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. 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.
It is also a pejorative term for government support of private-sector companies whose imminent collapse is perceived to threaten broader economic stability.
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.
Read more about Lemon Socialism: Origin, Other Languages, See Also
Famous quotes containing the words lemon and/or socialism:
“Where troubles melt like lemon drops, away above the chimney tops.”
—E.Y. Harburg (1898–1981)
“Hermann Goering, Joachim von Ribbentrop, Albert Speer, Walther Frank, Julius Streicher and Robert Ley did pass under my inspection and interrogation in 1945 but they only proved that National Socialism was a gangster interlude at a rather low order of mental capacity and with a surprisingly high incidence of alcoholism.”
—John Kenneth Galbraith (b. 1908)