Lemon socialism
Lemon socialism is a term for the practice in supposedly free market capitalist economies in which the government steps in to bail out or otherwise subsidize weak or failing firms.[1][2] A government attempting to transition from capitalism to socialism by this method takes control of the worst industries — the "lemons" — first, which undermines such an approach.[3]
It is also a pejorative term for government support of private-sector companies whose imminent collapse is perceived to threaten broader economic stability.[4][5]
It is not an actual subcategory of socialism per se; rather, it points to a corruption of free market capitalist systems, which would normally allow defective "Lemon" companies to fail. Government interventions earn the term when they involve infusions of government capital, as in bailouts, and include a degree of government control over company decision-making, as in nationalization.
The Emergency Economic Stabilization Act of 2008 in the United States has been cited as an example of lemon socialism.[6]
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[edit] Origin
Mark J. Green coined the exact phrase in a 1974 article discussing the utility company, Con Ed.[7][8]
The sentiment was earlier expressed in the adage "Socialism for the rich and capitalism for the poor", which was in use by the 1960s, and the notion of privatizing profits and socializing losses dates at least to 1834 and Andrew Jackson's closing of the Second Bank of the United States.
[edit] Other languages
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In Icelandic, lemon socialism is known as "Sósíalismi andskotans", meaning "the devil's socialism", a term coined by Vilmundur Jónsson (1889–1971, Iceland's Surgeon General) in the 1930s to criticize alleged crony capitalism in Landsbanki, which term has gained renewed currency in the debate over the 2008–2012 Icelandic financial crisis.[9] Lemon socialism, or more precisely crony capitalism, is also referred to as Pilsfaldakapítalismi, meaning "skirt capitalism", pilsfaldur being the hemline of the skirt, and the term referring to children hiding behind their mothers' skirts after having done something wrong, to criticize the alleged lack of transparency in dealings and reluctance to deal with bad consequences by themselves.
[edit] See also
[edit] References
- ^ Will, George F. (2008-09-29). "Bailout on Wheels". The Washington Post.
- ^ "The Bush Crisis Plan: Greatest transfer of wealth in world history". Pravda. 2008-09-24.
- ^ Hahnel, Robin (2005). Economic Justice and Democracy. Routledge. p. 116. ISBN 0-415-93344-7.
- ^ Green, Jonathon (1984). Newspeak: A Dictionary of Jargon. Routledge. p. 142. ISBN 0-7100-9685-2.
- ^ Shaw, Randy (2008-09-18). "The Return of “Lemon” Socialism". Beyond Chron.
- ^ Noah, Timothy (2008-09-30). "GOP, RIP? Nearly three decades of Republican dominance may be coming to an end". Slate.
- ^ Green, Mark J. (1974-05-26). Deciding On Utilities: Public or Private?; Con Ed Has Taken a Step That Makes It a Little of Each. The New York Times.
- ^ Krugman, Paul (2009-02-02). Lemon credit. The New York Times.
- ^ Icelandic banks 2008 in context, by Thorvaldur Gylfason, grandson of Vilmundur Jónsson
