Marx, Orwell and State-Cartel Socialism

OK, so our collective eyes start glazing over when we see Marx and Orwell in the subject line, but refill your beverage and stay with me on this. We’re going to explore the premise that what’s called “socialism”–yes, Scandinavian-style socialism and its variants–is really nothing more than finance-capital state-cartel elitism that has done a better job of co-opting its debt-serfs than its state-cartel “capitalist” cronies.

We have to start with the question “what is socialism”? The standard definition is: a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

In practice, the community as a whole is the state. Either the state owns a controlling interest in the enterprise, or it controls the surplus (profits), labor rules, etc. via taxation and regulation.

The problem with equating the community with the state is the community is a completely different order from the centralized state, which is operated and controlled by a self-serving clerisy class that institutionalizes benefiting the few at the expense of the many.

The more accurate definition of socialism is: the means of production are owned and controlled by those who produce the goods and services.

Marx wrote a great many things in his career, and those who view his writings as scripture will argue endlessly over various interpretations and passages, much like people argue over the Bible.

In my view, Marx was a political-economy philosopher, not a demi-god, and so he retained the right to be completely wrong about some things, to contradict himself, to have missed important second-order effects, to have gotten some things half-right, etc., and most importantly, not to have been clairvoyant about the trajectory of history and capitalism, which he correctly identified as disruptively dynamic, i.e. everything solid melts into air.

One of the things Marx got right was the alienation of the producer/ worker from the output of his/her labor. The alienation is not just a loss of ownership; it’s also a loss of agency and a psychological alienation from the entire mode of production.

The workers’ alienation from the output of their labor doesn’t vanish just because the state owns the means of production; rather, the “capitalist” elite is replaced by a political elite and a state-clerisy managerial class.

“Socialism” is simply another flavor of state-cartel capitalism; Orwell would be proud of all the simulacrum self-serving “socialists” who have managed to enrich themselves at the expense of those actually producing goods and services.

Calling state-cartel finance-capitalism “socialism” doesn’t make it socialist.Orwellian double-speak doesn’t change the neofeudal nature of debt-based state-cartel finance-capitalism.

Let’s boil it down to its essence: if the producers don’t directly own/control the output of their labor, it’s capitalism, not socialism. State ownership/ control is nothing but the state-cartel coin turned over.

The only truly socialist system would be comprised of worker-owned collectives and co-ops, and privately owned and operated small enterprises.

In a truly socialist system, global corporations would pay such high entry fees and taxes that they could not compete on price against local worker-owned collectives/ co-ops.

In a truly socialist system, state functionaries would be banned from accepting bribes, campaign contributions, seats on philantro-capitalist foundations, corporations, etc., and barred from taking jobs in corporations after leaving state employment.

In state-cartel economies, “socialist” or otherwise, the system optimizes corporate profits, influence and agency. In a truly socialist system, worker-owned collectives/ co-ops and small business are optimized and corporations are de-optimized.

The only way state-cartel “socialist” economies can prop up their vast spending is by inflating even vaster debt and housing bubbles via financialization— the exact same mechanism used in so-called “capitalist” economies to benefit the few at the expense of the many.

So-called “socialist” nations from China to Scandinavia are inflating monumental bubbles of debt to keep their delusions of sustainability aloft. I have covered China’s unprecedented expansion of debt many times; Acting Man does an admirable job of covering Scandinavian Bubbles in Overdrive.

Worker-owned and controlled enterprises don’t need to inflate-monopoly-capital financialization bubbles to stay afloat. Only state-cartel elite-run systems need to exploit financialization to keep from imploding.

Danish household debt to GDP is among the highest in the world: what’s “socialist” about debt bubbles?

“Socialist” countries like Denmark are practicing extreme financial repression: what is “socialist” about negative interest rates?

Why does “socialist” Sweden need to inflate one of the world’s most precarious housing bubbles? If “socialism” requires extremes of financialization to stay afloat– sorry folks, it isn’t socialism.

Here’s Norway’s M2 money supply. What’s remotely “socialist” about this staggering increase in elite-controlled money supply?

Last but not least, here’s SOE (state-owned enterprises) “socialist” China’s debt to GDP ratio.

As Marx anticipated, finance-capital would come to dominate industrial capital and the state. What we see in these charts is finance-capital running to extremes to keep the state-cartel version of capitalism from imploding.

