Specifically coal.
I don’t really want to debate it, I am just interested in peoples opinion on the boundaries of socialism…
It sort of is. But it gets you close to a definition where anything other than collecting a flat tax to implement essential services is socialism.
This. The US is a socialist country in numerous ways. That doesn’t mean we have a socialist economy overall, but at times portions of the economy are socialist.
In the case of coal, it’s a bad idea, but not really socialism.
Government intervention isn’t “socialism” per se, particularly if the industry it’s intervening to support remains organised around shareholder-owned companies. It might be, if the companies collapse, and support turns into a bottomless pit and the government has to take over the running of the industry in question, and the people and communities organised around it. But if the support enables the industry and/or its people and communities to adapt and prosper to the point where they no longer need it, then it’s an investment. Mind you, then there’s an argument about how, and how much, return on the taxpayers’ investment should be taken back into the tax pot.
I don’t know that socialism is the right word, but I don’t have enough background in economics to suggest a better description. So I’ll just go with naita until something better come’s along.
Socialism means trying to spread wealth or prop up the entire society as a whole. Specifically targeting one dying industry is more like crony capitalism or just bad economic policy, or favoritism.
I’d say “stupid” more than “socialism”, but the boundary between the two is not always clear. The reason it is a bad idea is because the government is no better at predicting supply and demand than private business, and has more power to enforce monopoly and/or pick winners and losers in the market. That is, governments are less subject to the power of creative destruction, where companies lose business because people buy what they want and don’t buy what they don’t want, and therefore either innovate or die. Governments can just shift costs from consumers to taxpayers.
Tripolar is correct - some parts of our economy are socialist. That’s not to say that they necessarily should or should not be, just that they are.
Regards,
Shodan
That’s kind of a thin definition of “socialism,” which in fairness means something different to everyone.
Socialism in the original sense is community ownership of the means of production; it’s what Marx wanted. Propping up an industry kind of moves towards that, depending on the details.
Is the answer the same for coal as it is for electric vehicles? Because the government props both up with taxpayer money.
No? But I guess it depends on how the money is spent. If it’s a bunch o money given to the businesses so that they can continue to pretend to be productive, then no, that’s corporate welfare and a horrible waste of money. If it’s given to laid off workers so they can get on with their lives, I think that’s closer. But if it’s to keep an industry moving even though there is no longer a product then it’s just stupid. Coal specifically is very close to the last category.
Electric vehicles is a relatively young and developing technology. Coal is the opposite of that. So they’re different. One is an investment, the other is a waste.
The government offers an incentive to get people to buy electric vehicles. The government desires to force the grid to buy from the coal and nuclear plants.
If instead the government offered a rebate to buy from coal, then it would be more similar.
If you substitute ‘collectivist’ for ‘socialist’, two related concepts the answer is obviously yes. It’s a collective action where economic costs are shuffled around via govt compulsion. This is also true even if the method of propping up the industry, say in case of steel, is tariffs rather than the proposed idea of forcing domestic electric consumers to buy coal generated power. Tariffs are hard to define as ‘socialism’, but tariffs to force certain economic outcomes (as opposed to just raising money for needed govt spending, which is a distinct after thought in US case recently) are collectivism. It doesn’t really matter much IMO if you argue that particular coercive govt interventions in the economy are socialism per se or some other form of collectivism.
I have a similar take, but my comparison is not collectivism but rather an interference in the “free market” put in quotes because there never a truly free market in an economy as a whole. But this still does lessen the “freeness” of the market even though it is not socialism.
I wonder what people who support this action thought of Solyndra.
In the US, if you produce Milk products and can’t find a buyer, the Government will buy the milk from you. There are companies that produce Milk products and sell it to the government and then make deciding what to do with the products the taxpayer’s problem. Is that socialism? Why doesn’t that anger “Free Market” warriors?
The answer is that the arguments are BS. The government can and always has involved itself with business (and that is a good thing, mind you, true unfettered Capitalism would devolve to people selling poison and calling it baby formula. There need to be rules). The real argument is what you think should be the Government’s priorities. That is an honest debate. But we don’t have that. Instead if the Free Market warrior doesn’t like it, it’s creeping socialism. If they do like it (usually because a fellow Billionaire is making their fortune off taxpayer money), they pretend it doesn’t exist.
I would expect they thought of it as an investment.
Regards,
Shodan
I voted “Not really”, but the more I think about it, the more I think it likely is in many cases.
Propping up any industry with subsidies or “non-market” rules is going to be an inefficient transfer of money into that industry, which is going to be split (not necessarily equally) between capital and labor. Obviously, there’s a continuum there. Some industries are going to end up more tilted toward labor/capital than others. For all kinds of complicated reasons.
I would argue that propping up dying industries is likely to result in more of those gains going to labor than propping up a burgeoning industry.
There are likely a lot of coal mines and coal processing capital that’s approaching uselessness. Eventually coal is going to die, at which point all your coal-related machines are useless. Subsidies to this industry aren’t going to be spent on R&D or capital expenditures that will make the owner’s stake more valuable in the future. They’re going to be spent on extracting profits over expenses, and most of those expenses (since they’re not investing for the future) are going to be labor.
By contrast, subsidies to new industries like solar are going to result in early entrants gaining a foothold and important patents and technologies that (if they work well) will potentially be worth huge amounts in the future. They have to pay wages too, but necessarily a lot of their expenses are going towards capital building.
That’s my armchair economist way of thinking about it anyway.
Is the Post Office socialism? Or Amtrak? Or farm subsidies?
True socialism IMHO requires that ownership means of production be redistributed to the general public. Is the state taking ownership of the coal companies or simply providing economic subsidies?
Now, I would say the opposite. I think it’s definitely socialism, but not necessarily a bad idea because of that.
It’s a bad idea for a lot of other reasons, but not because it’s socialism.
It’s a bad idea because it’s not going to be profitable as long as natural gas is cheap.
It’s a bad idea because it’s unhealthy for all those who live down wind of the power plants
It’s a bad idea because it’s unhealthy for the miners.
It’s a bad idea because it doen’t really even make the miners any better off monetarily.
It’s a bad idea because it lays off all the external costs of environmental damage on the taxpayers.
But it’s not necessarily a bad idea because it’s socialism.
Having rules and collectivism are not the same thing. Your first paragraph pointed out hypocrisy by unnamed ‘free market warriors’ about milk price supports. Be that as it may, it doesn’t make milk price supports, steel tariffs or mandated purchase of more expensive coal generated electricity (three collectivist things) the same as property rights or pure food and drug laws (non collectivist neutral rules).
You can find any ridiculous extreme nowadays on the internet. But uber-libertarians claiming that regulation is necessarily collectivist are just mistaken. Regulation can be imposed ostensibly as neutral rules but actually used to put the govt thumb on the scale to alter economic outcomes from what truly neutral rules would bring. Similarly tariffs aren’t collectivist if the goal is simply to raise the necessary funds to operate the govt, as is the case in some less advanced economies with more difficulty applying sales, income etc taxes. But tariffs are almost always collectivist in aim in advanced economies nowadays, as regulations fairly frequently are also (‘fair lending regulation’ that turns into lending quotas by race for example, not saying that should or shouldn’t happen, but it’s collectivist). But regulations certainly, and even tariffs, are still distinct from measures like milk price supports or mandating purchase of more expensive coal power which are inherently collectivist.