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Crony Capitalism - The Real Cause Of Society's Problems
Submitted by Richard Ebeling via EpicTimes.com,
Since the economic downturn of 2008, the critics of capitalism have redoubled their efforts to persuade the American people and many others around the world that the system of individual freedom and free enterprise has failed.
These critics have insisted that it is unbridled capitalism, set loose on the world, which is the source of all of our personal and society misfortunes. We hear and read this not only in the popular news media and out of the mouths of the political pundits. We see it also in the election of a radical socialist to the leadership of the British Labor party, and a self-proclaimed “democratic socialist” riding high in the public opinion polls for the Democratic Party’s nomination to the U.S. presidency.
The first observation to make is that many if not most of the social and economic misfortunes that are most frequently talked about are not the product of a “failed” free enterprise. The reason for this is that a consistently practiced free enterprise system no longer exists in the United States.
The Heavy Hand of Regulation
What we live under is a heavily regulated, managed and controlled interventionist-welfare state. The over 80,000 pages of the Federal Register, the volume that specifies and enumerates all the Federal regulations that are imposed on and to which all American businesses are expected to comply, is just one manifestation of the extent to which government has weaved a spider’s web of commands over the business community.
The Small Business Administration has estimated that compliance costs imposed on American enterprise by this mountain of regulations maybe upwards of $2 trillion a year.
At the same time, the tangled web of corrupt government-private sector relationships is also reflected in the size and cost of special interest lobbying activities connected with the Federal government.
According to the non-partisan Center for Responsive Government, in 2014 there were almost 12,000 registered lobbyists working in Washington, D.C. Their job is to influence the writing of legislation that serve special interest groups attempting to obtain sectorial tax breaks, anti-competitive regulations or market restrictions, redistributions of wealth, or taxpayer funded subsidies and protections from the realities of free market competition and trade, or to advance various ideologically motived “causes.”
Spending Big Money to Plunder Others
The Center for Responsive Government, which tracks who lobbies and for what purposes and causes through the targeting of specific holders of or contenders for Federal elected office, including the Presidency and both Houses of the U.S. Congress, estimated that in 2014 lobbyists spent nearly $3.25 billion in the pursuit of privileges for some at the expense of others in society.
Just alone in 2013-2014, over $500 million dollars was spent on lobbying activity by the financial, insurance, and real estate sectors. Ideological and single-issue groups spent more than $352 million. Lawyers and lobbyists spent $151.5 million; health industry companies spent $142 million; and labor unions “invested” $140.6 million on lobbying.
Communications and electronic companies spent $116 million; energy and natural resource sector, $115 million; agribusiness, $77 million; construction companies, $67.7 million; transportation firms, $61 million, and defense companies, $25.4 million.
Based on the Senate Office of Public Records, the Center for Responsive Government calculates that lobbyists spent close to $41 billion on lobbying activities over the last 15 years, since the beginning of the twenty-first century.
These billions of special interest-serving dollars have influenced and affected the spending of trillions of dollars of Federal government expenditures over the same decade and a half. The lobbyists work with and use those who hold high political office so the special interest and ideological groups who employ them can plunder many others in American society; they can be viewed as among the most successful enterprisers in the country.
The Best Politicians Money Can Buy
But the symbiotic relationship between politicians and special interest groups of all types does not begin or end with the formal lobbying for legislative, regulatory and fiscal privileges and favors in the halls of Congress and the White House in Washington, D.C.
It goes on all year round all over the country in the form of campaign and electioneering contributions to get those elected or reelected who can be depended upon to direct the powers of government in ways that interest groups and ideological activists desire and from which they hope to benefit.
Again according to the Center for Responsive Politics, in 2013-2014, individuals and PACS donated over $1.6 billion to 1,671candidates of both major political parties running for office in the Senate and the House of Representatives. Democratic Party candidates received $736 million, while Republican Party candidates received $901.5 million.
While it may seem unseemly to suggest such a thing, these amounts for legislative lobbying and campaign funding, of course, do not include more millions of dollars that grease the palms of those in political power or who want to be in those lofty positions that represent funding that are outside the official channels in the form of “gifts,” travel junkets, off-the-books expense accounts, and out-and-out bribes of one type or another.
The real world of corrupted and corrupting crony capitalism includes more than lobbying expenditures and campaign contributions to have ringside seats in the halls of political plunderland.
The media has been in a frenzy with the revelations that the Volkswagen automobile company manipulated information about emission standards on its diesel vehicles to deceive environmental regulators in both the United States and Europe. This is being portrayed by many in the media as another example and “proof” of the consequences of unbridled capitalism, when left outside of sufficiently tight and demanding government regulation and intense oversight.
Government Partnerships and the Volkswagen Scandal
However, a closer look shows that this is, instead, another example of the result arising from government, business and labor union “partnerships.” In Germany, labor union representatives sit on the executive boards of large companies and corporations that work closely with various levels of the German government to attain political and “social” goals and objectives very different and separate from what a truly free market company does in pursuing peaceful and honest profits in the service of consumer demand on open, competitive markets.
On September 25, 2015, The New York Times quoted a former Volkswagen executive who said:
“There’s no other company where the owners and the unions are working so closely together as Volkswagen. [Volkswagen] guarantees jobs for over half the supervisory board. What management, the government and the unions all want is full employment, and the more jobs, the better. Volkswagen is seen as having a national mission to provide employment to the German people. That’s behind the push to be No. 1 in the world. They’ll look the other way about anything.”
