Still Fighting the Last War Against Socialism

George Orwell pointed out that one of the first casualties of socialism is language. The damage is not collateral, it is deliberate—designed to numb minds and render critical thought difficult or impossible. The instrument of this dumbing down in Nineteen Eighty-Four was Newspeak, the official language of the English Socialist Party (Ingsoc). Newspeak was a sort of totalitarian Esperanto that sought gradually to diminish the range of what was thinkable by eliminating, contracting, and manufacturing words. New words had a “political implication” and “were intended to impose a desirable mental attitude upon the person using them.” The meaning of words was often reversed, as was most starkly emphasized in the key slogans of Ingsoc:

WAR IS PEACE

FREEDOM IS SLAVERY

IGNORANCE IS STRENGTH

Nineteen Eighty-Four was written in 1949. Its nightmarish fictional world is now thirty-six years in the past, so one might reasonably conclude that Orwell was far too pessimistic, but his great book was less a prediction than a warning, and above all an analysis of the totalitarian mentality. Meanwhile, there is another significant date in Nineteen Eighty-Four. The book’s appendix on the principles of Newspeak stressed that the corruption of language was a multigenerational project whose fruition would not come until well into the present century. Ingsoc’s objective was to render independent thought impossible by “about 2050.”

Intriguingly, that is the same year that the world allegedly has to become “carbon neutral,” or “net zero,” to avoid climate Armaggedon.

Twenty fifty has become a key date for the UN’s “global governance” agenda, which seeks nothing less than to oversee and regulate every aspect of life on the basis of a suite of alarmist projections. The main existential threat is claimed to be catastrophic manmade climate change. “Climate governance” has thus emerged as the “fourth pillar,” of the UN’s mandate, joining peace and security, development, and human rights. So far—as with the other three pillars—the UN’s climate efforts have been spectacularly unsuccessful. It has held enormous “Conferences of the Parties,” or COPs, which have promoted a morass of uncoordinated national policies that have had zero impact on the climate. COP 21 in Paris in 2015, for instance, was meant to hatch a successor to the failed Kyoto Agreement. But all it produced was a raft of hypocritical, voluntary, fingers-crossed “Nationally Determined Contributions.” The failure of Paris, and of temperatures to rise in line with flawed models, led to a doubling down of “ambitions.” One new commitment that seeped out of Paris was for the countries of the world to hold temperatures to 1.5 degrees Celsius above levels before the Industrial Revolution (the Original Climate Sin). Staying below that level, UN policy wonks rapidly calculated, would require the world to become carbon neutral, or net zero, by 2050.

In fact, there is no climate “crisis” or “emergency.” However, as Orwell noted, the language of fear and panic is one of the main instruments of political control.

Today, just as in Nineteen Eighty-Four, the classical liberal concepts of liberty and equality (of opportunity) are under relentless attack, as are the values of reason and objectivity. Liberty and equality were classified in Newspeak as “Crimethink.” Objectivity and rationalism were “Oldthink.” A doomed Newspeak lexicographer named Syme tells the book’s equally doomed hero, Winston Smith, that even the party slogans will eventually become incomprehensible: “How could you have a slogan like ‘freedom is slavery’ when the concept of freedom has been abolished?”

Orwell was hardly the first observer to point to the political dangers of linguistic manipulation, which go back to discussions of sophistry in Plato. The great economist and philosopher Friedrich Hayek pointed in particular to the Left’s use of “social.” He dubbed it a “weasel word” that not merely sucked meaning from words to which it was attached but often reversed meaning. Thus, by classical liberal standards, social democracy is undemocratic, social justice is unjust, and a social market economy is antimarket. We have a prime current example in the phrase “social license to operate,” which in fact means a potential veto on corporate activities by radical nongovernmental organizations (NGOs), the stormtroopers of the global governance agenda. Private corporations were once socialism’s enemies; now they have been co-opted as its partners, agents of “global salvationism.” Nobel economist Milton Freidman pointed to the subversive, open-ended nature of “corporate social responsibility,” where “responsibility” represents another weasel word. CSR’s purpose is to force corporate executives to abandon their responsibility to their shareholders in favor of an endless list of “stakeholder” demands.

Perhaps the most significant new weasel word to have emerged from the UN’s equivalent of the Ministry of Truth is “sustainable.” Commitment to sustainability is now mouthed by every politician, bureaucrat, marketing executive, and media hack on earth. It sounds so benign, so reasonable, but what it actually means is “bureaucratically controlled and NGO-enforced within a UN-based socialist agenda.”

