Bailout itself is a form of socialism

The word “socialism” has appeared frequently on the Coloradoan’s opinion page over the past several months.  Bryan Carpenter recently expressed the view that socialist policies put society onto “an ever-descending path into mediocre, weak mush.”  Curiously, he focused on the tattered “safety net” for the poor, not the socialism primarily for the rich embodied in the $850 billion bailout package approved by Congress in early October.

Socialism is typically defined as a social system in which the production and distribution of goods and services are managed democratically.  All actually existing capitalist societies, even ours, feature some socialist aspects.  Examples of these socialist aspects include public education, municipal fire and police services, Medicare, and laws protecting human health and the environment.

The reason capitalist societies include these socialist aspects is that they would fall apart without them.  As Karl Polanyi wrote in 1944, “To allow the market mechanism to be sole director of the fate of human beings and their natural environment… would result in the demolition of society.”

Capitalism produces extraordinary crises on a regular basis.  When those crises affect the wealthy or the functioning of the capitalist system as a whole, they are addressed using socialist or semi-socialist measures.  Crises that merely affect the well-being of the non-wealthy or the environment do not command the dramatic response we saw in early October.  The most significant benefit of the financial bailout package may be to encourage the non-wealthy to support socialist responses to the many other extraordinary crises we face.

Originally appeared in the Ft. Collins Coloradoan on October 22nd, 2008