In such a politicized market economy, working for and serving “national” and “social” interests become the guiding principle of business decision-making. Not only does it lead to wasteful and inefficient economic business operations having less or sometimes nothing to do with cost-effective management and allocation of labor and resources to make better, newer and less expensive products, it also corrupts the individuals participating in these activities.
Breaking one or more regulatory standards imposed by government on these enterprises is merely one way of “doing business” to advance other political goals such as “jobs” and “full employment” that are expected as part of the “partnerships” with local and national-level politicians and labor union leaders.
The only thing expected from the business enterprises in these intricate political webs is: Don’t get caught. If you do, then your political partners become like Captain Renault, the prefect of police in the 1942 movie “Casablanca.” When Renault orders the closing of Rick’s Café, the owner asks him on what grounds. Renault declares that he is “shocked, shocked” to discover that there is gambling going on in the café. At which point the roulette coupé appears with a stack of franc banknotes in his hand and says to Renault, “Your winnings, Sir.”
Volkswagen got caught, and will pay handsomely in financial and other penalties that will, no doubt, be imposed by the U.S. and European governments. And all the time, Volkswagen’s political partners, especially in Germany, who fostered and worked with the company to play its part in the “game” of government interventionism that has nothing to do with market-oriented enterprise, will sanctimoniously condemn the greedy and “selfish” conduct of profit-hungry businessmen.
What all these examples and facts about lobbying activities, campaign funding and government-business partnerships highlight is the pervasive extent to which “capitalism” as it now exists in the United States or Europe – or in fact all other parts of the world – has nothing to do with free market, laissez-faire capitalism.
Corrupting Hand of the Interventionist State
The Austrian economist, Ludwig von Mises, described this twisted, corrupted, and politicized capitalism over 80 years ago, in 1932, in an essay on “The Myth of the Failure of Capitalism,” published shortly before the coming of Hitler and the Nazi movement to power:
“In the interventionist state it is no longer of crucial importance for the success of an enterprise that the business should be managed in a way that it satisfies the demands of consumers in the best and least costly manner.
“It is far more important that one has ‘good relationships’ with the political authorities so that the interventions work to the advantage and not the disadvantage of the enterprise. A few marks’ more tariff protection for the products of the enterprise and a few marks’ less tariff for the raw materials used in the manufacturing process can be of far more benefit to the enterprise than the greatest care in managing the business.
“No matter how well an enterprise may be managed, it will fail if it does not know how to protect its interests in the drawing up of the custom rates, in the negotiations before the arbitration boards, and with the cartel authorities. To have ‘connections’ becomes more important that to produce well and cheaply.
“So the leadership positions within the enterprises are no longer achieved by men who understand how to organize companies and to direct production in the way the market situation demands, but by men who are well thought of ‘above’ and ‘below,’ men who understand how to get along well with the press and all the political parties, especially with the radicals, so that they and their company give no offense. It is that class of general directors that negotiate far more often with state functionaries and party leaders than with those from whom they buy or to whom they sell.
“Since it is a question of obtaining political favors for these enterprises, their directors must repay the politicians with favors. In recent years, there have been relatively few large enterprises that have not had to spend very considerable sums for various undertakings in spite of it being clear from the start that they would yield no profit. But in spite of the expected loss it had to be done for political reasons. Let us not even mention contributions for purposes unrelated to business – for campaign funds, public welfare organizations, and the like.
“Forces are becoming more and more generally accepted that aim at making the direction of large banks, industrial concerns, and stock corporations independent of the shareholders . . . The directors of large enterprises nowadays no longer think they need to give consideration to the interests of the shareholders, since they feel themselves thoroughly supported by the state and that they have interventionist public opinion behind them.
“In those countries in which statism has most fully gained control . . . they manage the affairs of their corporations with about as little concern for the firm’s profitability as do the directors of public enterprises. The result is ruin.
“The theory that has been cobbled together says that these enterprises are too big to allow them to be managed simply in terms of their profitability. This is an extraordinarily convenient idea, considering that renouncing profitability in the management of the company leads to the enterprise’s insolvency. It is fortunate for those involved that the same theory then demands state intervention and support for those enterprises that are viewed as being too big to be allowed to go under . . .
“The crisis from which the world is suffering today is the crisis of interventionism and of national and municipal socialism; in short, it is the crisis of anti-capitalist policies.”
How different is today, in its essential qualities, from Mises’ description of the interventionist state and government-business “partnerships” during those years between the two World Wars?
Real Free Markets Mean Privileges for None
If what we have today is what is widely referred to as “crony capitalism,” then how might we define and explain what a truly free market capitalism would be like? Let me suggest that the following seven points capture the essence of a real free economy:
- All means of production (land, resources, capital) are privately owned;
- The use of the means of production is under the control of private owners who may be individuals or corporate entities;
- Consumer demands determine how the means of production will be used;
- Competitive forces of supply and demand determine the prices of consumer goods and the various factors of production including wages of workers;
- The success or failure of individual and corporate enterprises is determined by the profits and losses these enterprises earn in free competition with their rivals in the market place;
- The free market is not confined to domestic transactions, and includes freedom of international trade;
- Government is limited in its activities to the enforcement and protection of life, liberty, and honestly acquired property against, violence and fraud.
In a real free market, there is no place for politicians to offer privileges and favors, because there are none to sell. There is no motive or gain for special interest groups to spend huge sums of money in campaign contributions or lobbying expenses, because political benefits for some at others’ expense cannot be bought.
Wasteful and corrupting “partnerships” between government and business enterprises cannot occur because political authority is restrained from any task other than the securing of each individual’s right to his life, liberty, and peacefully acquired property.