Like “social,” “sustainable” tends to vitiate or reverse the meaning of words to which it is attached. Thus sustainable development is development retarded by top-down control and whose effectiveness is further compromised by the insertion of a long list of cart-before-the-horse social policy objectives, from gender equity to “responsible consumption.”

Recently, “sustainable finance” has also bubbled up from the UN verbal swamp. What it means, not surprisingly, is stopping the financing of fossil fuels by browbeating banks and investors and rigging the regulatory process.

There are no dictionaries of sustainable Newspeak. Its mavens rely less on new words than on perverting or reversing the meaning of old ones. One recent clarion call heard echoing around the corridors of power is that recovery from the covid crisis must be “resilient.” Insofar as that means forcing the use of more expensive, less reliable, and less flexible energy sources such as wind and solar, it will inevitably make economies less resilient. Thus it promotes the first energy “transition” in history that involves moving backward. Typically, such backward movement is a key part of a “progressive” agenda.

The indoctrination of young people was a key strategy of Ingsoc. Likewise, Agenda 21, the doorstop socialist wish list that emerged from the UN’s Earth Summit at Rio in 1992, declared: “Students should be taught about the environment and sustainable development throughout their schooling.” They should learn that “The world is confronted with worsening poverty, hunger, ill health, illiteracy, and the continuing deterioration of ecosystems on which we depend for our wellbeing.” In other words, a catalogue of alarmism that has—or should have been—utterly discredited by the evidence of the intervening decades. However, we tend to see what we have been taught to believe. Walls may have ears but more important is that ears have walls. Building such walls was the specific purpose of Ingsoc’s Crimestop, or “protective stupidity.” The capture of academic institutions has virtually installed Crimestop as a compulsory course.

Meanwhile, not only did Agenda 21 demand that children be indoctrinated, it demanded that the most indoctrinated among them be allowed into political fora to lecture their elders. This programme came to stunning fruition last fall at the UN, when Greta Thunberg, a bright, anxious, and thoroughly indoctrinated Swedish teenager, was elevated to the podium to paraphrase Agenda 21: “People are suffering. People are dying. Entire ecosystems are collapsing. We are in the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth. How dare you!”

One is reminded of the Newspeak appendix: “A Party member called upon to make a political or ethical judgement should be able to spray forth the correct opinions as automatically as a machine gun spraying forth bullets.”

Meanwhile, the political establishment’s current watchwords of inclusivity, diversity, and equity are all aimed at perverting truth and concealing real meanings. Inclusivity and diversity involve excluding white men and conservatives of either sex (although it is a “thoughtcrime” to suggest that there are fundamentally two sexes, as J.K. Rowling discovered). Equity falsely equates the inevitable inequality of outcomes in a free society with moral inequity.

Through all of this, the concept of doublethink, that is, effortlessly holding incompatible beliefs, spreads apace. Orwell wrote that “Doublethink lies at the very heart of Ingsoc, since the essential act of the Party is to use conscious deception while retaining the firmness of purpose that goes with complete honesty.”

Keep that in mind the next time a public figure cites the climate emergency, intones the existential necessity of sustainable development and sustainable finance, and trumpets the job-creating benefits of a resilient recovery and a transformative green transition to a net zero future.

This article first appeared in a longer form at Law&Liberty.

What happened to the trillions of dollars allocated for the CARES Act emergency lending facilities? In a statement he gave to the US Senate on Tuesday, and one of his last public statements for the year, Federal Reserve chair Jerome Powell honored Secretary Mnuchin’s request to terminate five of the lending programs, confirming:

the Federal Reserve will return the unused portion of funds allocated to the lending programs that are backstopped by the CARES Act in connection with their termination at the end of this year. 

Powell then provided a statement on each of the programs and how much of the funds have been used:

The Main Street Lending Program allows up to $600 billion in loans granted to small to medium size businesses (and nonprofits), an amount nearly the size of the initial Troubled Asset Relief Program during the Great Recession! As of November 25, nearly:

600 lenders representing more than half of U.S. banking assets have registered to participate in the program, and the program has purchased just under $6 billion in participations.

The Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF) hold $75 billion to purchase bonds directly from business in the primary market, or on the exchange in the secondary market. Surprisingly:

there have not been any PMCCF transactions, nor have any indications of interest been received. While the PMCCF has not purchased any bonds since it opened.

As for the SMCCF, the value of the corporate bonds and corporate exchange traded funds now stands at $13.6 billion.

