A more apt connection of current events to actual socialism was made by Sen. Ron Johnson, the Wisconsin Republican, when President Trump decided to validate the conservative axiom that government often is the disease for which it pretends to be the cure. When the president decided to give farmers a $12 billion bandage for the wound he inflicted on them with his splendid little (so far) trade war, and when other injured interests joined the clamor for comparable compensations, Johnson said, “This is becoming more and more like a Soviet type of economy here: Commissars deciding who’s going to be granted waivers, commissars in the administration figuring out how they’re going to sprinkle around benefits.”
Concerning Johnson’s observation, the Hoover Institution’s John H. Cochrane, who blogs as the Grumpy Economist, says actually, it’s worse than that: “It’s a darker system, which leads to crony capitalism.” Cochrane is just slightly wrong: Protectionism, and the promiscuous and capricious government interventions that inevitably accompany it, is , always and everywhere, crony capitalism. But he is spot on about the incompatibility of America’s new darker system and the rule of law:
“Everyone depends on the whim of the administration. Who gets tariff protection? On whim. But then you can apply for a waiver. Who gets those, on what basis? Now you can get subsidies. Who gets the subsidies? There is no law, no rule, no basis for any of this. If you think you deserve a waiver, on what basis do you sue to get one? Well, it sure can’t hurt not to be an outspoken critic of the administration when the tariffs, waivers and subsidies are being handed out on whim. This is a bipartisan danger. I was critical of the ACA (Obamacare) since so many businesses were asking for and getting waivers. I was critical of the Dodd-Frank Act since so much regulation and enforcement is discretionary. Keep your mouth shut and support the administration is good advice in both cases.”
Now do you see what Friedrich Hayek meant when he said that socialism puts a society on the road to serfdom? Protectionism — government coercion supplanting the voluntary transactions of markets in the allocation of wealth and opportunity — is socialism for the well connected. But, then, all socialism favors those adept at manipulating the state. As government expands its lawless power to reward and punish, the sphere of freedom contracts. People become wary and reticent lest they annoy those who wield the administrative state as a blunt instrument.
Tariffs are taxes, and presidents have the anti-constitutional power to unilaterally raise these taxes because Congress, in its last gasps as a legislature, gave away this power. What do the members retain? Their paychecks. Certainly not their dignity.
Noting that some Trump protectionism is rationalized as essential for “national security,” Cochrane, who clings to the quaint fiction that Congress still legislates, suggests a new law stipulating that such tariffs must be requested — and paid for — by the Defense Department: “Do we need steel mills so we can re-fight WWII? If so, put subsidized steel mills on the defense budget. If defense prefers to use the money for a new aircraft carrier rather than a steel mill, well, that’s their choice.” Actually, the Defense Department, unlike much of the rest of the government, has serious responsibilities and has not trafficked in “national security” nonsense about protectionism.
In 1932, three years into the terrifying Depression, the Socialist Party’s presidential candidate, Norman Thomas, received fewer votes (884,885) in the presidential election than Eugene Debs won (913,693) in 1920 when, thanks to the wartime hysteria Woodrow Wilson fomented, he was in jail. Now, however, there is a Republican president who can teach Ocasio-Cortez a thing or two about the essence of socialism, which is 10-thumbed government picking winners and losers and advancing the politicization of everything .