21st Century Socialism and the War on (Small) Business

When I wrote about the “war on business,” some commenters dismissed this, saying profits have been strong, while it’s middle class jobholders who are hurting. True, up to a point. Big, established corporations, that can work the political system, and get government subsidies and protection against competitors, are indeed doing well. But smaller, newer firms face ever mounting obstacles. They’re tied in knots by complex regulatory schemes like Sarbanes-Oxley and Dodd-Frank (which big firms can cope with). And we get roughly all our net job growth from small businesses. If they’re struggling, and big firms needn’t compete with them for labor, no wonder worker pay is anemic.

California is a poster-boy for the war on (small) business. While the Silicon Valley scene is humming, because those firms gotta be there, many other companies are fleeing (or not starting). Exemplifying California’s business landscape is CEQA, an environmental review law that allows anybody to sue to stall any project. So if you want to open a new gas station, one nearby can sue to block you. Anybody with a financial motive can hold any project hostage by threatening to sue under CEQA, to extract concessions. Labor unions do this all the time. A recent issue of The Economist quoted a California observer about the state’s attitude toward business: “fuck you, fuck you, fuck you, fuck you, fuck you, and fuck you.”

But California is a business paradise compared to Venezuela, which the late President Hugo Chavez brayingly set on a path to “Twenty-first Century Socialism.” Among Venezuela’s “worker’s protection” laws is one effectively making it impossible for a business to fire anybody. There’s always the law of unintended consequences, but here the consequences are entirely predictable: workers who can’t be fired don’t work very hard. Or, for that matter, at all; absenteeism is rampant. Firms have to bribe employees to leave. And meantime the government laments sagging productivity!

You might think such “worker protections” applicable to the private sector would also cover government workers. Don’t be silly. Typical of authoritarian “socialist” regimes, in the Venezuelan worker’s paradise government workers have almost no rights at all, can be fired peremptorily (better stay politically correct), and don’t even think about organizing a strike or protest because they’ll throw your ass in jail.

Venezuela’s disaster may be approaching a climax, as the dysfunction of its “Twenty-first Century Socialism” wrecks the country. The regime, blinded by its twisted ideology, responds with even more counterproductive policies. I’m almost sorry Hugo Chavez didn’t live to see the denouement.

Socialism might be benign if people were angels. But they are not, power corrupts, and giving government so much economic and social power is a very bad idea. Twenty-first Century socialism isn’t any upgrade on the Twentieth Century version.

Yet lefties enjoy making mock of righties for throwing around the word “socialism,” as though it’s a bogeyman either imaginary or harmless. I recently heard a re-broadcast interview with the late Pete Seeger, the folk singer who never really repented his Communist past, nor ever let a cross word pass his lips about any “socialist” regime (like Castro’s). The word “socialism” came up, with the usual sniggers, and Seeger said (paraphrasing), You know, the Post Office is a totally socialist thing, it’s textbook socialism, entirely owned and run by government; and of course everybody loves it.

Then Seeger surprised me by adding: But you know, no government-run post office in the world ever thought up anything like Federal Express; it took the private sector to come up with it; such innovation just isn’t in the DNA of a stodgy government bureaucracy.

Tags: business