The Municipal Liquidity Facility could have purchased an astounding $500 billion in state and local debt. But so far only two issuances have been made, for a total of $1.7 billion.

The last of the five, soon to be discontinued, programs is the Term Asset-Backed Securities Loan Facility, able to provide up to $100 billion in loans for those who own student loans, credit card debt, and auto loans. These debts are not normally owned by most people on “main street.” Nonetheless, only $3.8 billion of loans have been granted.

To date, the five programs lent out a total of $25.1 billion, of what could have been $1.275 trillion of support programs. And while it is 2020, and the anticapitalism mentality remains strong, we should feel lucky that “only” $25.1 billion was created to buy assets such as corporate bonds. If the programs were fully utilized, an extra trillion dollars would have been added to the money supply, the ends for which we’d never know.

Now, imagine if $500 billion was given to buy state, city, and local debt across the country. Perhaps the money would have gone to build a bridge or road, or maybe just to pay salaries or pensions. Regardless, we must be reminded it all amounts to collectivist decision-making; decisions by the few on the behalf of the many. Whether or not the money is used is not as unsettling as the fact these individuals have the power to create and spend unfathomable sums of money in the first place.

While it could have been worse, it’s still not good. As Chair Powell praised the Fed’s action because they:

helped unlock almost $2 trillion of funding to support businesses large and small, nonprofits, and state and local governments since April.

He doesn’t reconcile this amount. But it likely includes some $525 billion of forgivable loans from the Paycheck Protection Program, some of which went to Congress and their family members, as reported by the Washington Post; nor does he mention the $3 billion increase to the Fed’s balance sheet, now standing at over $7.2 trillion.

As December begins and the year soon ends, the Fed’s actions have led to many more trillions of dollars injected into the economy, allocated to some and circulated in ways we’ll never know. The central planners and mainstream media appear content, with a covid vaccine on its way, the stock market making new highs and a likely transition in the White House. Of course, we’re in uncharted territory with no escape plan. The problem with inflationism is that is must never end, while the magnitude of the next stimulus, increase to money supply and support programs must now only accelerate.

Listen to the Audio Mises Wire version of this article.

Libertarians often wonder why socialism continues to be so popular, even though it has proved to be such a failure as a political ideology and as an economic system. Though a public education system and a biased mainstream media are key reasons for this, the stubborn resiliency of socialism is also somewhat fictitious since socialism has evolved: the socialist of yesteryear is not the socialist of today. This distinction is important to remember when setting the themes for a libertarian education. 

The difference between the traditional and the modern socialist corresponds to the distinction that Ludwig von Mises discerningly made between socialism and state intervention in the free market. The traditional socialists, of direct Marxist inspiration, have almost disappeared today, as one socialist experiment after another failed during the twentieth century as well as in our times. No one calling himself a socialist or a "progressive" today believes that the state’s ownership of the means of production is the best way to organize society. No modern socialist or "leftist" condones the socialist state’s typical political oppression and economic suffocation of society. 

But the modern socialist still turns a blind eye to the overwhelming evidence showing that the free market is the greatest creator of wealth in history, even when it is hobbled by state intervention. She/he still refuses to accept that billions of people have been brought out of poverty by capitalism—though a hampered version of it—and that hundreds of millions of people have joined the middle class thanks to the liberalization of international trade and the opening up of large swaths of developing economies.

The modern socialist is therefore a paradoxical creature; he both accepts and rejects the free market. To believe in free markets in some cases but not in others is an ambiguous ideological position; one that seems intellectually untenable and that at least ought to be defended. But modern socialists generally do not address directly this intellectual incoherence. Rather, they usually claim that the free market works to some extent, and that it must be limited and controlled. They are convinced that the state must play a fundamental role in society, to protect the "workers" against "unbridled" capitalism that will otherwise not only continue to oppress them, but even destroy civilization itself.

Modern socialists include leftists and progressives, but also mainstream social democrats and standard liberal elites, as well as many right-wingers, and those conservatives who have abandoned classic liberalism in order to adapt to the times. They represent a very large and heterogeneous majority of the population, but they have one thing in the common: their trust in the state. Following Mises’ dichotomy above, modern socialists can thus also be called "statists". As the name implies, statists believe that the state should intervene in the market to correct its many perceived excesses and provide a regulatory framework without which, they are convinced, it would run amok. Large areas of the economy (like education or healthcare) should be brought under state control, if they aren’t already. The sectors that can be left in private hands must, in their view, nevertheless be regulated by the state and protected, if needed, by subsidies, tariffs, and other kinds of wealth transfers. Statists often believe, though they might not always admit it openly, that "inappropriate" social and cultural values, such as consumerism or conservatism, be choked by the state.

