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Blame Cronyism, Not Capitalism

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Re: Blame Cronyism, Not Capitalism

#181

Post by vannevar »

jimbokun wrote: post #151
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…

> But cronyism by definition operates at a human scale---a person can only have so many friends, after all If your friends are Senators, Representatives, and the President, you can also deprive unlimited millions of people from opportunities.

This is a great point. But your friends are unlikely to be Senators, Representatives, or the President unless you also have substantial capital.

Re: Blame Cronyism, Not Capitalism

#182

Post by notahacker »

goda90 wrote: post #150
hypersoar wrote: post #103

Earlier quoted context omitted.

The broad concept of "lobbying" is really just people bringing their concerns to elected representatives. I don't really see how you would ban it entirely.

The problem is actually in the wide gulf between illegal bribery, and regulated lobbying. The law says "This is lobbying, these are the rules, and required reporting", and the law says "This is bribery, and these are the punishments". There's a lot of activities involving politicians and money that don't fall under either.

And removing the legal stuff (candidates get publicly disclosed campaign donations from companies in all the industries they're favourably disposed towards the status quo in, which gives a pretty visible hint to any voters who care about how they're going to vote on the issue) potentially backfires by making the grey area stuff more powerful (candidates have much smaller campaign budgets from capped donations from private individuals, but mystery benefactors are spending a disproportionate amount on astroturf campaigns against some of them anyway)

Re: Blame Cronyism, Not Capitalism

#183

Post by usrbinbash »

asow92 wrote: post #175
usrbinbash wrote: post #170

Earlier quoted context omitted.

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 pa…

These sound like reasonable improvements, and maybe not without their own potential vectors for cronyism. I am genuinely interested to read more.

Of course they create vectors for cronyism, massively. All these improvements require constant vigil by regulatory bodies, the justice system and the public itself.

They also rely heavily on the public being educated enough, interested enough and participatory enough to reflect bad behavior in their voting decisions.

None of this however is an argument for less regulation. It is an argument for education and political participation.

Re: Blame Cronyism, Not Capitalism

#184

Post by recursivedoubts »

Chesterton said that “too much capitalism does not mean too many capitalists, but too few capitalists”

I think this concept applies to cronyism as well: we will always have cronyism and corruption and no system we can dream up will eliminate it. Therefore we should distribute the cronyism as much as is practical to minimize and localize the damage it can do. Bad behavior is less likely when you live within driving distance of the person you are inflicting it on.

In practice this means many more small, relatively independent political units. An idea for which there is nearly zero support amongst the current elites who are nearly unanimous in wanting more centralization, which makes sense when considering their interests. I do hear occasionally about a national divorce, which would be a good start.

Re: Blame Cronyism, Not Capitalism

#185

Post by vannevar »

simonh wrote: post #168
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 neve…

I think capitalism is great, it has a lot of benefits. But it can't just be left open-loop. You're right that the concentration cannot be avoided, but it can be mitigated so that it does not become catastrophic, which I would argue is the point we are nearing. Wealth and income disparities have not always been as acute as they are today.

Re: Blame Cronyism, Not Capitalism

#186

Post by Miner49er »

rubyist5eva wrote: post #173
Miner49er wrote: post #87

Earlier quoted context omitted.

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.

Such as?

Really anything that tries to democratize or distribute the control of Capital better. I wrote in another comment that I like parts of Mutualism [0]. I think the emphasis on credit unions, the limits to private property, and the emphasis on workplace democracy would help limit wealth from becoming too concentrated while still enabling economic development, arguably even enabling it better then Capitalism.

[0] https://en.wikipedia.org/wiki/Mutualism_(economic_theory)

Re: Blame Cronyism, Not Capitalism

#187

Post by simonh »

hnuser847 wrote: post #180
usrbinbash wrote: post #170

Earlier quoted context omitted.

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 pa…

> 1. Regulated Capitalism This is why we have cronyism in the first place. Who do you think is writing the regulations? Who's funding the think tanks and the "grassroots" organizations? Who's paying for the campaigns?

Here in the UK we have pretty strict campaign finance limits and lobbying is also heavily regulated. In most European democracies the comment was referring to this is really not a serious problem. It's always a problem to _some_ extent, but the US is an extreme outlier on this one.

Re: Blame Cronyism, Not Capitalism

#188

Post by dbsmith83 »

frank_nitti wrote: post #179
dbsmith83 wrote: post #86

Earlier quoted context omitted.

shrug I'm sure you can find much more examples of companies not behaving this way. This kind of behavior can be lessened with laws and penalties against frivolous lawsuits. It's hardly an indictment against the system itself.

How would that play out? Company B lobbies Washington to legislate/prosecute frivolous lawsuits like those brought by Company A against its competitors? Seems to me any resources B can muster for such an endeavor would be dwarfed by A’s resources…

Why would it have to rise to the level of lobbying in Washington? That's not how the majority of laws get enforced. It would be more like:

- Law for frivolous lawsuits created with criteria

- Company A engages in said behavior

- Company B files motion to dismiss based on said criteria

- Judge agrees and dismisses lawsuit, and warns of contempt if the behavior continues

Re: Blame Cronyism, Not Capitalism

#189

Post by vannevar »

aww_dang wrote: post #147
vannevar wrote: post #123

Earlier quoted context omitted.

>Regulation is the pretense which enables cronyism. Sort of, if you narrowly define cronyism as government favoritism. But it would be more accurate to say that capitalism itself encourages cronyism---in the absence of regulation, there is no need to rope in government officials and so the cronyism stays in the private sector. But it is no less cronyism. The article misses the real problem, which is that the over-con…

>the over-concentration of capital that develops naturally in unregulated capitalism... In such an unregulated capitalism system the producer would only obtain wealth by freely trading. It is the state intervention which creates the conditions for the centralization of wealth. We're living in a time where interest rates (set by appointed technocrats) don't keep pace with the rate of inflation. Inflation as it is orig…

>In such an unregulated capitalism system the producer would only obtain wealth by freely trading. It is the state intervention which creates the conditions for the centralization of wealth.

No. You can concentrate massive amounts of wealth simply by freely trading. As you get wealthier, it gets easier to accumulate additional wealth. This is the essential feedback loop of capitalism. It's a feature, not a bug, and it is readily modeled (see, eg, https://www.wealthinequality.info/). But it causes significant social problems if left unchecked, as we are seeing today.

Re: Blame Cronyism, Not Capitalism

#190

Post by dbsmith83 »

jevoten wrote: post #109
dbsmith83 wrote: post #86

Earlier quoted context omitted.

shrug I'm sure you can find much more examples of companies not behaving this way. This kind of behavior can be lessened with laws and penalties against frivolous lawsuits. It's hardly an indictment against the system itself.

On the other hand there are countless examples of similar strong-arming tactics that never see daylight. For example, negotiations with supermarket chains to get a spot on the shelf (and which spot), what the chain's cut will be, or which tools a car repair shop is allowed to use to be "licensed" to work on some brand (hint: it's the brand's own overpriced line of tools). "Lets provide the better product/service at a…

Indeed, over-regulation is cronyism
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