Fascism and the Future of America

Many commentators, including me, have said that our government is either fascistic or well on its way to being fascistic. What I mean when I refer to fascism in America — and what most commentators mean — is this:

[A] system in which the government leaves nominal ownership of the means of production in the hands of private individuals but exercises control by means of regulatory legislation and reaps most of the profit by means of heavy taxation. In effect, fascism is simply a more subtle form of government ownership than is socialism.

The central point is the scope of government power, which in recent months has gone from big to bigger, with the threat of becoming biggest.

Whether the United States has, at last, descended into full-blown fascism (as defined above) is less important a question than whether and how we might ascend to a better place. I will visit the possible future after assessing our present condition and its causes.

FASCISM OR SOFT DESPOTISM?

Soft despotism is simply a more polite term than fascism (or socialism) for pervasive government control of our affairs:

Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by “a network of small complicated rules” might degrade. Soft despotism is different from despotism (also called ‘hard despotism’) in the sense that it is not obvious to the people. Soft despotism gives people the illusion that they are in control, when in fact they have very little influence over their government. (Source: Wikipedia.)

Soft despotism is “soft” only in that citizens aren’t dragged from their houses at night and executed for imaginary crimes against the state — though they are hauled into court for not wearing seatbelts, for smoking in bars, and for various other niggling offenses to the sensibilities of nanny-staters.

Despite the absence of arbitrary physical punishment, soft despotism is despotism, period. It can be nothing but despotism when the state holds sway over your paycheck, your retirement plan, your medical care, your choice of associates, and thousands of other details of your life — from the drugs you may not buy to the kind of car you can’t drive, from where you can build a house to the features that your house must include.

“Soft despotism,” in other words, is too soft a term for the regime under which we live. I therefore agree with Tom Smith: “Fascism” is a good descriptor of our present condition, so I’ll continue to use it.

THE CAUSES OF OUR PRESENT CONDITION

In spite of my preference for “fascism” to describe our present system of governance, I do concede an advantage to Tocqueville’s usage: It suggests the mechanism by which we got to where we are, that is, “overrun by ‘a network of small complicated rules’.” (Well, the rules aren’t small, but we are overrun by a network of them.) By “we” I don’t mean to imply concerted action on the part of the whole populace. There is a more insidious mechanism at work, which I call the interest-group paradox:

Pork-barrel legislation exemplifies the interest-group paradox in action, though the paradox encompasses much more than pork-barrel legislation. There are myriad government programs that — like pork-barrel projects — are intended to favor particular classes of individuals. Here is a minute sample:

  • Social Security, Medicare, and Medicaid, for the benefit of the elderly (including the indigent elderly)
  • Tax credits and deductions, for the benefit of low-income families, charitable and other non-profit institutions, and home buyers (with mortgages)
  • Progressive income-tax rates, for the benefit of persons in the mid-to-low income brackets
  • Subsidies for various kinds of “essential” or “distressed” industries, such as agriculture and automobile manufacturing
  • Import quotas, tariffs, and other restrictions on trade, for the benefit of particular industries and/or labor unions
  • Pro-union laws (in many States), for the benefit of unions and unionized workers
  • Non-smoking ordinances, for the benefit of bar and restaurant employees and non-smoking patrons….

You may believe that a particular program is worth what it costs — given that you probably have little idea of its direct costs and no idea of its indirect costs. The problem is that millions of your fellow Americans believe the same thing about each of their favorite programs….

It is the interest-group paradox which has brought us to our present condition. Since the advent of American fascism in the New Deal, both of the major parties have vied for votes by promising more things to more interest groups. Many interest groups have been mollified, if not satisfied, but most of their members — not to mention the vast, silent minority of unrepresented voters — have in fact been made worse off because the price of their mollification is the mollification of other interest groups.

