Bottom-up or top-down government
Contrary to the statements of misinformed media gurus, congressmen and even some leaders in the executive branch, socialism ”“ the Marxian type ”“ disappeared in Europe along with the Berlin Wall and the collapse of the Soviet Union and its numerous Soviet Socialist Republics. There remain far-left political parties in some countries, like France and Italy, but they are mostly relegated to the fringes. Marxian socialism requires nationalization and state control of all major industries, limits on private property and individual enterprises
and usually one political party rule.
While I strongly disagree with both Obama Care and most of Dodd-Frank they are not socialism ”“ they are forms of social “welfarism.”
Social welfare was introduced in Europe in the mid-1870s by the Prussian Chancellor Otto von Bismarck. Bismarck needed to unify the 47 separate entities in the German Confederation into a single German nation in order to establish military, economic and political balance on the European continent. He was also seriously concerned about the growing strength of Marxism and Leninism, especially in Russia and more disturbingly within the trade union movements throughout Europe. His strategy was to give everyone cradle-to-grave security and defined stakeholding within the political system. He cut off the Marxists at the pass and gained the loyalty of most important elements of the business community and among the citizenry itself. Bismarck did not call his economic approach social welfare but the German laws do. The concept was also quickly adopted in Victorian England and soon spread to most European nations.
Sound too good to be true? Well, there was and remains a caveat. To gain lifelong security the individual citizen and citizenry in general must swear allegiance to the power and goals of the state. In political science we refer to this as top-down government. In the newly unified Germany, each citizen and his locally elected representatives were required to acknowledge the pre-eminence of the state, its Parliament and the kaiser as the leader of the country. Many current German authorities believe it was this first public accession to the power of the state that later allowed Adolf Hitler to move the top down even higher to one individual ”“ himself.
In almost every major European country the top-down approach is the governing system. In those countries government health and retirement programs are government controlled. Job-training institutions are also under government control. Even religious organizations and their leaders are paid by the state and funded by the church tax paid by every citizen, regardless of faith or none at all.
As Americans we most often agree with the fundamental rights of the individual and groups of individuals as guaranteed by the Constitution. Ours is a bottom-up political system. American individualism rose to seek and achieve our independence. If you ask people outside the U.S. what is the most noticeable American trait, the prevalent opinion is our independent individualism.
One major achievement of Bismarck”™s approach was and remains the loyalty of trade unions in Germany, Austria, Switzerland, Holland and Scandinavia to both capitalism and free enterprise. During my nearly 30 years living and working in Europe for both American and European companies I became and remain favorably impressed with the high level of professionalism within the trade-union leadership in these key countries. I even began to see the merits of codetermination in management decision-making. I have even observed union members rejecting a leadership-negotiated wage increase because it was not felt to be in the best interests of the company. In short, there is no longer real appeal for Marxism or Communism even in France, Italy and Spain.
However, the social welfare state concept is locked in and no European politician will ever suggest major changes.
We Americans face major choices. Do we want to create a government program providing cradle-to-grave security for all our citizens? Are we willing to give up our bottom-up approach to government in favor of top-down centralized planning and decision-making? Both Obama Care and Dodd-Frank require such a system. The current deliberations in Congress and at numerous statehouses are wrestling with these questions. It is clear the Democratic Party has moved and continues to move toward a more centralized top-down form of government. The decisions will be political, and, as the French say, “a votre choix!”
John Alan James, a management consultant, is a professor of management and corporate governance at the Lubin School of Business at Pace University. He also served as the first director of International Business and Economic Development for the state of Connecticut. Reach him at jjames@pace.edu.