05/07/2013 03:32 am ET | Updated Jul 06, 2013


We went to war with Germany, Italy and Japan on December 7, 1941 to defeat fascism. Most people would define fascism as a rigid social order that subjugates people to the dictates of an authoritarian government. That may be true in historical terms, but fascism is not that at all. Fascism is a theory of economic governance, and it could be practiced without rigid social sanctions. Fascism is subjugation of private commerce and private means of production to the will of the government, as opposed to communism in which the means of production is owned outright by the state.

WWII was a war over economic ideology as much as it was about personal liberty and the sovereignty of nations. Three distinct economic systems clashed in WWII and the ensuing Cold War, the authoritarian socialism of the USSR and the democratic socialism of the USA teamed up to defeat the spread of authoritarian fascism only to find that democratic and authoritarian socialism were at equal odds against each other in the end. Democratic socialism, ultimately, won. Democratic socialism was the socioeconomic model for post WWII nations, ultimately wearing down authoritarian socialism, from the end of WWII to the present. That socioeconomic order, the most successful in all of history, is now under renewed attack from a variant of the philosophy it went to war so long ago to subdue.

In market economics discussions, libertarians often cite what they call crony capitalism as an ill preventing true and free markets from operating in utopian precision for the mutual good. Crony capitalism is a perversion of the operation of pure free markets that occurs when government picks favorites in business. Such favor prevents free markets from operating the way they should, as a business favored by government has a distinct advantage over one that is not. Competition is stifled and markets are distorted in proportion to the power wielded by government presences. Otherwise, we'd all be content competing with each other on a perfectly fair field of commerce.

Crony capitalism does seem to be quite close to fascism in effect if not in stated principle. In principle, fascism dictates to business, business' goals and products and profits. In practice, fascism was a cozy mutually corrupting support system for political and commercial power. The world never saw true principled fascism just as it never saw true principled communism or even true principled libertarianism. The world has, frankly, always had crony capitalism. 19th century abuses by crony capitalism, in fact, set the stage for WWII. All three of the competing socioeconomic systems at issue in the war were calculated replacements for what had theretofore been a laissez faire crony capitalist world.

The abuses of crony capitalism have always been, and still are, that they work hardships on populations for the crony capitalist's own unearned profit. Those hardship lead to perceptions of injustice, social unrest, war and revolutions, all of which we could usefully do without. So far, the only practiced socioeconomic system and form of government that can resist the ravages of crony capitalism is democratic socialism. In a democratic socialism the will of the people is founded in their own personal welfare and metered at polling places every few years. The welfare of the people being essential to the existence of the state, a state that does not heed that will cannot expect to survive. On that footing, the power of business in a corrupt relation with government is balanced against the welfare of the people. That's why democratic socialism works where communism, fascism and laissez faire crony capitalism do not work.

A borderless global economy now introduces a new challenge to socioeconomic philosophers. Among myriad national governments, business is free to pick and choose government partners who are actually competing with other nations for a crony capitalist relationship with an international business. Of course to say nations are competing is not quite fair. Politicians are competing for a relationship with international businesses. What accrues to a politician from that relationship is funding, and therewith, political power.

All the while, the fact remains that the interest of business is nearly always adversarial to the interest of consumers and workers. Shoddy goods for higher prices coupled with lower wages makes for higher near term profits. Monopoly is the natural goal of business. The natural self interest of business makes for positively accelerating deflationary forces in both the global and local economies. That is why business needs to be regulated, because what is in the natural self interest of one business is not necessarily in the best interest of everyone else.

Crony capitalism is, in as few words possible, destructive of honest commerce and free markets by providing protections to business from the consequences of bad business. Since crony capitalism is indistinguishable from capitalism in all but the philosopher's mind, the consequences of practicing it lead to, have led to, rejection of the concept of capitalism.

Most nations regulate commerce. To the extent that the intent of that regulation is an honest and competent attempt to deter business practices that are harmful and dangerous to the public there is nothing wrong with regulation. To the extent that regulation is intended to advantage one business over another it is destructive and antithetical to the rationale of regulation in the first place.

International business can circumvent honest and competent regulation by picking the nations with the most favorable terms of profitability for their operation. By doing so, they create, on an international scale, the kind of economic duress for world populations that caused the rise of economic philosophies that proffered alternatives to capitalism in the first place. In essence, the freedoms of international business to ignore and circumvent the regulations on business that prevent crony capitalism now set the stage for the replay of the socioeconomic contest WWII was fought settle.

Fascism is quite close in effect to crony capitalism, favoring some business while ignoring or even persecuting others. International business seems on the verge of creating international fascism from the standpoint of socioeconomic effects and political power, whether intended or not. How that political power plays out might be foreshadowed by concerted efforts by the GOP in this country to place restrictions on the ability of democracy to right the socioeconomic ship. Socioeconomics is, after all, the study of the interrelation between economics and human behavior. In at least one instance that interaction led to global hot war.

What is so hard about figuring out a socioeconomic system that works?

Greed and human frailty.