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Friday, January 23, 2009

Too big to fail: feudalism, socialism and other demons of capitalism

(From my examiner.com column)

There is a lot of talk these days about how the $700 billion bank bailout that passed in 2008 was a step toward socialism, that we were effectively nationalizing the banks. The "big bad" government would own our savings and our mortgages.

In fact, at the end of last year, according to Fox News, RNC Vice Chairman James Bopp, Jr., tried to get Republicans to sign on to a resolution that said, in part, that bailouts and other federally funded stimuli are:

"...moving our free-market based economy another dangerous step closer toward socialism."

(The GOP continues to find endorsers of the pending resolution. It is scheduled to be voted on next week by party delegates attending the RNC Winter Meetings in Washington, DC.)

But to move toward socialism in this country would take a lot more than having some ownership in banks and automobile companies. It seems to me that it is easier to view last year's final money grab by the outgoing administration as a slide back to feudalism, rather than a leap ahead to socialism.

Here's why I say that.

When, in the course of human events, our forebears revolted and evolved the radically progressive democratic republic we call home, they only sidestepped the troubling system of King George and the lords who supported and served him. Rather than allow a ruler to disseminate what was his will, the United States of America was to be a nation that was run according to the will of the people. To insure that no one branch of government superseded the other, the Founding Fathers intelligently installed a system of checks and balances.

We do not work to serve the king. We do not work to serve the lord of the manor. We work to better our own lives and the lives of our neighbors.

Let me take you back to that time, though, when the king counted on his loyal lords to give tributes and defend his lands. In return, the king ensured that those who supported him were all in alliance. If one of the fiefdoms chose to no longer support the king, His Royal Highness could entreat neighboring lords to subdue the free lance, in exchange for treasures and more land to call their own.

Likewise, if the kingdom was losing land to an invader, and his own lords were failing in their common defense, he would send the King's Army out to help them. If the fight was really desperate, the king would send an emissary to another kingdom, to ask for their help with men and money. In this way, wars were fought in feudal Europe for hundreds of years.

The patronage period of the Renaissance was only a different form of the same thing. The merchant republics that gave birth to the Italian Renaissance were little more than oligarchies, an early, quite undemocratic, form of capitalism. Someone with money made your life possible, but it was still a class society where nobility got ahead and the peasants suffered.

Indeed, according to Wikipedia's entry for Renaissance/Historiography, "many historians now point out that most of the negative social factors popularly associated with the 'medieval' period – poverty, warfare, religious and political persecution, for example – seem to have worsened in [the Renaissance] era."

The royal courts of Europe in the closing centuries of the last millennium were just an extension of that oligarchy. The royalty of the time was so puffed up about the Renaissance that their ancestors created, that they did not notice the seething peasantry they were crushing under their pointy shoes. They told them to "eat cake."

Even today, there are those who argue that in order to get Americans working, you have to make sure the companies that employ them get all kinds of breaks, like offshore tax shelters, like not having to pay them their employees a living wage. The trickle-downers basically echo that old capitalist chestnut, "What's good for GM is good for America."

Companies that are "too big to fail" are just modern day fiefdoms. Giving them our tax dollars, and the money we have gone to China to borrow, is just a new way for the king to save his realm. It is not socialism. It's just a perpetuation of the status quo.

-PBG
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