Thus we have become freighted with massive tax and regulatory burdens. The cumulative effect of the twin burdens is astoundingly large, and is likely to grow under the present regime:

Had the economy of the U.S. not been deflected from its post-Civil War course [by the advent of the regulatory-welfare state around 1900], GDP would now be more than three times its present level…. If that seems unbelievable to you, it shouldn’t: $100 compounded for 100 years at 4.4 percent amounts to $7,400; $100 compounded for 100 years at 3.1 percent amounts to $2,100. Nothing other than government intervention (or a catastrophe greater than any we have known) could have kept the economy from growing at more than 4 percent.

What’s next? Unless Obama’s megalomaniac plans are aborted by a reversal of the Republican Party’s fortunes, the U.S. will enter a new phase of economic growth — something close to stagnation. We will look back on the period from 1970 to 2008 [when GDP rose at an annual rate of 3.1 percent] with longing, as we plod along at a growth rate similar to that of 1908-1940, that is, about 2.2 percent. Thus:

  • If GDP grows at 2.2 percent through 2108, it will be 58 percent lower than if we plod on at 3.1 percent.
  • If GDP grows at 2.2 percent for through 2108, it will be only 4 percent of what it would have been had it continued to grow at 4.4 percent after 1907.

The latter disparity may seem incredible, but scan the lists here and you will find even greater cross-national disparities in per capita GDP. Go here and you will find that real, per capita GDP in 1790 was only 3.3 percent of the value it had attained 201 years later. Our present level of output seems incredible to citizens of impoverished nations, and it would seem no less incredible to an American of 201 years ago. But vast disparities can and do exist, across nations and time. We have every reason to believe in a sustained growth rate of 4.4 percent, as against one of 2.2 percent, because we have experienced both.

These numbers are only a proxy for the loss of liberty associated with the massive growth of government in the U.S. Economic stagnation is the inevitable outcome of punitive taxes and burdensome regulations, all adopted in the name of one or another “good” cause. Those who cannot stand to see others rise above them are doomed to suffer the consequences of leveling, unless they happen to be co-conspirators in the erection of the fascistic state (or whatever you want to call it).

ANOTHER VIEW OF HOW WE GOT HERE, AND WHERE WE’RE HEADED

James V. DeLong, in a recent article (“The Coming of the Fourth American Republic,The American, April 9, 2009), advances a similar view as to the causes of our present condition:

[T[he New Deal … radically revised the role of government. The process of economic growth was tumultuous, and the losers and dislocated were constantly appealing against the national political commitment to “let us do.” The crisis of the Great Depression provided a great opportunity, and it was seized. Starting in the 1930s, the theoretical limitations on the authority of governments—national or state—to deal with economic or welfare issues were dissolved, and in the course of fighting for this untrammeled power governments eagerly accepted responsibility for the functioning of the economy and the popular welfare.

…Remaining limits on governmental authority were eliminated by the dialectic of the civil rights revolution, in which the federal power over commerce was expanded to meet moral imperatives, and the new standards were then fed back into regulation of commerce.

Inherent in the expansion of governmental power was the complicated question of how this unbridled power would be exercised. As the reach of any institution expands, especially anything as cumbersome as a government, it becomes impossible for the institution as a whole to exercise its power. Delegation to sub-units is necessary: to agencies, legislative committees and subcommittees, even private groups.

The obvious issue is how these subunits are controlled and directed. The theoretical answer had been provided by the Progressive movement (the real one of the early 20th century, not the current faux version). Much of the Progressive movement’s complaint was that special interests, often corporate, captured the governmental process, and its prescriptions were appeals to direct democracy or to administrative independence and expertise on the theory that delegation to technocrats could achieve the ideal of “the public interest.”

The real-world answer imposed by the New Deal and its progeny turned out to be special interest capture on steroids. Control comes to rest with those with the greatest interest or the most money at stake, and the result was the creation of a polity called “the Special Interest State” or, in Cornell University Professor Theodore Lowi’s terms, “Interest Group Liberalism.” Its essence is that various interest groups seize control over particular power centers of government and use them for their own ends.