As Ludwig von Mises said, the political and economic crises through which the world suffers is not the crisis or failure of the free market. No, it is the crisis and failure of the interventionist-welfare state, and its anti-free market capitalist ideology.
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The real cause of the finincial problems of the world stem from the fact that the Major Banks print cash out of nowhere to buy bonds those very same banks issued so to keep stock prices high.
The fiat money system is the problem.
The Choosen ones want to lord over the masses and they are using debt to make it happen.
Yep, banker money is the problem.
That and government force to implement the "legal tender" status.
pods
"a consistently practiced free enterprise system no longer exists in the United States"
Author is delusional. It's all free all enterprise all the time in the US. Almost nothing is regulated now, and what regulations exist are written by industry lobbyists. New and more corrosive, job-destroying free trade agreements hatch every other week. Banks are bailed out by tax payers every reporting quarter. $Trillion of central bank largess surge through the stock markets ratcheting up prices to the delight of the C-suite and their fantastic bonuses. Corporations openly buy votes and now politicians are openly asking why they cannot simply take bribes and be done with it. Big Pharma gets mandatory vaccination legislation passed, Big Ag gets their farm subsidies on schedule, Big Oil gets their price subsidies too and further can count on the Federal government to launch a destabilizing war in any oil-rich country they need to have opened up to "democracy".
I'm really tired of this crap. I don't want to hear anything more about how hard it is to be a capitalist in American. What I want to hear is how these maggoty fuckers are running to the outer islands to escape the mob set on hanging them from lamp poles.
Exactly. Capitalism is long dead and is never practiced for very long, if ever.
The bankers and financiers write the banking and finance "laws", the oil and gas companies write the mining and extraction "laws", the healthcare and insurance companies write the healthcare and insurance "laws", etc. etc. etc.
Have faith as that which cannot be sustained, won't be. I do see a lot of "free enterprise" at the local and small scale however. What you want will come to pass as such "let the majority eat cake" monetary and economic experiments have been tried before.
When the poor majority can no longer afford to eat bread, let them eat cake, goes the saying.
It amazes me how poorly we as a people understand the role of our huge government as being at the root of all of these problems.
People can generally be expected to act in their own self-interest. This is the fundamental reason why governments that become too big and too powerful systematically wreak havoc on the world. Once a government becomes too large, it overwhelms any countervailing influences in its society, and all it requires to do this is to rely on the people that comprise it to do what serves them best.
Congress created the Fed by insanely delegating their power to create and control the currency to private interests. They laid the seeds for this disaster, and no other outcome besides the one we see was ever possible once this was done. As government expanded, so the power of the Fed grew as well, to the point where the vast sums of currency it creates and controls enable it and its owners, through reliance on self-interest, to govern essentially all of our federal interests. Once this occurs, the interests of this resulting oligarchy begin to compete ever more aggresively with those of the rest of society, and as their power grows, our freedoms and rights decline.
Capitalism is just another word for free enterprise, and free enterprise describes people using their liberty to improve their circumstances. At its essence, it is the verb form of individualism. Crony capitalism is a terrible phrase, because it suggests some form of capitalism lies at its core. It is nothing of the kind. Instead, it is a variant of collectivism, wherein a powerful group of aligned interests begin to substitute their privilege for the rule of law, with increasingly horrifying results.
There is nothing special about the United States that insulates us from the fate of all other failed democracies once a large and permanent plutocracy is formed. While the people continue to conflate government with society, we will be immune from realizing that our government has become the largest, most powerful and heavily armed corporation in the history of the world, and it's board of directors is not accountable to us.
Another saying is described as follows: Everything goes to hell, unless YOU prop it up.
+10,000
PERFECT explanation.
I'd only add that as the power of government grows, it becomes ever more irresistable to pathological personalities - psychopaths, sociopaths, clinical narcissists - who crave power and control over others more than anything else. So on top of the tendancy of normal people to act in their own self-interest, you add the pathological, who are driven to obtain as much power over as many people as possible. The result, as we're seeing now, globally, is truly disasterous.
"The bankers and financiers write the banking and finance "laws", the oil and gas companies write the mining and extraction "laws", the healthcare and insurance companies write the healthcare and insurance "laws", etc. etc. etc."
Dude. Capitalism is dead? Are you shitting me? Seriously how is all what you list not a fertile growth medium for modern capitalism? The nation is awash with rich turds making shitty deals. Wages have been frozen for a generation. Regulations across all industrial segments are ignored. Everything from schools to prisons is being privatized and run for profit. Any actual expense or anything resembling risk is socialized. The Fed bails everyone out.
It's like talking to a wall around here.
You "boys" better define terms first; I think you both agree more than you disagree.
I am not a 'wall', and I read your posts, cougar_w. Don't get discouraged. The Pragmatists are in the lead now, and as you know, this is a race to the bottom, and we are picking up great speed. The mother of all crashes is just round the bend down the tracks. Get ready to abandon the runaway freight train called 'the FED', Central Planning, American exceptionalism, Kings, Queens, Presidents, CEOs, and their ignorant loyal followers.
Oh hell yeah it's gonna be a crash, right off the rails and into a chasm. I know the shorts and market fun-der-mentals folks are hoping for 60% off the highs, but while we're going thru that bit of drama on the exchanges we'll be seeing lines at the service stations and riots in the aisles of Walmart.
"Crash" cuts all directions these days.
I'm not even in the markets, and I'm steadily emptying my 401K ahead of Jon Corzine coming to rehypothecate it. Desperate times, desperate measures.
