire to adopt this system. It is not revolutionary, because it is not popular. The establishment in DC does things slowly, one step at a time. Fascinatingly, the means toward their fascist goals is Interventionism. Mises, in his critique of Interventionism, shows how, eventually, it would inevitably lead to socialism. The story of the United States’ economic destruction is centered around compromise. One intervention, which leads to economic problems, which in turn seems to require more intervention, which leads to more problems. The solution by the Federal Government is rarely a hands-off approach. Governments like to actively fix things, to look busy. In this way, the interventionism of a hundred years ago has led, step by step, to our current calamity.
Interventionism tends toward socialism. What kind? That depends on the conglomeration of special interests, political decisions, and culture. In the United States, Interventionism has wrought a socialism of the German pattern. This is true economically. Culturally, we have proceeded in a more Marxist “melting pot” pattern. It is an odd historical happenstance. One wonders how this unique mix is going to all end up.
Certainly not in any place good.