It is this combination of plenary government power combined with the seizure of its levers by special interests that constitutes the polity of the current Third American Republic. The influence of “faction” and its control had been a concern since the founding of the nation, but it took the New Deal and its acolytes to decide that control of governmental turf by special interests was a feature, not a bug, a supposedly healthy part of democratic pluralism.

In DeLong’s analysis, the First American Republic, which lasted until the Civil War, was  the “alliance-of-[S]tates polity.” In the Second American Republic, following the victory of the Unionist cause in the Civil War,

sovereignty belong[ed] to the nation first and the [S]tate second, and … the nation rather than the [S]tate claim[ed] a citizen’s primary loyalty…. The shift [from the First Republic] was traumatic and took decades to complete, but eventually the [S]tates became largely instruments of federal policy, except for a few areas in which conformity is unnecessary or special interests have managed to preserve [S]tate autonomy for their own purposes.

What lies beyond the Third Republic’s special-interest state? According to DeLong, it goes like this:

This Third Republic has had a good run. It was wobbling in the late 1970s, but got bailed out by a run of good luck—Reagan; the fall of the USSR; the computer and information revolution; the rise of the Asian Tigers and the “BRICs”; the basic dynamism and talent of the American people—that kept the bicycle moving and thus upright.

It could continue. It is characteristic of political arrangements that they go on long after an observer from Mars might think that surely their defects are so patent that they have exhausted their capacity for survival…. The culture, the people, are astonishingly creative and productive, and may demonstrate a capacity to keep the bicycle moving faster than the demands of the Special Interest State can throw sand in the gears.

But it is more likely that the Special Interest State has reached a limit.

This may seem a dubious statement, at a time when the ideology of total government is at an acme, but it is not unusual for decadent political arrangements to blaze brightly before their end. Indeed, the total victory of the old arrangements may be crucial to bringing into being the forces that will overthrow it. In some ways, the grip of the aristocracy on 18th-century France tightened in the decades leading up to 1789, and the alliance-of-states idea could have lasted a while longer had the Confederacy not precipitated the crisis. So the utter triumph of the Special Interest State over the past 15 years, and particularly in the recent election, looks like the beginning of its end.

A catalogue of its insoluble problems includes:

Sheer size. The usual numbers concerning the size of government in the United States are that the Feds spend about 20 percent of GNP and other levels of government at least another 16 percent. These do not reflect the impact of tax provisions, regulations, or laws, however, so an accurate estimate of how much of the national economy is actually disposed of by the government is impossible. Whatever it is, it is growing apace, and the current administration is determined to increase it considerably.

Responsibility. As the government has grown in size and reach, it has justified its claims to power by accepting ever more responsibility for the economy and society. Failure will result in rapid loss of legitimacy and great anger…. And as the government’s reach extends, any chance that it will meet its self-proclaimed responsibilities declines.

Lack of any limiting principles. There is no limit on the areas in which special interests will now press for action, nothing that is regarded as beyond the scope of governmental responsibility and power. Furthermore, special interests are not limited, cynically trying to get an undeserved economic edge or subsidy…. Inevitably, special interests try to convert themselves into moral entitlements to convince others to agree to their claims. The problem is that many have convinced themselves, which means that no half loaf satisfies. The grievance remains sharp, and compromise immoral….

Conflicts. The Special Interest State could get along quite well when it simply nibbled at the edges of the society and economy, snipping off a benefit here and there, and when the number of victorious interests was limited. But the combination of moral entitlement, multiplication of claimants, and lack of limits on each and every claim is throwing them into conflict, and rendering unsustainable the ethic of the logrolling alliances that control it.

The guiding principle is that no member of the alliance will challenge the claims of any fellow member. But this principle has a limit, in that unlimited claims cannot help but impinge eventually on each other….