...and what regulations exist are written by industry lobbyists...
you have jusrt perfectly described CRONY fascism, or corporatism, or call it what you like.
But it damn sure isn't actual capitalism.
There is not a capitalist alive -- in this or any other age -- who wouldn't write himself a handy bit of legislation to protect (or ensure) his investment. Laws and regulations to protect his market share or lower his taxes or freeze his wages or restrict his competitors.
Not one. The man hasn't been born who wouldn't do those things in an instant given a chance.
Anyone thinks capitalists are like some kind of noble savage is insane. Capitalists live and breath for their own profit -- profit first, profit before all else, profit at any external cost and by any means -- and greed is the reigning god of capitalism.
Ennoble the capitalist all you want to but it doesn't change his stripes. Like him for his stripes, or not at all.
Duh. Business owners hate their competition, as do government workers and politicians who have to run for office. Both constantly seek advantage, and so there is the temptation to collaborate, to become cronies. Capitalism is a system that assumes the players are all fallen creatures. Rule of law is meant to address abuses and keep competition fair and thereby very creative and productive. But remember government, a natural monopoly, loves to grow and control, and the bigger a player it is, the greater the tendency of businesses to engage government to private advantage, regulatory capture, revolving door corruption, quid pro quos, etc. Thats why governments' mandates must be minimized.
There is only one variable that determines the legislation, government, business, elitism, et cetera.
"Control the cashbox, and you control the World." A Christmas Carol
And you've once again made the case for why the government must NOT be given the power to pick winners & losers, and to protect cartels and monopolies, via legislative regulation.
The only power the government needs is the power to hand out swift and unavoidable punishment to those who harm others, whether through negligence or malice.
It's true that pretty much anyone who is given an opportunity to rig the game in their favor will do so, and sociopaths all the more so.
This is why they must not ever be given such an opportunity.
Government-created utopia is an idea that presumes an ability of a group of humans to somehow negate human nature, and the Laws of Nature themselves.
This is not just foolish - it is dangerous and, if pursued to an extreme, disasterous, as we are seeing now.
Like everyone else; you point to the symptom(s) and never address the root; man is an immoral creature born to trouble apart from being reconciled to the only one with righteous morality, our Law giver.
Don't we know this already?
Just drop in the helicopter money and get this shit over with.
Who is going to borrow it first?
pods
'Too big to fail' is the utter antithesis of allowing market forces to self correct. Add unlimited corporate and PAC funds to buy policy and fuel the corruption and we have a recipe of failure that is so evident today.
If the utopian ultra capitalism was that good, why has it never taken root?
Because the banksters who don't want it print fiat with which they buy morally bankrupt politicians who pass laws in favor of the moneyed elite and against those not in the club.
The only thing missing from this is the word sociopathic.
+100
wait a minute, i just a read an article that said egalitarianism is the real menace. i'm fucking confused.
If you are confused, then their plan is working.
Anything to keep you from noticing the obvious culprit.
pods
It's ZH, they like to cover all their bases and baffle with BS. That way when something goes down they can claim they were right.
We can thank the bankers for reminding us of the necessity of legislation and why it was enacted in the first place.
We de-regulated banks and trusted bankers and they rigged every market they could.
We removed the 1930s legislation designed to prevent another 1929 and they did it again in 2008.
There is lots of financial regulation because bankers are incompetent, unscrupulous and entirely without morals.
You miss the point, banks are the most highly regulated industry there is. Those regulations are not to protect the consumer, as is evidenced by the constant fines they pay, but to keep the monopoly going.
If you trust too much, you don't make too many birthdays.
Your comment is naive. And the bankers thank you and love you for that. You've bought into their game hook, line, and sinker.
What you utterly fail to grasp is the bankers want regulation. The more the better. They created financial regulation in the first place. On purpose. So they could control the playing field via force of government. Keep out competitors so they can enjoy monopoly profits and powers.
Bankers influence the legislation to make sure it's so onerous and heinous that they and only they have the size and scale capabilities, capital, and resources to be able to comply with all of it. To make sure it erects enormous barriers to entry for any potential competitors. There is a reason Goldman Sachs doesn't have meaningful competition for its profit streams.
It's all about weaving artificial advantages and power differentials to favor incumbent establishment bankers directly into the very fabric of the playing field, the rules of the game, the law. The more regulation, the more weaving they can do.
"sanctimoniously condemn the greedy and “selfish” conduct of profit-hungry businessmen"
Some of the first reglations dealing with the profit-hungry businessman:
Banning slavery and child labour
Some of the first reglations dealing with the profit-hungry businessman: Banning slavery and child labour
Which falls under the aspect of protecting life and liberty, and does not require any ability to regulate specific industries or sectors of the economy.
If we got rid of the fiat bankster sociopaths, we could dispense with about 99% of the regulations on banking, too.
Government regulations are required for cartels and monopolies to exist. There should be no such thing as Too Big To Fail, and executives who blow up a large business and impoverish countless workers as a result should have to make restitution to them out of their own pockets.
George Washington warned of the evils of corporations, and he was correct. Any legal device which allows a person to escape liability for their actions will be seized upon by sociopaths and exploited to its fullest potential.
Anything controlled is not "free."
Freedom doesn't and has never existed; just look at the definition and name a single individual who ever walked the face of the earth that had it. It is the devils grand delusion. Now look at enslaved and name a person who ever walked the planet who is not enslaved.
The Master Class is free. Imagine what that would be like, to look into the big blue sky and know that no one is above you.
the guillotine best disinfectant.
This article is going to piss off all the libertarians who believe all of society's ills are a result of socialism, communism, and egalitarianism.
