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Socialism for the rich and capitalism for the poor

(Redirected from Privatizing profits and socializing losses)

"Socialism for the rich and capitalism for the poor" is a classical political-economic argument asserting that, in advanced capitalist societies, state policies assure that more resources flow to the rich than to the poor, for example in the form of transfer payments.[1]

The term corporate welfare is widely used to describe the bestowal of favorable treatment to big business (particular corporations) by the government. One of the most commonly raised forms of criticism are statements that the capitalist political economy toward large corporations allows them to benefit from government interventions ("lemon socialism").[2] The argument has been raised and cited on many occasions.

Variations of the concept, include "privatize profits and socialize risks" (or "privatize gains and socialize risks") as well as "free markets for the poor while state protection for the rich".

History and usage

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The phrase may have been first popularized by Michael Harrington in his 1962 book, The Other America,[3][4] in which he cites Charles Abrams,[5] a well-known authority on housing.

Andrew Young has been cited for calling the United States system "socialism for the rich and free enterprise for the poor," and Martin Luther King Jr. frequently used this wording in his speeches.[6][7] Since at least 1969, Gore Vidal widely disseminated the expression "free enterprise for the poor and socialism for the rich" to describe the U.S. economic policies,[8][9] notably using it from the 1980s in his critiques of Reaganomics.[10]

In winter 2006/2007, in response to criticism about oil imports from Venezuela, that country being under the leadership of Hugo Chávez, the founder and president of Boston's Citizens Energy Corporation, Joseph P. Kennedy II, countered with a critique of the U.S. system which he characterized as "a kind of socialism for the rich and free enterprise for the poor that leaves the most vulnerable out in the cold."[11] Also Robert F. Kennedy Jr. has become known for expressing to large audiences that the United States is now a land of "socialism for the rich and brutal capitalism for the poor."[12]

Linguist and political scientist Noam Chomsky has criticized the way in which free market principles have been applied. He has argued that the wealthy use free-market rhetoric to justify imposing greater economic risk upon the lower classes, while being insulated from the rigours of the market by the political and economic advantages that such wealth affords.[13] He remarked, "the free market is socialism for the rich—[free] markets for the poor and state protection for the rich."[14] He has stated that the rich and powerful "want to be able to run the nanny state" so that "when they are in trouble the taxpayer will bail them out," citing "too big to fail" as an example.[15]

Economist Ha-Joon Chang widens the concept towards self-serving macroeconomic policies of the West that disadvantage the developing world as Keynesianism for the rich, and monetarism for the poor.[16]

Arguments along a similar line were raised in connection with the financial turmoil in 2008. With regard to the federal takeover of Fannie Mae and Freddie Mac, Ron Blackwell, chief economist of AFL–CIO, used the expression "Socialism for the rich and capitalism for the poor" to characterize the system.[17] In September 2008, U.S. Senator Bernie Sanders said regarding the bailout of the U.S. financial system: "This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor."[18] Senator Sanders also referenced the phrase during his 8+1⁄2-hour speech on the Senate floor on December 10, 2010, against the continuation of Bush-era tax cuts, when speaking on the federal bailout of major financial institutions at a time when small-businesses were being denied loans.[19]

Former U.S. Secretary of Labor Robert Reich adapted this phrase on The Daily Show with Jon Stewart on October 16, 2008: "We have socialism for the rich, and capitalism for everyone else."[20] Comedian Jon Stewart later characterized this in a debate with Bill O'Reilly by asking, "Why is it that if you take advantage of a tax break and you're a corporation, you're a smart businessman—but if you take advantage of something that you need to not be hungry, you're a moocher?"[21]

The late journalist John Pilger included the phrase in his speech accepting Australia's human rights award, the Sydney Peace Prize, on November 5, 2009:[22]

Democracy has become a business plan, with a bottom line for every human activity, every dream, every decency, every hope. The main parliamentary parties are now devoted to the same economic policies – socialism for the rich, capitalism for the poor – and the same foreign policy of servility to endless war. This is not democracy. It is to politics what McDonald's is to food.

