You can't get $10k to start a hot dog stand but you can get billions of dollars with literally no plan for profit if you're already rich or seeking VC. But want to start a normal business? No capital for you! And your taxes will pay for the banks and VCs when they screw up.
Crony capitalism may be cannibalizing productive capitalism in the U.S.
11–20 of 263 posts
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#12From the article:
>"Because it’s just a transfer from one person to another, rent doesn’t necessarily make an economy less efficient -- it’s just often unfair. "
I would argue that "rent" does make the market more inefficient. The more rent these companies can extract from consumers the larger their lobbying budget and the more campaign donations they can make at all level of government.
Political lobbying is the biggest and most effective tool used by crony capitalists.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#13> Crony capitalists seek to generate profits without producing anything of value. If they are generating profits, then they are doing something valuable. Are they sucking cash out of the government? Maybe, but it's valuable to somebody. You want to fix it? Don't try to fix the entrepreneurs, fix the goddamn government. Most of these Comcast-type rent-seekers are complete and total assholes, I agree, but I'm not about…
> Don't try to fix the entrepreneurs, fix the goddamn government
Did you read the article, because that's its point. Last sentence:
Let's hope legislators can put aside the rancor of this hyperpartisan age and work to end the favoritism that gives well-connected businesses an unwarranted advantage.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#14> Crony capitalists seek to generate profits without producing anything of value. If they are generating profits, then they are doing something valuable. Are they sucking cash out of the government? Maybe, but it's valuable to somebody. You want to fix it? Don't try to fix the entrepreneurs, fix the goddamn government. Most of these Comcast-type rent-seekers are complete and total assholes, I agree, but I'm not about…
"If they are generating profits, then they are doing something valuable."
Starting out with a completely unsupported assertion, eh? Bold strategy!
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#15Most rent-seekers are at least operating within the boundaries of law and physics, if not ethics.
Compare that to scam-preneurs behind startups like Theranos or uBeam, or vc-hustle-preneurs behind is-this-satire startups like Juicero, June, etc.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#16Just to kick off some discussion. Do you guys think that the shift from on-prem to SaaS is indicative of a move towards rent extraction?
Can someone care to enlighten me on how SaaS can qualify as rent extraction? I'm sure there is a lot of fudge, but the US is a "capitalist" society—in that I mean you're not required to continue paying for a SaaS product if you deem it's not worth the money. How is this 'rent extraction'?
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#17Just to kick off some discussion. Do you guys think that the shift from on-prem to SaaS is indicative of a move towards rent extraction?
No because on-premise software has not been regulated by SaaS providers. Customers are choosing SaaS.
SaaS is indicative of greater concentration and the possibility of oligopoly, though. I think it's only a matter of time before the cloud platforms begin coordinating price rises beyond the value they provide.
If they try to regulate on-premise software then it's time to break the glass.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#18There is a theory that all above market profits are generated by government granted monopolies.
So, for instance, software is protected by patents, oil and gas is protected by mineral rights, drugs are protected by patent law, entertainment is protected by IP rights, and so on.
In so far as there is competition, it often arises when the rent-seeking motivates people to disrupt the government protection by making it useless.
In software, people have lived with that since the beginning because it moves so fast. But even in slow moving fields like energy, we see new tech rendering the old protections less important.
I am not saying society has not paid a steep price for rent seeking behavior but that it has been part and parcel of all capitalism forever, and not unique to the American experience.
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#19> Crony capitalists seek to generate profits without producing anything of value. If they are generating profits, then they are doing something valuable. Are they sucking cash out of the government? Maybe, but it's valuable to somebody. You want to fix it? Don't try to fix the entrepreneurs, fix the goddamn government. Most of these Comcast-type rent-seekers are complete and total assholes, I agree, but I'm not about…
Kind of reminds me of that episode of Always Sunny in Philadelphia where Danny DeVito's character comes out of retirement to save his former company.
"So what do we make here, Frank?"
"What d'you mean? We make money."
"Right, yes, but what do we actually create?"
"We create wealth."
"Okay, but like, what do we produce, what do we manufacture, what do we design?"
"Manufacture? Leave that to the c&$%^s, we produce profit!"
Incidentally, starting to order parts a few hundred at a time from places like Taobao for various projects, I'm noticing that there are a lot of companies who just do that and slap a 500% markup on Amazon. Want a 6-pack of $0.15 mini-breadboards or a few dozen $0.05 jumper wires? Sure, $5.99 with prime shipping. What a steal!
Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.
#20The only way this will end is limits on campaign contributions and other kinds of bribery. The returns on lobbying are astronomical compared to the returns on productivity improvements.