This article is exactly what the Libertarians have been saying all along. Why would that irk them?
go over to the article on Egalitarianism - the comments would have you believe that the real ills of society are due to egalitarianism...or communism, or socialism.
I believe a lot of Libertarians confuse the discussion of which socio-economic system works best with the discussion of how or why capitalism is corrupted. They're two different discussions.
Capitalism is MOSTLY corrupted by unequal treatment/application of the law. Equal treatment under the law is NOT the same thing as egalitarianism. In my estimation, and I admit I may be wrong as I am no expert, but the MAIN thing which corrupts capitalism is the co-opting of the law by those in power - in such a way as to reduce competition for those who have already benefited from the free market, and to allow those who corrupt the system (via fraud) to escape criminal consequence - i.e., cronyism. In some cases these people are even lauded for their dexterity in manipulating the system.
I believe efforts to make our socio-economic system more socialist/communist/egalitarian are often knee-jerk, and incorrect, reactions (perhaps even ruses by those in power) to make the system seem more fair, just, and lawful. In this way liberals/progressives confuse the discussion too. But to say that these efforts are the MAIN reason capitalism is corrupted is wrong IMO. Introducing socialist/communist/egalitarian elements into our society (via gov't rule) may help to corrupt or confuse things...but certainly the issue has more to do with those in power engaging in cronyism than egalitarianism.
I was being snarky and sarcastic...without really explaining myself - hopefully this makes more sense.
In my estimation, and I admit I may be wrong as I am no expert, but the MAIN thing which corrupts capitalism is the co-opting of the law by those in power - in such a way as to reduce competition for those who have already benefited from the free market, and to allow those who corrupt the system (via fraud) to escape criminal consequence - i.e., cronyism.
Correct.This is why
- the power to regulate (micromanage) whole industries and sectors
- the power to pick winners & losers
- the power to protect monopolies and cartels
WHICH ARE REALY ALL THE SAME POWER
must not be given to the monopoly called government.
* Punish those who wrong others.
* Put the psychopaths in cages so they can't hurt the rest of us.
* Keep the barbarians from the gate.
* Provide a system of redress of civil grievances.
* Provide a stable, sound monitary system that reflects the economic output of that society.
Aside from those narrowly defined things, there aren't too many other powers that can be given to the government which don't result in a pathological, crony oligarchy arising to oppress and victimize everyone not in their "club."
Crony capitalism = capitalist - socialist cross breed society.
Those in power are the capitalists, doing what thatever they want whilst the population are dumb sheep with EBT cards to live on. Then as fast as money is handed to the population these capitalists hoover it all up and with a beneficial to them central bank they print more, repeat the process and then tell the population you owe them for the freshly created value they gave you.
YOU ARE NOT ALLOWED TO CREATE IT THOUGH THAT IS A CRIME.
Without the socialism and quite a few are getting pissed off with it being imposed upon them without choice whilst they see capitalist leaders having a lovely time at their expense, they would have been seriously culled by now. Without no money or EBT cards what will the population do... that's why you ended up with this bastardised society where you cannot play by their rules.
Nobody should own land, because nobody made it. It belongs to all of us. If you want to use it you should pay rent to society for the priviledge. Just becuase you grabbed huge chunks of it 100 years ago does not mean that you owe nothing to society. You should pay to society what that land is worth.
Next time I want to go hunting for deer I'll set on your front porch. Since no one "owns" land...
If I am paying rent to society for land it is for my exlusive use. It's in the contract. Keep off my deer.
"Society" is just another word for oligarch in this case. Come to think of it, when is it not?
Who gets to decide what "society" spends the rent money on? And, what is "society" anyway? Simple; society is cooperation between individuals, the only entities who really matter. That cooperation can either be peaceful and voluntary, or, as is increasingly the case in our brave new (totalitarian) world, it can be forcefully imposed under threat of violence. Didn't the collapse of the Soviet Union teach today's collectivists anything?
The root of all freedom is private property rights. The fact that some families obtained deed to large chunks of land a long time ago does not outweigh the damage done to the populace if they aren't allowed to own the land upon which their beds stand.
Without private property rights, the government - meaning the oligarchy - controls all the land. Do you know what that makes everyone else? SERFS. Rent is not paid to "society," it is payed to government which, again, means the oligarchy.
That's why the first plank of the Communist Manefesto is the abolition of private property rights. This paves the way, along with plank #5 (central bank), for the global neofeudal world order.
Communism is a bankster creation. Embracing any part of it is playing right into Rothschild's hands.
Real capitalism is on the rise in Russia though. Having established Kaliningrad (formerly Königsberg) in Europe as a Special Economic Zone, now Vladivostok in Asia has become a free port:
Has there ever been any system besides crony capitalism? Monarchs and oligarchs have never wanted a level playing field. Politicians are just the hired help, put in office to be the agents who deliver the benefits to them. Anyone who wants a fair system is labeled a socialist or communist. We have a poorly educated public who are made even dumber by a pathetic, oligarch-owned media. It truly is amazing most people willingly accept their fate as if there is no other way.
Correct. The term 'capitalism' is just a euphemism for landism where a small percentage own most of the land. And with the rent they collect they buy all the equities and own all the debt paper.
The American founding was truly different.
We have lost sight of how special our founding was. The promise of limited government was the promise of individual liberty which is the only true equality.
You can't have liberty if all the land is owned by a small minority. The people who work on it have to pay rent and are effectively slaves. It's been like that in the USA since the start. The founders were ignorant.
Submitted by Richard Ebeling
Thank you, Dr. Ebeling, from a University of Dallas alum.