In 2022, economist Yanis Varoufakis offered a similar version of this phrase in his critique of the response of governments and central banks to the 2008 financial crisis and the 2021–2022 inflation surge, describing these measures as "nothing short of lavish socialism for capital and harsh austerity for labor."[23]

In 2023, Robert F. Kennedy Jr. used a variation of this phrase on Tucker Carlson Tonight, saying that in the contemporary United States, "there's a cushy socialism for the rich and this kind of brutal, merciless capitalism for the poor."[24]

See also

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References

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  1. ^ Friedman, Thomas L. (January 26, 2021). "Made in the U.S.A.: Socialism for the Rich. Capitalism for the Rest". The New York Times. Retrieved January 27, 2021.
  2. ^ Roubini, Nouriel (November 27, 2007). "Stealth Public Bailout of Countrywide: Privatize profits and socialize losses". Roubini Global Economics. Archived from the original on November 29, 2007. Retrieved May 26, 2020.
  3. ^ Harrington 1962, p. 170, quote: "socialism for the rich and private enterprise for the poor"
  4. ^ Engvall, Robert P. (1996). "The connections between poverty discourse and educational reform: When did "Reform" become synonymous with inattention?". The Urban Review. 28 (2): 141–163. doi:10.1007/BF02354382. S2CID 143156198.
  5. ^ Harrington 1962, p. 58, quote: "This is yet another case of 'socialism for the rich and free enterprise for the poor,' as described by Charles Abrams in the housing field"
  6. ^ Dyson, Michael Eric (January 18, 1993). "King's Light, Malcolm's Shadow". The New York Times.
  7. ^ Thomas F. Jackson, Martin Luther King: From Civil Rights to Human Rights: Martin Luther King Jr., and the Struggle for Economic Justice, ISBN 978-0-8122-3969-0, page 332
  8. ^ Gore Vidal: Reflections Upon a Sinking Ship, Little, Brown, 1969
  9. ^ Gore Vidal: Imperial America, September 1, 2004
  10. ^ 'Free enterprise for the poor, socialism for the rich': Vidal's claim gains leverage, Irish Times, September 20, 2008
  11. ^ Kennedy: U.S. oil companies profit; Citgo helps the poor, MetroWest Daily News, January 24, 2007
  12. ^ Mark Jacobson: American Jeremiad, New York, February 5, 2007
  13. ^ Takis Michas, "The Other Chomsky", Wall Street Journal, November 4, 2005. Reproduced on Chomsky's official site.
  14. ^ Noam Chomsky, "The Passion for Free Markets", Z Magazine, May 1997. Reproduced on Chomsky's official site.
  15. ^ C.J. Polychroniou (December 11, 2016). "Socialism for the Rich, Capitalism for the Poor: An Interview With Noam Chomsky". truthout.org. Retrieved September 5, 2018.
  16. ^ Chang, Ha-Joon (2007). Bad Samaritans.
  17. ^ Fannie/Freddie's “Socialism for Rich”, July 15, 2008
  18. ^ Sanders, Bernie (September 19, 2008). "Billions for Bailouts! Who Pays?". Archived from the original on January 18, 2020. Retrieved December 17, 2019.
  19. ^ "Sen. Sanders Held a Tax Cut Filibuster | C-SPAN". Archived from the original on July 23, 2011.
  20. ^ Interview with Jon Stewart, The Daily Show, October 16, 2008: Available at The Daily Show Site
  21. ^ O'Reilly vs Stewart debate, 7 October 2012, retrieved 2021-08-13[dead YouTube link]
  22. ^ Full transcript of the John Pilger speech at the Sydney Opera House to mark his award of Australia's human rights prize, the Sydney Peace Prize: [1]
  23. ^ Daniel, Will (August 2, 2022). "This hipster economics professor turned rebel Greek finance minister says corporations are experiencing 'lavish socialism' while workers face 'harsh austerity.' Inflation is just the latest twist in the saga". Fortune. Retrieved August 5, 2022. Governments were cutting public expenditure, jobs, and services. It was nothing short of lavish socialism for capital and harsh austerity for labor. Wages shrunk, and prices and profits were stagnant, but the price of assets purchased by the rich (and thus their wealth) skyrocketed. Thus…capitalists became both richer and more reliant on central-bank money than ever.
  24. ^ Comins, Joshua (April 19, 2023). "Robert F. Kennedy Jr. warns against 'system of socialism for the rich' as 2024 campaign launches". Fox News. Retrieved April 24, 2023.

Sources

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