Socialism for the rich and capitalism for the poor

Socialism for the rich and capitalism for the poor is a classical political-economic argument which states 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. The term corporate welfare is widely used to describe the bestowal of favorable treatment to 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 "privatize profits and socialize losses."[1] The argument has been raised and cited on many occasions.

History and usage

The phrase may have been first popularized by Michael Harrington's 1962 book The Other America[2][3] in which Harrington cited Charles Abrams,[4] 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.[5][6] Since at least 1969, Gore Vidal used the expression “free enterprise for the poor and socialism for the rich” to describe the U.S. economic policies,[7][8] and he used it from the 1980s in his critiques of Reaganomics.[9]

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 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”.[10] 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”.[11]

Economist Dean Baker expressed similar views in his book The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer, in which he pointed out several different policy areas in which government intervention is essential to preserving and enhancing wealth in the hands of a few.[12]

Linguist 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]

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.[16] In September 2008, the US 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”.[17] The same month, economist Nouriel Roubini stated: “It is pathetic that Congress did not consult any of the many professional economists that have presented […] alternative plans that were more fair and efficient and less costly ways to resolve this crisis. This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street”.[18]

Former U.S. Secretary of Labor Robert Reich adapted this phrase on The Daily Show on October 16, 2008: "We have socialism for the rich, and capitalism for everyone else."[19]

Journalist John Pilger included the phrase in his speech accepting Australia's human rights award, the Sydney Peace Prize, on 5th November 2009: "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."[20]

U.S. Senator Bernie Sanders referenced the phrase during his eight-and-a-half-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. [21]

Variations
  • Privatize profits/gains and socialize risks/losses/debts
  • Markets, free enterprise, private enterprise and capitalism for the poor while state protection and socialism for the rich

See also

Notes
  1. Roubini, Nouriel (27 November 2007). "Stealth Public Bailout of Countrywide: Privatize profits and socialize losses". Roubini Global Economics. Archived from the original on 27 November 2007. Retrieved 26 May 2020.
  2. Harrington 1962, p. 170, quote: "socialism for the rich and private enterprise for the poor"
  3. 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.
  4. 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"
  5. Dyson, Michael Eric (1993-01-18). "King's Light, Malcolm's Shadow". The New York Times.
  6. Thomas F. Jackson, Martin Luther King: From Civil Rights to Human Rights: Martin Luther King, Jr., and the Struggle for Economic Justice, ISBN 0-8122-3969-5, ISBN 978-0-8122-3969-0, page 332
  7. Gore Vidal: Reflections Upon a Sinking Ship, Little, Brown, 1969
  8. Gore Vidal: Imperial America, September 1, 2004
  9. 'Free enterprise for the poor, socialism for the rich': Vidal's claim gains leverage, irishtimes.com, September 20, 2008
  10. Kennedy: U.S. oil companies profit; Citgo helps the poor, MetroWest Daily News, January 24, 2007
  11. Mark Jacobson: American Jeremiad, New York Magazine, February 5, 2007
  12. Baker, Dean (2006). The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer. Washington, D.C.: Center for Economic and Policy Research. ISBN 1-4116-9395-7. Reviewed in: Scott Piatkowski: Socialism for the rich, www.rabble.ca, May 25, 2006
  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. Fannie/Freddie's “Socialism for Rich”, July 15, 2008
  17. Sanders, Bernie (September 19, 2008). "Billions for Bailouts! Who Pays?".
  18. Nouriel Roubini: Nouriel Roubini's Global EconoMonitor, September 28, 2008
  19. Interview with Jon Stewart, The Daily Show, Oct 16, 2008: Available at The Daily Show Site
  20. 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:
  21. "Sen. Sanders Held a Tax Cut Filibuster | C-SPAN". Archived from the original on 2011-07-23.

References
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.