This article dovetails well with the article I wrote yesterday...
Meritocracy and the Justice of Class Mobility.
http://incapp.org/blog/?p=2678
Richard Ebeling has made the biggest mistake that all economists make, because they are all brainwashed. He believes that land should be an owners capital. It isn't. It's society's capital. Nobody made it, and just because it was grabbed by force does not mean that you don't owe society for its use. Anybody who has bought land is handling stolen goods that belong to society.
If land exists, then it had to be made. Your logic is flawed and the Owner is God. The inheritance belongs to His saints.
BTW - in the surreal world we live in; property taxes make sure that no one owns any land except for the taxing authorities.
We are all his saints, not just the 0.1%. The 0.1% are collecting rent that belongs to all his saints. They are playing God.
Property taxes are an abomination. Rent should be collected for the land, not for the man made structues on top of it. After paying the rent to society, you should keep anything you've made, with no taxes on it.
Always writing about the symptoms of societies and never able to come to the root cause, which is immorality. Abandoned by God, for we first abandoned Him and thus we pay the price as we are left to go our own way, which is ALWAYS downhill into the sewer of immorality.
We will never learn until it is too late & forced to see ourselves and our ways for what they really are, but for a remnant there is a Great-Hope.
If "people" require the wrath of God to behave properly, they were evil to begin with and remain so under the watchful eye of God. Not everyone is like that.
Capitalism is best practiced by people who do not cheat at Solitaire.
Free markets are a utopian ideal as much as communism was. For it to be real we would have to have a new Capitalist (as opposed to a new socialist), one that worries only about earning money without the wish to interfere with the free market mechanisms. National states as well would have to disappear as there cannot be such a thing as national interests and free market capitalism.
Although this article points to Misses who was an idealist, current economic situation was much better described by Marx, a realist and a cynic. Capitalism always tends to go along the same lines until a reset event (such as WW). While wealth inequality is minor, capitalism is young and productive. This progresses to the next step when private capital is accumulated and ready to be used in large projects, everyone benefits from it and free markets are almost a reality. Than comes the late capitalism where wealth inequality is high caused by the owners of the capital to protect their wealth. Monopolies, protectionism, crony capitalism emerges stronger than ever.
Money buys many things. Food, water, shelter, car, jewelery. But at some point money cannot be spent on anything that will make a capitalist better off. This is when money starts buying power or better yet lots of money=power. The power of the few of the most able (=wealthy) to affect the free market in their favour. What Misses described about Germany (or USSR or China for that matter) only means that power comes from the power of the state or at the point of a gun. In free markets power is accumulated through money.
Free markets then again need to be governed by some sort of agency. Someone to prevent market rigging, goods dumping, etc. There have to be people who can lead it and who are given the right to information and use of police. Hence most likely the government. And this group of people would have to be completely non biased towards the capital owners. Which as it turns out is not likely.
This is why I have to side with Piketty. Wealth tax (no income taxes) has to be used to create a continuous loop of middle age capitalism where wealth is continously redistributed via government spending or better yet a direct a mix of government funding and equal wealth distribution. Piketty's 2% are a in the order of magnitude that is required, but as I do not like set numbers I would rather suggest relative deviation of wealth distribution (dev/avg). At current wealth distribution in USA this would about 5%. With net wealth of USA private property at 100t, this would be 5t. Government gets it's pop and the rest distributed equally per adult. At this point there would be a hunt for yield for wealth protection that is higher than the taxation causing a much more liquid situation in the markets. Unspent, unused weatlh would decrease while properly used wealth and investments would increase. This would also create an incentive for those taxed the most to increase equality. Or to assisin the person promoting the idea. Now this is a place where free market can exist.
Free market is just another word for people going about their business without the State meddling and stealing from them. It's not a utopian ideal to think the State has an end and that people can evolve past it.
It is. For if not the state, a group of wealthy people will create a guild to improve their profits and rig the free market while obtaining the "guns" to fight competitors. With the state, the difference is that they have a middle man with guns already.
For reference check the Hanseatic league or the Lombardian league trade.
If it's not a utopian ideal, then why doesn't it exist? Why do many (not all) of those who benefit from the ideal corrupt it?
Here's why - because they can benefit even more if they reduce competition in their favor once they have amassed the means to do so.
So is your cable company charging you ridiculous prices because the state has meddled in their affairs, or because they have obliterated their competition. Did they obliterate their competition in truly ethical ways? Or did they use their influence to gain further market-share? Again - is the state responsible for any of this?
As much as libertarians like to talk about personal responsibility they sure do like to whine about the 'state' f'ing everything up for them. Aren't we all the state? If not, WHY? It's your gov't isn't it? If not, WHY?
"So is your cable company charging you ridiculous prices because the state has meddled in their affairs, or because they have obliterated their competition. Did they obliterate their competition in truly ethical ways? Or did they use their influence to gain further market-share? Again - is the state responsible for any of this?"
Yes. The cable companies are given exclusive right ot operate in a gioven area. That is a monoply and the goverment created it.
I watch TV ads for various cable companies. Except for one, i cannnot subscribe, as it is the only one that serves the area, due to monopoly protection.
Most of the people in and around Los Angeles could not watch the Dodgers on TV, as one cable company had the rights and that cable company was not available in various areas due to government restriction.
Once again - who is responsible for the 'STATE' that enabled the monopoly protection?
Did some faceless bureaucrat enact a law all on his/her own power which enabled monopoly protection through regulation or did the cable company contribute to some politicians' campaigns so as to get legislation passrf which would regulate the competition and create the restrictions you gave as an example? I'm inclined to think the latter is a much more plausible scenario. That is what 'cronyism' is. Statism & Cronyism are two different things.