The popularity of such ideas has had very serious economic, political and social consequences over the last decades. Most statists mean well, but they have been inculcated with an ideology that is based on erroneous convictions, misunderstandings, and frankly, ignorance. Perhaps the most fundamental mistake that statists make is how they define "capitalism". What they call "capitalism" is really "state capitalism." This is capitalism as corporatism, with its inevitable cronyism, artificial monopolies, vested interests and regulatory capture, which libertarians have long criticized as the inevitable outcome when the state gets involved in the economic life of society. In other words, what many confused statists think is "unfettered" capitalism, is actually free market capitalism that is fettered to the state. They confuse cause and effect, since it is their statist ideas that in the first place have created the political and economic conditions that they now criticize. Put in another way, they are convinced that the state must intervene in society to correct problems for which it is largely itself responsible.

Most statists are not aware of this contradiction, nor the nefarious consequences of their political beliefs. This is inevitable since they haven’t learned how the unhampered market economy works and the myriad ways in which state intervention distorts it. They are simply followers of the modern socialist ideas and "progressive" values that they have received from their schools and universities, from the media, and often unwittingly, from family and friends. The overwhelming majority of the population has unfortunately never been introduced to libertarianism, and therefore do not have the conceptual tools to understand why this statist conventional wisdom is wrong.

There is thus a screaming need for a different kind of education—a libertarian education. It is the education in the economic and political pillars of libertarianism; respectively, Austrian economics and natural law. It might seem presumptuous, and even condescending, to suggest that modern socialists need to be educated. It would indeed seem presumptuous to propose an alternative education to the majority if modern society were free, peaceful, harmonious and affluent. But this is not the case, as most statists immediately acknowledge. Further, libertarians are humbled by the fact that most of them were themselves statists, before they also received the same education in liberty. Incidentally, this is why libertarians understand statists so well, while the reverse is almost never the case.

When setting the curriculum for this libertarian education, the distinction between traditional and modern socialists is relevant. Since modern socialists interpret and express "socialism" differently compared to traditional socialists, the education needed to convince statists of the foolishness of their political and economic ideas cannot be the same as the one used in the past. Traditional socialists needed to be educated first and foremost in the disastrous consequences of central planning, the definition of freedom, and the essential role of prices in society. This is why they needed to understand Böhm-Bawerk’s early critique of Marxism, Mises’ critique of socialist economic calculation, Hayek’s warning against collectivism and his theory of the use of knowledge in society.

That education, though still important, is not as essential as it used to be, since modern socialists have already implicitly learned these lessons. They realize that Marx’s theory of surplus value is flawed, that a centrally planned economy and the attempt to abolish private property will eventually lead to the collapse of society. What statist do need to be educated about are the causes and consequences of the state’s intervention in a free society. The education of the modern socialist should thus include such key concepts as the Cantillon effect of inflation, Say’s law of production, Bastiat’s broken window fallacy, Rothbard’s analysis of the state, and Hoppe’s critique of taxation.

These libertarian concepts are essential to understanding why a highly regulated and tax-financed state capitalist society becomes unsustainable and unstable over the long term, inevitably embarking on an economic, political and cultural decline. A libertarian education is essential for reversing this trend, by teaching the younger generations that modern socialism is inherently decadent, as individual savings decrease, family values weaken, personal responsibility evaporates, rent seekers multiply, and trust in politicians plummet. All of these outcomes are predictable consequences of modern socialism.

The moral and financial bankruptcy of the current political and economic system, and with it the nagging feeling that this system has now come to the end of the road, can make many statists receptive to the answers that libertarianism provides. The education of the modern socialist should also be a simpler task than converting a traditional socialist to libertarianism. The latter often had a solid ideological framework based on the writings of Hegel, Marx, Engels and Lenin. But most modern socialists have never read these authors and are at best only vaguely familiar with their ideas. Statists have no real ideology to speak of; their political beliefs are usually based more on emotions than principles. A typical example is when the mandatory payment of taxes is smugly construed as an act of "solidarity."

The libertarian education of the modern socialist must therefore also include morality. It needs statists to become convinced that adopting libertarianism will make them feel good about themselves. If they embark on this education with an open mind, if they take the time to truly understand the political and economic insights of libertarianism, they will find that free market capitalism, properly understood, leads to most peaceful, stable and just society.