The Road to Serfdom Turned Out to be Capitalism. Who Knew?

A few days ago I wrote a post that riffed off George Packer’s We Are Living in a Failed State at The Atlantic. Now Paul Campos at Lawyers, Guns and Money comments on the Packer article also:

An economy based on ruthless profit maximization by the owners of capital at the expense of all other social values decrees that workers must be vulnerable at all times to the whims of just in time supply chains, increasingly precarious conditions of employment — aka the “gig economy” — minimal or non-existent job benefits, and, most crucially, a shredded or imaginary social safety net, so that the whip of the ownership class can be wielded with terrifying effectiveness on tens of millions of people who are always only a paycheck or two away from immiseration.

America is a house of cards, and a strong breeze has, inevitably, begun to blow.

Sums it all up pretty well, doesn’t it? And if one couldn’t see it before the pandemic hit, it’s damn obvious now. The “relief” packages passed by Congress provided truckloads of money to big corporations without transparency or oversight while providing relative pennies to workers facing destitution. A New York Times editorial:

Millions of lower-income households are still waiting for the federal stimulus payments that have landed in the bank accounts of middle-class families.

Many who lost jobs are struggling to register for unemployment benefits.

Only a quarter of small businesses have received federal aid.

For the second time since the crisis began, the end of a month is approaching, and bills are coming due. For all the government has done so far, it is starkly clear that more is required.

Instead of providing for the people who are on the edge of destitution, too many in Congress  fret that too generous unemployment benefits will “incentivizing people to leave the workforce.” Indeed, the unemployment compensation system was designed to be punative, to be frustrating, to fail. The peasants have to be incentivized to take any job they can get, you know. Even when there are no jobs.

Katrin Bennhold wrote in the New York Times that Europeans have been stunned by how badly the U.S. is handling the pandemic crisis.

As images of America’s overwhelmed hospital wards and snaking jobless lines have flickered across the world, people on the European side of the Atlantic are looking at the richest and most powerful nation in the world with disbelief.

“When people see these pictures of New York City they say, ‘How can this happen? How is this possible?’” said Henrik Enderlein, president of the Berlin-based Hertie School, a university focused on public policy. “We are all stunned. Look at the jobless lines. Twenty-two million,” he added.

I’m predicting that by the fall, most of Europe and other industrialized democracies around the world will have — cautiously and tentatively — returned to something approximating “normal,” while we will be locked into cycles of waves of infection, and our economy will be tanking beyond redemption. It didn’t have to be this way, but I fear that’s how it’s going to be here.

And one reason we’re going to be more hurt than other countries is that we’ve been skirting by on the cheap for years, with the flimsiest safety net and most inefficient and  inadequate health care system. And that’s because every bleeping thing in this country is calibrated to squeeze whatever can be monetized out of natural resources and  people and send it up the food chain to the fabulously wealthy few at the top.

“America has not done badly, it has done exceptionally badly,” said Dominique Moïsi, a political scientist and senior adviser at the Paris-based Institut Montaigne. …

… “Europe’s social democratic systems are not only more human, they leave us better prepared and fit to deal with a crisis like this than the more brutal capitalistic system in the United States,” Mr. Moïsi said.

Eric Levitz, Coronavirus Exposes the Sickness of America’s Shoddy Welfare State

Twenty-seven million people in the world’s wealthiest country possess no health insurance of any kind. Millions more have coverage too skimpy to use for nonemergencies. Last year, a record-high 25 percent of Americans told Gallup that they or one of their family members delayed treatment of a serious condition out of concern for the cost of seeking care. And it isn’t hard to see why: The average deductible for an individual with employer-sponsored insurance has increased by 162 percent since 2009.

More than 33 million Americans lack access to paid sick leave. About half of all service workers (among them, line cooks and elder-care workers) cannot take a day off without losing pay. Meanwhile, thanks to our nation’s weak labor unions and at-will employment policies, many workers who do officially have paid leave are too afraid of repercussions to use it.

It’s gospel to American conservatives that providing citizens safety net benefits — also known as “handouts” — renders them lazy and shiftless and keeps them out of the workforce. In truth, the lack of supports such as paid sick leave, health care, and child care probably hampers productivity far more than the welfare recipients of Republican fantasy who are somehow enjoying carefree lives on government checks.

One recent study found that when states require employers to provide paid sick leave, influenza infections fall by more than 10 percent. There are also quantifiable ways in which failing to provide Americans with access to health care imposes cost on society at large. For example, there is some evidence that the financial insecurity and medical deprivation that low-income Americans suffer when they lack health insurance impedes their capacity to work: In Michigan, Medicaid expansion was associated with an increase in labor-force participation among low-income and nonwhite residents. Meanwhile, when Americans forgo early treatment of an ailment due to cost concerns, they often end up requiring even more expensive care — and suffering worse health outcomes — than they would have otherwise.