Statism & Cronyism are two different things.
This is incorrect. Without statism, cronyism cannot happen. Unless the government can interfere in the market, to the benefit of some and at the expense of others, there is no point in being its crony.
Wealth tax doesn't work. Whatever you define as wealth I will move my wealth into something else. If you say money is wealth I will move it into equities. If you say equities are wealth i will move it into bonds or racehorses or fine wines or gold, and etc.
You simply need to collect rent on behalf of society for any land used. The better the land the more the rent.
The land tax was a fair idea in its conception. It still has some merit today. However this would destroy farmers or the food prices would have to go up significantly. In cities this is regulated by property taxes.
The wealth tax is just a logical progression of the land tax. If you have this wealth, use it wisely and invest in good ideas or you lose some of it by default.
Taxing wealth is difficult, but it does not mean it cannot be done. Elaborate financial systems of today show how a system can be modeled for anything if there is will.
I'm still trying to figure out the exact model. The base idea is for all to have some sort of incentive to report their wealth. Property, bank accounts, vehicles and financial assets are the easy mark for wealth tax. After these are included, incentives can be created for voluntary wealth reporting. Let's say that you can provide money to yourself by registering your assets with a bank without selling them (like 100% stock loan).
I don't understand why you say this would destroy farmers. Rent for agricultural land would be much lower than rent in cities, per acre.
The basic flaw in wealth tax (apart from defining what wealth is) is that the harder you work the more you hand over as tax. With a land rent you simply pay the rent and then you keep everything irrespective of how hard you work.
OK, I get your point on the farmers now.
The harder I work, the more taxes I have to pay for my income taxes currently (~40%). The more I own however does not go into that equation as much as property tax is fairly small let alone financial products tax (0).
Hence the idea with wealth tax is to create a society where work and good decisions translate into wellbeing. Not owning mansions on 0 declared income.
To define wealth, I would use the term "A measure of the value of all of the assets of worth owned by a person".
All predicated on a profitable family farm. Awfully hard to find these days.
You can't have freedom without personal responsibility. As long as the corporate veil protects executives from the results of their action, and settlements are just another cost of doing business, America will continue to be bent over.
All these individual pieces like Crony Capitalism are simply facets of the larger whole. Like the proverbial elephant, everyone sees the part that's been put in front of them and misses the big picture.
It all adds up to one thing, which is that a small group of people have given themselves ownership of everything, including other people. This is the cental problem that is being obfuscated by the planned divide and conquer technique of Left-Right, Socialism-Capitalism, and the rest.
But now it's failing, and people are growing restless with the BS explanations.
Libertarian thinking seeks to eliminate free lunches by keeping people focused on their self interest. How does the free market suppress the urge to join forces and be crony capitalists? It seems to incentivize collusion if anything, and to promote this upside down socialist free lunch world we have today.
Free market collusion was repeatedly attempted pre-progressive era, 1870's-1910's. What everyone discovered was competition is a bitch. Every attempt at collusion was foiled as defectors from cartels routinely succumbed to lucrative opportunities to secretly undercut cartel prices. Where they held out and raised prices to reap monopoly profits, innovative competitors exploded out of the woodwork in response, offering lower prices that didn't include the cartel premiums, yanking away the cartel's market share.
It was in response to their string of failures to form monopolies in the free market that cronyists embraced government to do so. Government needed to take over all the areas of the economy they wanted to dominate so they could buy off legislators for preferential legislation.
This couldn't be direct about this of course, so it was accomplished via the progressive movement and its "reforms," for the good of the people of course. This inserted government into finance (The Fed, 1914), Food and Drugs (The FDA, 1906), Transportation (ICC, 1906), etc. Thus effectively ending free markets in these areas and creating the systems of power that cronyists exploit to enrich themselves at everyone else's expense to this day.
So I guess you don't mind eating bleached meat or taking counterfeit drugs that contain shards of glass? While I'm not saying that regulation is the answer, one must admit that companies, even in the freest markets do not always act in their consumers' best interests.
That's what lawyers are for.
It's a numbers thing. How many would die before the poison maker is run out of business? How many die before the FDA yanks the drug from the market if at all?
I eat Kosher hot dogs and I'm not Jewish but I trust the quality of the dogs.
Threw in the last part for the Zionist Agenda crowd....
That's the bogeyman the cronyists crafted for you so you'd rally behind government taking away your freedom of choice. And even argue against people like me when I tell you that you are capable of running your own life including deciding what drugs and meat to buy from whom.
In reality, the disincentives surrounding attempting such malicious acts makes them effectively suicidal in a free market.
In a society without government regulation, monopolization of dispute resolution, and exemptions from consequences, reputation would be everything. Like your credit score or your eBay seller rating, you would be checked up on by everyone before doing any major business. Your livelihood would hinge on a clean, strong reputation carefully protected and amassed over time.
Get caught selling counterfeit drugs or negligently allowing glass into meat and not only would your reputation evaporate, you would be fully legally liable for all damages caused to life and limb. There would be no state-granted corporate immunity. There would be no state-slap on the wrist of doing a few years in jail then running around scott free. Instead, there would be lifelong debt slavery as necessary until you could restitute each and every one of your victims in full to the penny.
Yet, you'd still be dependent on finding others to trade with to earn money to pay those damages and put a roof over your head. And precious few would relent to hire you or buy your products with such a black mark on your name. You'd be an economic pariah, the equivalent of a guy with Herpes at a love-in. You'd probably be dependent on the charity of your former victims just to feed yourself for the rest of your life.