We are in a crisis of legitimacy. The concept of legitimacy, the right to rule, is the single most important factor in political life. The particulars of how it is gained and lost are infinitely varied, according to the culture and history of the polity….

In the United States, legitimacy is conferred by elections, but it is not total. Through the ages, the basic question mark about democracy as a form of government has been that 51 percent of the electorate can band together to oppress the minority—“the tyranny of the majority” is a valid concern. To address it, the United States has a formal written Constitution to guarantee basic rights, but it also has an unwritten constitution that sets limits on how far the winners can push their victories….

Over the past few years, political winners have become increasingly aggressive, culminating in President Obama’s recent “We won” as an assertion of an unlimited mandate. Losers have become increasingly restive, ready to attack the legitimacy of the winners’ victory….

[I]f each party is regarded by the other as a principle-free alliance of special interests, eager to claim the government so as to loot the other side, then a large chunk of legitimacy is lost. All that remains of that concept depends on the government’s ability to deliver overall economic prosperity and national defense, and if the rulers falter in either of these realms, they will receive no slack. Nor should they.

Given these trajectories, and the lack of any mechanisms for altering them, it is hard to see how the polity of the Third Republic can continue, and, as former Council of Economic Advisers Chairman Herbert Stein said: “If something cannot go on forever, it will stop.” The question is whether the landing will be hard or soft….

[I]t is difficult to see any self-correcting mechanisms in the Special Interest State. Quite the reverse; the incentives all seem to be pushing the accelerator rather than the brake….

So what will the Fourth American Republic look like, and how will it come about? The answers are shrouded in the mists of a highly plastic future, and depend to a large extent on the outcome of the current economic crisis. If that grows severe, the change will be quick and explosive. As noted, an American government that presides over a depression will immediately lose the Mandate of Heaven—the Lady will reclaim the sword.

If this immediate crisis is alleviated, then change may have to await the next one, which will certainly come as more and more sand gets thrown in the gears of the Special Interest State and the bicycle eventually stops….

Two possibilities for change seem most promising. The first is a third political party that explicitly repudiates the present course and requires that its members eschew the legitimacy of the Special Interest State. This would require a certain almost religious fervor, but the great tides of history and politics are always religious in nature, so that is no bar.

This second would be more bottom-up. The Constitution has a residue of the original alliance-of-[S]tates polity that has never been used. Two-thirds of the [S]tate legislatures can force Congress to call a constitutional convention, and the results of that enterprise can then be ratified by three-quarters of the [S]tates. So reform efforts could start at the grassroots and coalesce around [S]tates until two-thirds of them decide to march on the Capitol….

IS THERE LIFE BEYOND FASCISM?

In my view, the Third Republic is unlikely to end soon, unless:

  • Obama’s “stimulus” policies — including his efforts to nationalize a large part of the auto industry and all of the health-care industry — fail spectacularly (e.g., we slip deeper into recession, there is a massive backlash against health-care nationalization).
  • Obama continues to follow the path of accommodation and appeasement in foreign and defense policy, and the United States suffers a devastating setback (e.g., a terrorist attack on the scale of 9/11 or worse). (The setback need not be a direct result Obama’s policies; it would nevertheless be perceived as such.)
  • One of the preceding occurs on the watch of Obama’s successor — presumably a Democrat, if Obama doesn’t fall on his sword.

Absent a débâcle, the special-interest state will not run its course until some of its main constituencies turn from cooperation to conflict — which they will do when their collective greed for an ever-larger share of an ever-weakening economy turns them against each other.

There is a temptation — perhaps born of conflict-avoidance or a fear of seeming callous — to hope against débâcle and for a graceful dénouement. But there will be no graceful dénouement, just a long, messy descent into harder times, harder despotism, and perhaps even subjugation by an coalition of opportunistic enemies. So, for the sake of my grandchildren, I hope for an early débâcle.

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