Lemon socialism
Encyclopedia
"Lemon socialism" is a pejorative term for government
support of private-sector companies whose imminent collapse is perceived to threaten broader economic stability
. Some assert it is not a subcategory of socialism
per se; rather, it points to a corruption of free-market capitalist systems
, which would normally allow defective companies ("lemons
") to fail. The most common government interventions that earn the term involve infusions of government
capital
, as in bailouts, and may include some 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.
believes that he coined the phrase in a 1974 article discussing the utility company, Con Ed. However, the sentiment was 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
.
, 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 2008–2011 Icelandic financial crisis.
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.
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
support of private-sector companies whose imminent collapse is perceived to threaten broader economic stability
Economic stability
Economic stability refers to an absence of excessive fluctuations in the macroeconomy. An economy with fairly constant output growth and low and stable inflation would be considered economically stable. An economy with frequent large recessions, a pronounced business cycle, very high or variable...
. Some assert it is not a subcategory of socialism
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
per se; rather, it points to a corruption of free-market capitalist systems
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
, which would normally allow defective companies ("lemons
Lemon (automobile)
A lemon is a car, often new, that is found to be defective only after it has been bought. Any vehicle with numerous, severe issues can be termed a "lemon", and, by extension, any product with flaws too great or severe to serve its purpose can be described as a "lemon".-Origin:The use of the word...
") to fail. The most common government interventions that earn the term involve infusions of government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
, as in bailouts, and may include some government control over company decision-making, as in nationalization
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
.
The Emergency Economic Stabilization Act of 2008
Emergency Economic Stabilization Act of 2008
The Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008 (Division A of , commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the subprime mortgage crisis...
in the United States has been cited as an example of lemon socialism.
Origin
Mark J. GreenMark J. Green
Mark J. Green is an author, public interest lawyer and a Democratic politician who lives in New York City. He worked with Ralph Nader from 1970-1980, eventually as director of Public Citizen's Congress Watch, and is also the former president of Air America Radio .He was New York City Consumer...
believes that he coined the phrase in a 1974 article discussing the utility company, Con Ed. However, the sentiment was expressed in the adage “Socialism for the rich and capitalism for the poor
Socialism for the rich and capitalism for the poor
Socialism for the rich and capitalism for the poor is a classical political-economic argument, stating that in the advanced capitalist societies state policies assure that more resources flow to the rich than to the poor, for example in form of transfer payments...
”, which was in use by the 1960s, and the notion of privatizing profits and socializing losses
Privatizing profits and socializing losses
In political discourse, the phrase "privatizing profits and socializing losses" refers to any instance of speculators benefitting from profits, but not taking losses, by pushing the losses onto society at large, particularly via the government....
dates at least to 1834 and Andrew Jackson
Andrew Jackson
Andrew Jackson was the seventh President of the United States . Based in frontier Tennessee, Jackson was a politician and army general who defeated the Creek Indians at the Battle of Horseshoe Bend , and the British at the Battle of New Orleans...
's closing of the Second Bank of the United States
Second Bank of the United States
The Second Bank of the United States was chartered in 1816, five years after the First Bank of the United States lost its own charter. The Second Bank of the United States was initially headquartered in Carpenters' Hall, Philadelphia, the same as the First Bank, and had branches throughout the...
.
Other languages
In IcelandicIcelandic language
Icelandic is a North Germanic language, the main language of Iceland. Its closest relative is Faroese.Icelandic is an Indo-European language belonging to the North Germanic or Nordic branch of the Germanic languages. Historically, it was the westernmost of the Indo-European languages prior to the...
, 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
Crony capitalism
Crony capitalism is a term describing a capitalist economy in which success in business depends on close relationships between business people and government officials...
in Landsbanki
Landsbanki
Landsbanki, also commonly known as Landsbankinn in Iceland, is a private Icelandic bank with international operations...
, which term has gained renewed currency in the debate over the 2008–2011 Icelandic financial crisis.
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.