Such an onerous risk/reward equation makes even considering such acts effectively a non-starter for any self-interested person living in a free market.
No government participating is a factor you left out.
There is no crony in capitalism. Cronyism is anti-capitalism.
Bailing out the bankers was cronyist, not capitalist. Crony capitalism is a false term, which attacks capitalism along with cronyism. The good is attacked along with the bad. The result will be worse, as it leads to socialism.
Good point. Dropping the term capitalism and just sticking with "cronyism" more accurately describes what is a fundamentally diffirent thing.
Blatent in your face widespread corruption of just about everything. It is sickening.
Its everywhere you look.
Think about how it should be and how to make that happen.
The Austrian economist, Ludwig von Mises, described this twisted, corrupted, and politicized capitalism over 80 years ago, in 1932, in an essay on “The Myth of the Failure of Capitalism,”
Twisted, corrupted and politicized is not capitalism.
Neither is the U.S. a democracy, despite the propagandistic use of that word over and over again ad infinitum. The U.S. is on paper, a constitutional republic.
The people that don't know, don't care. You see that, don't you?
Directly interfere with capital markets and when it fails, blame capittalism.
Just enter the launch codes because the average person is too stupid or too lazy to live
That must be some family you have there...
crony capitalism? too many syllables.
need to call it for what is really is: fascisim - the private control of the state.
Funny thing. When I speak of honesty and integrity. 9 out of 10 times Im talking to myself.
Nobody's perfect...
"Crony Capitalism" is the politically correct term for Fascism.
"What we live under is a heavily regulated, managed and controlled interventionist-welfare state. The over 80,000 pages of the Federal Register, the volume that specifies and enumerates all the Federal regulations that are imposed on and to which all American businesses are expected to comply, is just one manifestation of the extent to which government has weaved a spider’s web of commands over the business community."
Which businesses benefitted from that? Jamie Dimon became a billionaire under all that regulation. The top .01% became even richer under all that regulation.
Has the government weaved a spider web, or has BIG business weaved a spider web, with the help of government? Who are the BIG doners to the candidates who get elected and pass the laws BIG business wants?
"As Ludwig von Mises said, the political and economic crises through which the world suffers is not the crisis or failure of the free market. No, it is the crisis and failure of the interventionist-welfare state, and its anti-free market capitalist ideology."
Mises was right. It's what we know as "corporatism" aka fascism.
That is what has replaced our naturally balanced and fragile system of free market economics. It emanates from the political Left and those who own it, fund it and advise it (big money, banksters), who cannot resist the temptation of meddling and interferring (because they know better) and are pre-occupied to the point of being obsessed with control-freakery.
The consequences are all around us for all to see. And what we see now creeping in - NIRP, QE, banning cash - are moar of the same failed policies. Socialism is following the same path it always follows: when socialism fails, demand moar of it.
When Ponzi Casino Crony Capitalism fails, demand moar of it, eh.
Hey Master of. Am I wasting my time posting?
I'm not a mind reader so, I don't know? The answer to that question is indeterminate given that I don't get your point, but someone on Z/H likely does, VWAndy. Half the time I can't figure out if people are being literal, or rhetocial, in their questions posed on Z/H. In other words, the discourse around here seems to have multi-level meaning if one is camped out in the analytic camp.
BS answer. Pussy.
I have a bad tooth right now, and my lower jaw is swollen, infected, and my brain is on standby today, VWAndy. Below in a post you spoke of the contempt you have for people that are intellectually dishonest, but when I respond with an honest reply you attack in an ad hominem fashion? Methinks you are irked about much more than my cordial reply.
It's also Thanksgiving here in CANADA today, eh.
Russia has one of teh worrst crony capitalism problems in the world. Here's what Bloomberg said about it today:
It's the Economy, Putin283 OCT 12, 2015 12:01 AM EDT
By Editorial Board
Russian President Vladimir Putin's renascent cold war with the West is partly meant to obscure his country's economic slump. It's a reckless strategy -- not least because it's making the slump worse. The consequences for Putin and for global security could be dire.
Sending troops into Ukraine in the spring of 2014 was a major change in Putin's political calculus. Instead of promising Russians prosperity in return for accepting his unchallenged authority, he'd appeal to nationalist fervor. The shift drew attention away from his economic mismanagement, rampant cronyism and failure to reduce the country's dependence on exports of oil and gas. Supported by with-us-or-against-us propaganda, it also provided cover for harsher persecution of his critics.
Now, the repercussions are becoming apparent. Without the support of high oil prices and hampered by Western sanctions, Russia is headed into a recession deeper than the U.S. experienced in 2009. Though the official unemployment rate remains low, other indicators suggest that hidden joblessness -- including people going to work and not getting paid -- is on the rise. Wage arrears were up 29 percent in September from a year earlier, according to the Federal Statistics Service.
SPAM
Goerge Carlin said some shit about dishonesty being the second best policy. Well there is a big differance between the two. Stop setteling for anything less.
The best way to show respect to another person is to tell them the truth. Even if they will hate you for it.
Stop being such a bunch of pussies. Call all the scumbags out on the lies.
I don't know why we perpetuate the use of the term 'crony capitalism'. Let's say what really it is, Mussolini style fascism, plain and simple.
Dishonest, myopic, delusional libertarianism in full dress suit.
"Capitalism, with the certainty of a compounding interest algorithm, will always metastasize into its most virulent 'crony' forms." Sa from An Epiphany On Wall Street
@NineInchBride