I’ve written a couple of times about the parallels between today’s Republicans and the English during the Irish Famine. As more than a million Irish starved — in spite of producing plenty of food, which of course was owned by the English — members of Parliament argued that it would be wrong, even immoral, to provide the Irish with food, because it would spoil them as a source of labor.  Timothy Egan:

“The Almighty, indeed, sent the potato blight, but the English created the famine,” wrote the fiery essayist John Mitchel, whose words bought him a ticket to the penal colony of Tasmania.

What infuriated Mitchel was that the Irish were starving to death at the very time that rich stores of grain and fat livestock owned by absentee landlords were being shipped out of the country. The food was produced by Irish hands on Irish lands but would not go into Irish mouths, for fear that such “charity” would upset the free market, and make people lazy.

By the same token, “Providence,” or however the natural world arranges these things, produced the coronavirus. But it took decades of American conservative policy to create the mess we’re in now. And the foundational basis of American conservative policy is that capitalism must be pure and unimpeded, and is next to godliness.

And this takes us to Friedrich Hayek and his book The Road to Serfdom, first published in 1944, which became a cornerstone of movement conservatism and libertarianism. Hayek was certain that the ultimate evil that would destroy democracy and individual liberty is central planning of the economy. Free markets equal free people. The key to maintaining individual liberty is to support the free exercise of capitalism and markets. Conversely, it was self-evident to conservatives that capitalism and tyranny cannot co-exist, and that if (for example) Communist countries would become more capitalist, individual liberty for their citizens would follow closely behind. Hayek wrote,

Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his absolute mercy. And an authority directing the whole economic system of the country would be the most powerful monopolist conceivable…it would have complete power to decide what we are to be given and on what terms. It would not only decide what commodities and services were to be available and in what quantities; it would be able to direct their distributions between persons to any degree it liked.

And, by damn, you can go into any WalMart in America and find a dozen different brands of toasters offered at a variety of prices. Freedom!

Hayek failed to imagine the rise of a wealthy and powerful rent-seeking class, an oligarchy if you will, ruthlessly exploiting the labor and lives of a growing majority of citizens. Why he couldn’t see that is a bit mystifying, since it’s what the world was like in the 19th and early 20th centuries, but never mind.

It’s true that communism and democracy have never co-existed. But now the question is being asked — can capitalism and democracy co-exist? The terrible irony is that the same Hayekian school of economics that came to dominate American conservative thought, and which promised that capitalism equals liberty, is turning the U.S. into something approximating a fuedal state. Most of the government is on the side of the oligarchy, while more and more of us live on the economic edge, dependent on the oligarchy that exploits us. The system creaks along well enough until some unforeseen event — a potato blight; a pandemic — kicks the props out from under it. And then it all comes crashing down.

And since our government is still controled by the oligarchy, most of it can’t respond to the crisis in any effective way. I say can’t instead of won’t; I think the idea behind the relief checks and the Paycheck Protection Plan was not bad, but the system is so creaky and so calibrated to benefit only the oligarchy that it can’t get relief for ordinary citizens right even when it tries.

And between Trump and McConnell, going forward don’t expect it to try very hard.

Do not doubt that the genuinely hard-core right-wingers would not flinch at letting millions of Americans die rather than end the gravy train for the rich. There are more important things than living, after all.

Now we have the double whammy of a portion of the exploited class turning to an authoritarian strongman to save them, somehow blind to the fact that the strongman is purely a creature of the system that exploits them. Thus it is that mostly working-class white men are marching around calling for pandemic restrictions to end so that they can risk their lives working for the oligarchy.

This may not end well.

In this April 2020, photo provided by Tyson Foods, workers wear protective masks and stand between plastic dividers at the company’s Camilla, Georgia poultry processing plant. Tyson has added the plastic dividers to create separation between workers because of the coronavirus outbreak. (Tyson Foods via AP)

5 thoughts on “The Road to Serfdom Turned Out to be Capitalism. Who Knew?

  1. There will be blood.

    After the worst of this pandemic has passed on by:

    Will people who've been living in solitary (or familial) confinement, who've seen loved ones sicken or die, accept a return to the prior economic/political "normal?" 

    Will people who've seen on their TV's the hospitals with refrigerated trucks in their parking lots, used to store the excess of corpses, their numbers too many for already overflowing morgues to handle, accept a return to the prior economic/political "normal"?

