Welfare and Liberal Democracy are Capitalist

BobaBounces · Feb 9, 2013

I don't understand how, a century after it had been well established by communists and economists alike, that I still hear 'communists' and 'socialists' cheering on the welfare-corporatist state. Don't you know Fascism is the same whether it wears a 3-piece or jackboots? Don't you know anyone can say he is a 'progressive' if it suits him?

The Marxist answers that market socialism cannot exist because it involves limiting the incentive system of the market through providing minimum wages, high levels of unemployment insurance, reducing the size of the reserve army of labour, taxing profits, and taxing the wealthy. As a result, capitalists will have little incentive to invest and the workers will have little incentive to work. Capitalism works because, as Marx remarked, it is a system of economic force (coercion).
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Market Socialism: The Debate Among Socialists

New Left historian and Marxist Gabriel Kolko could tell you much the same in his Triumph of Conservatism: the 'progressive era' was the triumph of big business, and 'trust-busting' was actually monopoly capitalism with a Federal club.

Why did economic interests require and demand political intervention by the federal government and a reincarnation of the Hamiltonian unity of politics and economics?
In part the answer is that the federal government was always. involved in the economy in various crucial ways, and that laissez faire never existed in an economy where local and federal governments financed the construction of a significant part of the railroad system, and provided lucrative means of obtaining fortunes. This has been known to historians for decades, and need not be belabored. But the significant reason for many businessmen welcoming and working to increase federal intervention into their affairs has been virtually ignored by historians and economists. This oversight was due to the illusion that American industry was centralized and monopolized to such an extent that it could rationalize the activity in its various branches voluntarily. Quite the opposite was true.
Despite the large number of mergers, and the growth in the absolute size of many corporations, the dominant tendency in the American economy at the beginning of this century was toward growing competition. Competition was unacceptable to many key business and financial interests, and the merger movement was to a large extent a reflection of voluntary, unsuccessful business efforts to bring irresistible competitive trends under control. Although profit was always a consideration, rationalization of the market was frequently a necessary prerequisite for maintaining long-term profits. As new competitors sprang up, and as economic power was diffused throughout an expanding nation, it became apparent to many important businessmen that only the national government could rationalize the economy. Although specific conditions varied from industry to industry, internal problems that could be solved only by political means were the common denominator in those industries whose leaders advocated greater federal regulation. Ironically, contrary to the consensus of historians, It was not the existence of monopoly that caused the federal government to intervene in the economy, but the lack of it.
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Karl Marx in his "Address of the Central Committee to the Communist League" wrote:

The democratic petty bourgeois, far from wanting to transform the whole society in the interests of the revolutionary proletarians, only aspire to a change in social conditions which will make the existing society as tolerable and comfortable for themselves as possible. They therefore demand above all else a reduction in government spending through a restriction of the bureaucracy and the transference of the major tax burden into the large landowners and bourgeoisie. They further demand the removal of the pressure exerted by big capital on small capital through the establishment of public credit institutions and the passing of laws against usury, whereby it would be possible for themselves and the peasants to receive advances on favourable terms from the state instead of from capitalists; also, the introduction of bourgeois property relationships on land through the complete abolition of feudalism. In order to achieve all this they require a democratic form of government, either constitutional or republican, which would give them and their peasant allies the majority; they also require a democratic system of local government to give them direct control over municipal property and over a series of political offices at present in the hands of the bureaucrats.
The rule of capital and its rapid accumulation is to be further counteracted, partly by a curtailment of the right of inheritance, and partly by the transference of as much employment as possible to the state. As far as the workers are concerned one thing, above all, is definite: they are to remain wage labourers as before. However, the democratic petty bourgeois want better wages and security for the workers, and hope to achieve this by an extension of state employment and by welfare measures; in short, they hope to bribe the workers with a more or less disguised form of alms and to break their revolutionary strength by temporarily rendering their situation tolerable. The demands of petty-bourgeois democracy summarized here are not expressed by all sections of it at once, and in their totality they are the explicit goal of only a very few of its followers. The further particular individuals or fractions of the petty bourgeoisie advance, the more of these demands they will explicitly adopt, and the few who recognize their own programme in what has been mentioned above might well believe they have put forward the maximum that can be demanded from the revolution. But these demands can in no way satisfy the party of the proletariat. While the democratic petty bourgeois want to bring the revolution to an end as quickly as possible, achieving at most the aims already mentioned, it is our interest and our task to make the revolution permanent until all the more or less propertied classes have been driven from their ruling positions, until the proletariat has conquered state power and until the association of the proletarians has progressed sufficiently far - not only in one country but in all the leading countries of the world - that competition between the proletarians of these countries ceases and at least the decisive forces of production are concentrated in the hands of the workers. Our concern cannot simply be to modify private property, but to abolish it, not to hush up class antagonisms but to abolish classes, not to improve the existing society but to found a new one.
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