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Blame Cronyism, Not Capitalism

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Re: Blame Cronyism, Not Capitalism

#161

Post by jimbokun »

Miner49er wrote: post #111
bvaldivielso wrote: post #8

Earlier quoted context omitted.

Could you elaborate how? Is this specific to capitalism? or is cronyism the logical conclusion of any societal system that lasts for a while? For example, and just to choose an example that is obviously not capitalist, would you say cronyism wouldn't happen in a communist society? As far as I understand, it very much happened in the URSS. I'm not bashing on communism, just trying to understand your statement.

Capitalism rewards owning capital heavily, so it naturally trends towards wealth concentrating. The argument against this is to regulate it, but overtime, you'll always end up trending towards capital becoming more powerful then the regulators. You'll always have Capital just buying the regulators, basically. You can have "resets" (like the Great Depression and WWII) that maybe fix this a little bit temporarily, but…

How do you create a society that limits positions of power?

The US Constitution tries to do that by pitting different groups in power against each other, diffusing their power and forcing them to cooperate to achieve anything. And then adding a Bill of Rights specifically limiting the power government has over the individual.

Do you have a better idea?

Re: Blame Cronyism, Not Capitalism

#162

Post by Miner49er »

mrkentutbabi wrote: post #66

Is wealth inequality necessarily bad? Genuine question here.

It's inefficient. If capital becomes too concentrated, it won't be used as effectively if distributed more. There's probably a balance, but under capitalism wealth inequality tends to increase, if left unchecked.

Re: Blame Cronyism, Not Capitalism

#163

Post by [deleted] »

vannevar wrote: post #140
pram wrote: post #126

Earlier quoted context omitted.

I've also long been perturbed by the definition of capitalism largely focusing on markets, private property, and even entrepreneurship. Since those are like, as old as human civilization probably.

Why does the idea that capitalism has co-existed with civilization perturb you? Not criticizing, just honestly curious.

[deleted]

Re: Blame Cronyism, Not Capitalism

#164

Post by jimbokun »

Miner49er wrote: post #87
rubyist5eva wrote: post #10

Earlier quoted context omitted.

> Cronyism can plague any economic system, Klein explained, across the spectrum of free-market economies to governmentally controlled environments. Try reading the article?

Yeah, I agree, but I think there probably exists economic systems that are far more resilient to cronyism then capitalism. Whereas I think capitalism will always result in cronyism.

What are those systems? And where is the real world evidence they are more resilient to cronyism?

Re: Blame Cronyism, Not Capitalism

#166

Post by depaya »

VoodooJuJu wrote: post #82
depaya wrote: post #55

Earlier quoted context omitted.

It's ok to express frustration with something without having a solution to it.

I guess it's "okay" (what isn't "okay" in this context?). But it's certainly not useful. So you've restated the problem - great. This is a good way to lead into a solution, which is the the more useful thing to discuss. So let's hear the solution.

I don't have a solution. I don't have much knowledge of such extremely complex systems and I have no hope of coming up with a solution myself.

I can see that my car is sputtering black smoke when I drive it and correctly identify that it's a problem, but I bring it to an expert for a suggestion to fix it since I don't have much knowledge in this topic either.

Re: Blame Cronyism, Not Capitalism

#167

Post by sleepysysadmin »

usrbinbash wrote: post #26

[flagged]

>The maxime of capitalism is to maximize ones own profit.

Not sure I necessarily agree with this. I can understand how 1 might come to see it this way. Capitalism is about measuring ones contribution to society.

>What happens in practice is an accumulation of wealth == power in the hands of a small elite, which then no longer need to compete, cronyism or not, because they have the resources to defeat every competitor, even if the competing product is superior.

In our current system which is a regulated capitalist system this happens. It would be a strawman to assert this against capitalism and exclude any impact that government regulation may provide. I'm pretty most people could see government monopolies as abusing capitalism.

>Company A, having been dominant on the market for a long time, can simply tap into their savings and lower its prices, to the point where X is more attractive to consumers than X'. B, new to the market and wo. such substantial savings, cannot compete and goes bankrupt.

Lets evaluate.

Tesla: Market Cap of ~1,030 Billion $ off of ~$30 billion revenue.

Ford: Market Cap of ~100 billion $ off of $150 billion revenue.

GM: Market cap of ~100 billion $ off of $150 billion revenue.

Stellantis: Market cap of ~64 billon $ off of $100 billion revenue.

Very clearly shows why Ford and GM are rushing to get EVs out to market. Stellantis who had good plans has basically not arrived to market with anything. This is one of the highest regulated industries and capitalism is working great here.

>Okay, but the consumers still get X' when A buys the patents from the now bankrupt B, right? Maybe.

Patents != capitalism. A true free market would not have any patents. If you build something new and unique, everyone would be able to come in and copy it. We could debate the merits of the patent system and perhaps from society's point of view it's a good thing. However, it the current subject, this isnt capitalism you're arguing against.

>They have eliminated their competition anyway, so why bother, when they can just continue printing money by making X, right? Remember, the maxime is maximize-your-profit not deliver-the-best-product.

I think this is a good spot to come back around. Capitalism is not competition. Yes it engenders competition but that's the wrong way to look at it. This is something business owners need to learn. Capitalism is about solving problems and contributing to society. Capitalism measures this in one of the most effective ways.

Re: Blame Cronyism, Not Capitalism

#168

Post by simonh »

vannevar wrote: post #136

Why is cronyism bad? Because it distributes opportunity based on relationships rather than merit. Why is unregulated capitalism bad? Because it distributes opportunity based on capital rather than merit. But cronyism by definition operates at a human scale---a person can only have so many friends, after all---while the scale of capital is unlimited. in principle, one person can deprive millions of people of opportuni…

OK, but getting rid of capitalism doesn't get rid of capital. No economic system has ever done that, and so you still have the problem that whoever controls capital has the power that comes with it. So who gets to control the capital, and what system of laws and regulations do we enforce that both protect and circumscribe how that capital is managed and used? This is the problem Marxists have struggled with, and never managed to convincingly answer.

Re: Blame Cronyism, Not Capitalism

#169

Post by jimbokun »

ansc wrote: post #15
amtamt wrote: post #6

Why not blame human nature's shortcomings, instead of any *ism... Capitalism, Communism, Socialism and what not.

It's not very constructive, is it? "It's human nature to be exploited" Then again, not a lot seem to happen when pointing at short-comings or issues of prioritizing profit and growth above all else in society either.

This view point was the basis of the US Constitution. Do not trust any central power. Pit them against each other to limit what they can do. Enumerate the rights of the people that government can not infringe.

The whole thing is based on the assumption that human nature tends to lead to exploitation of others, and build in safeguards against it.

Re: Blame Cronyism, Not Capitalism

#170

Post by usrbinbash »

asow92 wrote: post #42
usrbinbash wrote: post #26

[flagged]

And what is your solution? You can say something is flawed, but compared to what, and how would you improve it?

The solution already exists and is used, to varying degrees, by many western industrializted countries, especially in Europe.

1. Regulated Capitalism

2. State Funded Infrastructure.

ad 1) Capitalism isn't a bad system per-se, but needs to be kept in check. States need to ensure that un-competitive behavior is kept in check, that too-large monopolies are reigned in, that consumers are protected, that fair taxes are paid and that private wealth has no undue influence on politics.

ad 2) Structural systems required for a society to function properly have to be, at least partially, state funded, state controlled, or even state owned, thus ensuring the availability and baseline quality of structural services to as many citizens as possible, with regard for revenue generation being a secondary concern.

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