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Sunday, May 8, 2011

Socialism Where You Might Least Expect It: Pruning Back a Partisan "Re-Definition"

On Fox News in the wake of the new law in 2010 that would expand health-insurance to the poor beginning in 2014, Brit Hume and Newt Gingrich (former Speaker of the U.S. House of Representatives) both (re)defined socialism as “government control of private property.” Their rendering falls short, however. According to the Random House Dictionary (via Dictionary.com), socialism is “a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole” (italics added). Whereas government regulation of privately-owned means of production and distribution involves some of the control being in the hands of the community as a whole through its government, socialism includes the vesting of both ownership and control (and not a portion thereof) in the community as a whole through its government.

By implication, government ownership without formal control does not constitute socialist enterprise. That ownership and control can indeed be separate in practice even if not formally is persuasively put forth by Bearle and Means in the classic treatise of 1932, The Modern Corporation and Private Property, which is on the separation in modern large corporations. Theoretically, a government could own a company that is controlled by its management. Alhough if this is as in managements usurping stockholders' control, the control would de facto rather than de jure (i.e., in practice rather than legally) and thus the enterprise in question would be considered socialist legally and privately-controlled in practice. Of course, if a government formally hands over control of an enterprise while retaining ownership, technically that enterprise would not be socialistic.

Therefore, the definition of socialism is more delimited than one might expect from all the chatter from the talking heads. Accordingly, the attempts made by the usual suspects to render the new regulations on health-insurance as somehow socialist must be considered to be specious. Otherwise, we shall have to admit that dictionaries are for naught and that anything goes linguistically. That would be the height of puffed-up arrogance and decadence. Because Gingrich holds a doctorate in history (equivalent to the J.S.D. in law and the D.Sci.M. in medicine), it is reasonable to conclude that he should have known better. A highly educated person intentionally distending the meaning of a word at the expense of clarity for political expediency evinces hypocrisy, if not duplicity. Sadly, the general public is apt to run with such “redefinitions” under the reasonable assumption that hosts and regular guests on news networks having a global audience have a competence deserved by the stature just from being a "celebrity" a major network.

To be sure, the meaning of words can change, but I contend that such shifts are gradual rather than artificially constructed for short-term political use. In the case of socialism, the term has historically applied to an entire system of social organization (political and economic elements folding into it in so far as the government, a political organization standing for a community as a whole, owns the means of economic production and distribution). 

With the fall of the U.S.S.R. and China’s allowance of private enterprise, socialism has manifested in governments owning and controlling particular enterprises rather than every means of production and distribution. For example, the Green Bay Packers’ football team is socialist because the city of Green Bay Wisconsin owns the team. So too is the China National Tobacco Corp. Lest it be objected that the latter is a monopoly whereas the Packers organization is not the only American professional football team, the NFL itself is a monopoly that has obtained an exemption from U.S. anti-trust law. Anyone who buys a ticket to an NFL game can readily feel the pinch of monopoly rents.

In short, socialism can be distinguished from government regulation of privately-owned economic enterprise. Furthermore, socialism can be applied to particular enterprises as well as in theory to an entire economy whose means of production and distribution are owned by the community as a whole (presumably through its government).  

Click to add a question or comment on socialism.

See related essay: Regulating Smoking in China