Capitalists Criticize Obama for … Capitalism?

The silliness about Obama’s “socialism” and his deficient understanding of “Americanism” just keeps coming from the Romney campaign. In a recent Romney campaign conference call, Ohio businessman Kyle Koehler came up with this howler:

“It seems to me that the Obama America, there’s no risk but there’s plenty of reward. That’s called socialism to me.”

Never mind the mind-bending feat of imagination it takes to believe Obama — a man who’s arguably given big business more subsidies and monopoly protections than any president in the past century — is some sort of “socialist.”

More importantly, what Koehler describes is the very definition of American-style corporate capitalism — as American as apple pie and Swiss bank accounts. As far as I know, it’s certainly not any kind of “Kenyan Anti-Colonialism” Kwame Nkrumah would recognize.

Think about it. Just consider, one at a time, the major industries in the American — and global — corporate economy.

Software, entertainment, biotech and pharma are the dominant players in the global economy, all of them heavily dependent on draconian “intellectual property” law — law which the Obama administration, and particularly Joe Biden, have obsessively fixated on strengthening — as their main source of profit. Biotech and pharma, in particular, are dependent on large-scale subsidies to R&D.

Agribusiness is dependent not only on massive domestic subsidies in the U.S. (can you think of an easier real estate investment than owning land you get paid to not grow stuff on?), but on large-scale foreign intervention by the U.S. government. This intervention takes the direct form of a century of gunboat diplomacy and filibustering to make the world safe for landed oligarchs. It takes both the direct form of neoliberal trade policy and the indirect form of World Bank and IMF policy aimed at coercing Third World countries into “export-oriented development” (i.e. helping states transfer land from the people who work it to the landed oligarchs who collect rent on it, so they can collude with transnational agribusiness in producing cash crops for export).

The modern electronics industry, and a major portion of other forms of manufacturing as well, were originally offshoots of the military economy. By far the majority of electronics R&D during and after WWII, through the 1960s, was funded with “Defense” Department money. Microminiaturized electronics were introduced almost entirely in the original context of military technology. Electronics in particular and industrial technology in general are heavily dependent on patent law. And the military economy, with its hundreds of billions of dollars spent on procurement, absorbs a considerable portion of total idle capacity in the industrial economy.

Offshoring, in which actual manufacturing is carried out by independent sweatshops in Third World countries but the goods are sold under American trademarks, depends heavily on American muscle to enforce “intellectual property.” But it also depends on large-scale subsidies to the actual transportation and utility infrastructure without which profitably offshoring production would be impossible. Such infrastructure funding was the main purpose of foreign aid and World Bank loans in the postwar decades.

Every major industry is characterized by an oligopoly, in which most of the market is controlled by a handful of producers. Prices in such markets tend to be sticky, following a punctuated equilbrium of brief price wars followed by long periods of administered prices and tacit collusion via the price leader system. In industries where this oligopoly structure exists, it probably adds a 20% markup to the retail price of goods. And it exists in large part because of regulatory cartels — including the pooling and exchange of patents — enforced by the state.

If this is all “socialism,” it’s the kind of “socialism” mocked by Noam Chomsky as “socialism for the rich and free enterprise for the rest of us” — in which the state “socializes” risk and cost to the taxpayers, while “privatizing” profit to big business.

Any American capitalist who complains — with a straight face — about “no risk” and “plenty of reward” for business, deserves an Oscar.

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