Economic Fascism Marches On

Reporting on a February 9 Business Week article by Pete Engardio on “State Capitalism,” the National Center for Policy Analysis summarizes:

Across the United States, state governments are crafting economic strategies that blur the boundaries between the public and private sectors.  They are targeting specific industries and intervening in ways that go far beyond traditional perks like tax breaks and cheap land.

The article gives many examples of government venture funds, R&D consortiums, and other so-called public-private partnerships now operating or about to begin.

States have always engaged in such activities to some extent, although a public revulsion against them curtailed them to some extent in the wake of the debacle of the late 1830s and early 1840s, when some states revised their constitutions to forbid or constrain such undertakings. Recently, however, the states, like all other levels of government in the United States, have launched into public-private partnerships with unprecedented vigor and funding.

These partnerships, which epitomize economic fascism, promise to waste resources on a wide front. The idea that politicians and politically appointed “experts,” in league with rent-seeking businessmen, can allocate resources more effectively than the private capital markets is a characteristic form of the folly that is leading our generation to march over the same cliff that our forebears marched over in the 1930s. Each step in this direction moves us farther from economic liberty and closer to the complete politicization of economic life—a trend that recent de facto or de jure government takeovers of large banks and other financial firms are already accelerating.