Free Markets, Free People

Guess what TIME blames for what it sees as America’s decline?

My guess is most of us would agree that America seems to be in decline, but not for the reasons TIME magazine does.  Much of the decline is centered in the politics and policies of the governing party.

But TIME is pretty sure that, given the study that they cite, the reason is … capitalism.  Here’s the “it was great, but” reason:

“We looked at very broad measures, and at individual measures, too,” said co-author Hershey H. Friedman, a business professor at Brooklyn College – City University of New York. The most dangerous sign they saw: rising income and wealth inequality, which slow growth and can spark instability, the authors say.

“Capitalism has been amazingly successful,” write Friedman and co-author Sarah Hertz of Empire State College. But it has grown so unfettered, predatory, so exclusionary, it’s become, in effect, crony capitalism. Now places like Qatar and Romania, “countries you wouldn’t expect to be, are doing better than us,” said Friedman.

I wish those who opine about this sort of thing would begin to delink capitalism and “crony capitalism”.  Because as soon “crony” is added, “capitalism” is no longer evident.  Instead you have powerful corporate/social/political constituents helping write laws that raise bars to entry in a markets to impossible heights.  You have the same entities suggesting regulations which have the same effect.  Capitalism, in its barest essence, is a voluntary transaction between two free people which ends profitably for both.  That’s it.  When government begins intruding with regulations and laws designed to limit and protect certain constituencies, from corporations to unions, that’s not capitalism, whether you stick “crony” in front of it or not.

It is certainly cronyism.  The government attacks, for instance, on Uber are rampant cronyism.  They’re designed by government to protect an existing constituency that doesn’t like the competition (and has had a government granted monopoly for decades).  Of course, in the end, it is the consumer – i.e. the citizen – who is hurt by this sort of cronyism.

And it appears that cronyism has gotten worse and worse over the past few years.  So while America may be in decline, it isn’t because of capitalism.

It’s because of cronyism, government favoritism, or whatever catch word or phrase you wish to tag the phenomenon with.  But leave capitalism out of it.

~McQ

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8 Responses to Guess what TIME blames for what it sees as America’s decline?

  • But they aren’t better served by saying “intrusive big government favoritism and regulation”, so they don’t say that.
    Maybe it’s too long to say that when they publish these hundreds of pages studies.
    I mean, after all think of the number of characters that are saved when we type “crony capitalism” instead of “intrusive big government favoritism and regulation”.

    But since most of the people involved in these studies frequently favor MORE government intervention to fix the problem that the government itself has actually caused, they’re unlikely to go suggesting that the answer is for government to scale back and let capitalism do it’s job.
    No, they’re going to pretend that, for example, Berkshire-Hathaway doesn’t have a vested interest in seeing the continued stalling of the Keystone Pipeline. And maybe they’ve, uh, lobbied certain individuals in certain places in government to, uh, suggest that it would be BAAAAAAAAAAD for ‘Merica if that pipeline was built. Causing those certain individuals to use their executive (or even legislative) powers to continue to stall any progress on an actual pipeline that could deliver oil.

    Rather, the study authors are going to pretend that most cronies in Crony capitalism are people and organizations OTHER than government officials and government agencies and government lobbyists and THOSE crony people need to be taken care of by more government.

  • A modest suggestion for a small correction…

    Capitalism, in its barest essence, is a voluntary transaction between two free people which ends profitably for both.

    I suggest “…a set of voluntary transactions between free people which benefits all”.

    But it has grown so unfettered, predatory, so exclusionary, it’s become, in effect, crony capitalism.

    This poor, stupid thing! It is HIGHLY fettered, if “it” refers to market economics. “Crony capitalism” has a MUCH better and more apt name: fascist economics . These poor, stupid “scholars” need to apply the right terms.

    • From the Hallowed Halls of Academe it looks unfettered since they have no experience in the real world. This is the kind of crap you get from people who go directly from student to teacher, never leaving those Hallowed Halls or having to cope with anything other than theory.

  • I consider the biggest difference between socialism and crony capitalism to be this: In socialism, almost all the nomenklatura work for the government. In crony capitalism, many of the nomenklatura are not directly employed by the government, and use more indirect means to get what they want.

    In either case, the nomenklatura compose an “aristocracy of pull” as Ayn Rand said. They take care of each other, and benefit economically from their insider status while wielding power over the proles.

    • The reason (well, one, anyhow) I think fascist economics is much more dangerous for Americans than socialism is that it leaves the patina of ownership in private hands. But, in fact, control of private property is largely ceded to the central government slugs.

  • There’s a word for crony capitalism: socialism.

  • But they uttered part of it during the VietNam Era.

    Military/Industrial/Financial Complex

    Eisenhower foresaw all of this .. including the Global Warming scheme

  • “But it has grown so unfettered, predatory, so exclusionary, it’s become, in effect, crony capitalism. ”

    The lack of understanding shown here would be breathtaking – if it weren’t so common.