Bondholders? Never heard of ’em until this whole recession and economic uncertainty stuff began happening. 8 years into the recession they dare not call a depression (think it’s bad for market confidence, or something like that) you’d want to be stuck in a cave on a desert island not to have heard of these bondholders. Ubiquitous … that’s a good word for them. Before we proceed, just a quick summary anyway: in the world of public finance a government issues bonds which are bought up by bondholders. Governments pay interest on the bond for a certain period of time and then pays the bond in full when it ‘matures.’ And no, I don’t understand why we have such a crazy financial system.
The world might be Alice in Wonderland but it’s not totally senseless. Metaphors are everywhere. There is a good metaphor lurking in this whole bondholder malarkey despite the absurdity of the whole process. The lesson is this: a body sets up something which has a net benefit to another body, the latter body really being in control. The ‘alien’ body profits in small ways over an extended period of time and then cashes in more profitably and in full at a date somewhere down the line.
This metaphor came to mind recently when hearing that the Communist Party of the USA endorsed Hilary Clinton for US President – the same lads also seem mightily chuffed with Barack Obama. Clinton will speed the way towards a democratic and egalitarian America, they tell us. She’s the heiress to the Obama legacy, which makes her Nobama 2.1 for some.
Two things first of all; (1) in the US, the CPUSA has no power. They do get coverage, however. Then again so do the KKK and so would a party extolling the Divine right of kings, regardless of their political base. CPUSA are news because they are quirky. (2) I am not about to draw links between Obama or Clinton and Communism because I don’t believe such links are strong, or at least not consciously so.
So, back to the bondholder metaphor. The hypothesis I have is that liberalism is socialism in slow-motion. Socialism is the bondholder of liberalism. It forces it to issue democratic and egalitarian principles over time. Then, at a later date, there is little difference between an evolved liberal polity and a revolutionary socialism. Socialism has ‘cashed in.’*
To understand this, we have to understand socialism and liberalism. Both aim at the same ideal; they ultimately want to liberate people. They are both universalist and they both want a world where religion, nationalism, tribe and family are merely nuisances as opposed to being elemental to politics. They both conceive life in economic terms – humans are essentiallty hedonistic. They are both materialistic. They both have faith that society can be run on scientific lines. And … and maybe this is the most important … they subscribe to the view that people are inherently good and know what they want for themselves. Human nature is at the core of any political ideology and the anthropological presupposition of both liberalism and socialism is key.
Philosophically the main difference is one of epistemology. Liberals are less certain about the ability to know things in a completely objective manner. They are somewhat similar to conservatives in this regard.
The other main difference – and this is relevant for practical purposes – is that liberals are more incrementalist, preferring a ‘softly, softly approach.’
Yet the telos of liberalism is towards socialism, no matter how incrementalist. This became abundantly clear in the 2nd quarter of the 20th century when Keynesianism first took root in the West. Hayek, in his classic The Road to Serfdom, was astute enough to observe this. The Allies had fought a war against National Socialism and immediately became enemies of the Communists. Yet they essentially built a road-map to a socialist State by implementing a welfarist bureaucracy guaranteeing security from the cradle to the grave. The other side of this promise was that all differences would have to be levelled, the power of the State would have to grow, personal freedom would contract. In other words there would be stepping stones to socialism. Liberalism effectively became a debtor to socialism, losing more and more control. Hayek was proved right.
And so we are where we are. Full-blown socialism is fully embedded in many countries in Europe. In America it is on its way and the CPUSA know it. And anyone who advocates liberalism really should know that the day will come when the ideological bond of socialism will mature. When critiquing liberalism we have to not only look at its short-term promises but its assumptions and long term aims. Otherwise we will be socialised … albeit incrementally!
*This is the crux of the dispute between socialists who advocate a ‘dictatorship of the proletariat.’ Some say it has to be a true dictatorship, others say that it can be a ‘hidden’ dictatorship, achieved through the ballot box.