    Will people who have "adequate" health coverage look at the growing number of sick and dead people and think, "I wonder how many had coverage that could handle the costs of getting sick and/or dying; how many didn't; and do I, really, have coverage that can handle these costs?", accept a return to the prior economic/political/medical "normal?"

    Will we continue to value and laud our new "heroes" after the worst is over – the doctors, nurses, cops, firemen, grocery clerks, EMS, sanitation and transportation workers, the delivery people, etc… – or, after this emergancy ends, accept a return to the prior economic/political/medical/salary "normal?", where too many, most, in fact, are not even close to making a liveable wage?

    The answer had better be that we Americans should not, can not, and WILL NOT accept a return to our prior "normal."   That "normal" is NOT the normal of the rest of the major industrialized countries.

    Will we?  Should we?  Can we?  Return to the prior economic/political/medical/salary/societal "normal?"

    The powers-that-be will, of course, expect us to meekly return to "normal."

    But I think this pandemic has opened the eyes of people who our rich and powerful will expect to continue and return to live their meager "normal" lives with their blinders on. 

    But I think the pixie dust used by our poisonous economic masters, and their political helpers, will have lost its spell.

    Those rich and powerful people will not easily loosen their economic stranglehold on the necks of the poor and working classes.

    There will be blood when we finally awaken from their spells, and fight to loosen that stranglehold.  That blood, will be our blood.

    And there will be blood if too much of our blood is spilled, and the rich and powerful still will not loosen that stranglehold.  And that blood, will be their blood.

    Either way, I don't expect any return to our prior "normal."

    There will be blood.

    I hope I'm very, very wrong. 


  2. I will never understand people with Irish blood like me who are anglophiles. Marx was wrong about history (too Hegelian), but he saw the problem clearly. 

  3. We all knew at one time, but the knowledge was not passed down.  I have tried to transmit the wisdom of the elders to the new generations but widgets are tough competition.  Billie Eilish and her musical genius brother's help might be the only hope of cultural transmission.  I will write a bit here, and at least some of the old wisdom will meet a printed record. 

    Forty acres and a brace of mules, the old farmer told me about a half of a century ago.  That was all a person needed  to have a good life when I grew up.  He was talking about his youth which was at least a half of a century before.  The recent immigrant population, at that time, was happy to settle for subsistence farming.  They had had worse.  It was not just the Irish who starved while farming, as their work was plundered and their children were abducted for fighting wars.   At least in the new world they had ownership and security for a while.  They also had wisdom about what to watch out for, what could take it away.

    They knew well, and avoided the traps of the old world.  Those who milled grain and shorted the farmer on the flour.  Meat cutters and packers who did the same.  Bankers and merchants easy with credit who swooped in and took your land when tough times inevitably came.  So they avoided capitalist traps and formed cooperatives to protect themselves from these traps.  When you and your fellow farmers ran the grain elevator and owned it, you had protection.  It was a bit of communism and a touch of socialism but really a whole lot of pragmatism.  If you let capitalists in, they would squeeze you into starvation and send your kids off to die in wars, just like they did in the old country.  Sooner or later your labor would be stolen, your livelihood taken, and you would be back to the serf status again.  

    This is the base cultural wisdom that has been lost, and with it our biggest social safety net.  The knowledge and fear of those who would exploit and repress.  The old world generation learned what to avoid from the school of hard knocks.  We now have so many people that are uninsured, gig workers, and temporary or part time help.   Unlike the subsistence farmer of old, they have no basic security, and at this time these workers might even yearn for a shot at forty acres and a pair of mules.  It sure beats being a wage slave when there are no jobs.  The 70% figure is being posited as the number of Americans who are at present financially marginal.  This is before the plague.  Now the school of hard knocks is open for business and enrollment is way up.  It is going to take some quick learning to get a diploma.  The grading system will be tough, no grade inflation here.  No social promotion here either, so do not get behind.  May some of the old wisdom guide their way.  

    • Old school wisdom I grew up with:

      Keep getting up.

      You don't get up, you don't work.

      You don't work, you don't eat.

      You don't eat, you don't live.

  4. One small caveat. “Thus it is that mostly working-class white men are marching around calling for pandemic restrictions to end so that they can risk their lives working for the oligarchy.”

    To judge from interviews with these protesters, many (if not most) are petit-bourgeois business owners (bars, restaurants, landscaping businesses, contractors). They want other people to get back to work and risk their lives to prop up their small businesses. The conflation of these largely middle-class protesters with the working class (just because they happen to wear Crocs with their assault rifles) is a dangerous blind spot. 


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