Hawaii practices its
own brand of socialism

Forbes magazine was right;
Hawaii comes close to being socialist state

The June 16 Forbes magazine article that labels Hawaii a socialist state is pretty close to reality. It certainly is socialist in comparison to all others I have studied in the United States.

Centralized government and planning are more pronounced here than in other parts of the nation and perhaps equal to some "socialist" countries -- especially through the mode of regulation and permitting. But outright central planning or determination of what will and will not be produced in the state has often emerged in policy. This cannot be found easily in the rest of the nation.

One of the reasons Hawaii businesses have experienced this since the political revolution of the '50s is that said revolution put in place two powerful governments in each county:

1) The state government, which enters into the affairs of the city and county in a way found nowhere else in the nation. What state has ever focused on how one of its city sections will be designed or dictated where a convention center would be created and placed?

2) County government, whose power lies primarily in blocking what it can of state plans until all parties are clear about who's in charge. This is why counties are usually viewed by local businesses here as the negative force in getting things done.

This is a condition aptly labeled Hawaiian ping-pong, as I cannot see its equal in other states.

Oahu is, of course, the most severely hampered by this double government. Both players claim almost identical constituencies and neither will get out of the way of the other. The Forbes article does not take this tack; but it is for this reason, I believe, that the one-party system in the state is more hegemonic and dominating than simple policy or ideology would indicate.

Certainly it is no secret that important political appointments and even elected candidates are selected by union agreements. This, and the manner in which organized government workers shape elections and policy, raises an element of control that would be hard to duplicate in any other state.

Whether it is the tone of the Supreme Court or the tone of the legislation to which it must hold in its decision on privatization of public services, what now will occur at Kawaihae Harbor on the Big Island is the employment of 27 public workers to achieve what eight private employees had done until last week.

The result is only one of many of the elements that go into making Hawaii an expensive place in which to live and do business. It is possible that this fact, reflected ultimately in degradation of the state's public debt rating (like collapse of Soviet bonds), brings the process to a halt.

However, with an open political system in law (if not entirely in fact), correction of financially unsustainable practices will be partially corrected eventually. Much more job loss and tax burden is likely to come first, nevertheless.

Perhaps the most powerful element of central planning and direction comes from Hawaii's uniquely bureaucratic system. It is very Oriental in practice. It is usually literal and does not overstep "kuleana" in assistance or advice. I believe that its posts are widely used as positions of power rather than facilitation as characterizes most other states.

There are wonderful and gracious exceptions, but on the whole, this state's bureaucracy believes that it must restrain (or direct) business. This is not one of the bases of a free-market system.

Finally, I believe that the article is only partially wrong in comparing Hawaii's per capita state tax burden with California (due to a dissimilar mix of state and county taxes), but the burden is still higher here.

The state's system is regressive and clearly hits low-income residents proportionately higher -- an attribute not thought to be socialist, but one that has been proven to be the case wherever socialist states have existed.

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David Lawrence Ramsour,
a Honolulu consulting economist, is former chief
economist for Bank of Hawaii. The opinions in Other Views
columns are the authors' and are not necessarily
shared by the Star-Bulletin.