When “socialist” states have to impose finance-capital extremes that even exceed the financialization of nominally capitalist economies, it gives the lie to their claims of “socialism.” The simulacrum “socialist” economies will implode with even greater force than the nominally capitalist economies, as a result of the same dynamic: state-cartel financialization is intrinsically unstable and unsustainable.

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  • Dr Mindbender

    And, what is Corporatism? Corporations owning government, like in today`s USA, which is the worst of all types of government.

    They all ( styles of government) end up being Crony, as today, US capitalism bails out Wall Street with Trillions of tax dollars in welfare, paid to billionaires, at the expense of the workers who`s Jobs they short sold to slave labor nations.

    I do not know where your thinking comes from, but US capitalism is the one blowing the MASSIVE debt bubbles, and it is because ,for decades, corporations have exported Jobs and denigrated labor rates, so that nobody can consume anymore! Issuing debt is all they can do to keep the corporations and economy alive.

    You must be one of those “who believes” if you cut your flesh for wall street than it will answer all your prayers and make your dreams come true? Pink Unicorns and Capitalist Dreams! Snake Oil.

    You got Trillions of Dollars in Illegal Wars, Trillions More in Welfare for Wall Street, and than Trillions more to Feed the Military! However, the citizens got their Jobs short sold to slave labor, while subsidizing corporate profit

    Wake up and Smell the Coffee!

  • ICFubar

    Smith is correct to the point he takes his discussion. In the early 1900s corporations were beginning to finance there own expanding production out of profits and for the banking cartel this would never do and over the next decade the bankers brought measures forward to make corporations again dependent on the banking fraternity. What we see as debt bubbles in socialist leaning nations is their inability to control the creation of money and credit which under private for profit banker’s control is all issued as debt. Lenin of Soviet fame complained bitterly of the banking fraternity’s ability to control the finances of the revolution with their control over the issuance of money and credit as debt. If bankers have total control of this omnipotent power to create money and control credit it matters not what the political system’s ‘ism’ is. The ‘ism’ just describes who gets paid or put another way who gets to appropriate the surplus. A nation, or group of, controlled by worker co-ops and small businesses would suffer the same dilemma if they were subject to banker’s control over the money supply and credit.This is why bankers have no political ideology other than the feudal nature that accompanies their ownership over money and credit which represents all the wealth and assets of this world. Fix this situation and then the comparison between capitalism and socialism would have some merit. Otherwise we are comparing one poisoned well to another. Why is this so hard to understand or are various economic theorist writers just being disingenuous?

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  • Zartan

    Simply, OPEN YOUR EYES, MAN!!!

    Look at the “TRILLIONS OF DOLLARS” Raining down in BOMBS on the POOR all over Gods Creation!
    CAN YOU Believe it, a 16-MILLION DOLLAR MOAB, ABOMINATION!! You know, had the military pulled that BS in Ancient China, the Emperor would have had the entire High Command Decimated and rightly so!

    Stop Being a SUCKER!

    STOP Believing Lies!

    The US Government gave, JUST GAVE, 20-Trillion to wall street, which is enough to cover several years of universal healthcare and basic income, alone! No Demonic Cries about Socialism on that one, I wonder why?


    US GOVERNMENT needs Trillions to FEED their “Corporate Government Army,” ( because it does not do a GD thing for the people) at taxpayers expense, but then, they WILL NEED TRILLIONS MORE TO REBUILD Nations they Destroy! The US government has plenty, but Corporate America is Hijacking and stealing it all for themselves, in Contracts, Entitlements, and Welfare for Bankers! The US is Still Blowing Trillions on QE “banker welfare” by its proxies! Not a Word from the Peanut Gallery though! No, they only “Shriek” when a Poor Homeless Person gets a Ham Sandwich!

    You people are disgusting!

    Stop Acting like YOU did something in life. You are all worthless numbers, and most will be destroyed by Government for Nothing! Stop acting, because you were programmed to learn these feelings of “entitlement and superiority” by government subliminal programs in your schools, commercials and cartoons!

    Stop Acting Spoiled … Because if you do not like Socialism: You do not Go to Heaven. God is a Socialist.

    Read the Story of Lazarus, because most of you are headed “SOUTH” with the Rich Man, because YOU will never be able to afford the Real Estate in Heaven.