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Blame Cronyism, Not Capitalism

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Re: Blame Cronyism, Not Capitalism

#61

Post by aww_dang »

The author makes an important distinction between state enabled cronyism and market activities. Comments here seem to be missing the point. Regulation is the pretense which enables cronyism.

I enjoyed his appearance on the "Economics for entrepreneurs" podcast.

Re: Blame Cronyism, Not Capitalism

#62

Post by Zenst »

dbsmith83 wrote: post #46
usrbinbash wrote: post #26

[flagged]

It's more complex and doesn't always go like that. If X' is a superior product objectively, then company B can find investors willing to back them and take on company A. Company A could itself be an investor in company B

Yes way more complex as a recent article outlined regarding a very relevant story.

"$35BN Match Group file multiple lawsuits against muzmatch following repeated failed acquisition offers" -

https://news.ycombinator.com/item?id=29860034

Re: Blame Cronyism, Not Capitalism

#63

Post by commandlinefan »

episode0x01 wrote: post #9

Not a shocker that corruption ruins things. I guess then the question is how you can design a broadly distributed system that removes the incentives for corruption and minimizes its impact. My guess is that such a system won't be found in capitalism

> such a system won't be found in capitalism

It won't be found even harder in communism, where the cronyism is baked into the system of governance.

Re: Blame Cronyism, Not Capitalism

#64

Post by pmyteh »

lanevorockz wrote: post #39
Miner49er wrote: post #3

Cronyism is the logical conclusion of capitalism.

Cronyism is essential part of Big Government, something that is not necessary for Capitalism but completely necessary for Socialism.

The entire basis of modern public administration (and one of the reasons it can be more bureaucratic than market mechanisms for delivering services) is that it attempts to rigorously exclude cronyism. The reason for civil service tenure, for example, was to stop politicians selling public service jobs to the highest bidder, or handing them over as a quid-pro-quo for favourable decisions. As seen in the late 19th and early 20th Century 'Progressive' movement in the US, for example, the idea was for a government of the highest possible rectitude.

Now, that obviously doesn't happen in all areas all of the time. And we have moved away from that kind of rules-structured ideal over the last forty years or so in pursuit of greater efficiency (which has re-introduced cronyism in the UK to a greater degree, for example - see the present government) but it's grossly over-simplified to say that cronyism is an 'essential' part of big government, when its original foundations were intended to produce a (big) government of laws and not men.

Re: Blame Cronyism, Not Capitalism

#67

Post by vannevar »

usrbinbash wrote: post #26

[flagged]

Yes, the fundamental problem is that there is a strong feedback loop between capital and income, so that the more capital is accumulated, the more it produces income. In practical terms, it means that the rich can not only buy rewards for the work they've put in, they can also buy opportunities for additional income---opportunities that poorer people could've won with hard work but now are no longer available. This feedback loop is exacerbated by a lot of factors, including things like cronyism and winner-take-all digital markets, but the fundamental problem is intrinsic to capitalism.

Re: Blame Cronyism, Not Capitalism

#68

Post by pibechorro »

seventytwo wrote: post #33
episode0x01 wrote: post #9

Not a shocker that corruption ruins things. I guess then the question is how you can design a broadly distributed system that removes the incentives for corruption and minimizes its impact. My guess is that such a system won't be found in capitalism

Corruption can’t be decoupled from any human organizational system, though. The system needs to be designed in a way to take corruption into account and minimize it. In unregulated capitalism, corruption provides a huge competitive advantage, so controls must be put in place to counteract that. Typically that’s done with government intervention. The idea that we can “blame cronyism, not capitalism”, is a red herring.…

Unregulated free trade doesnt reward corruption, it's the opposite. It rewards value to the consumer. Goverment intervention is what rewards corruption when it eventually becomes captured and now insiders control the levers of the economy forcing themselves on the end user. You need to invert your thinking, we need more freedom and less interventions by middle management. Market feedback needs to be emergent from the bottom up.

Re: Blame Cronyism, Not Capitalism

#69

Post by Aunche »

episode0x01 wrote: post #9

Not a shocker that corruption ruins things. I guess then the question is how you can design a broadly distributed system that removes the incentives for corruption and minimizes its impact. My guess is that such a system won't be found in capitalism

Since proof of work is inefficient in general and impossible for humans, society can only function with leaders. The problem with anti-capitalist ideology is that it without a healthy private sector, people who are uninterested in public service seek leadership positions there because those are the positions with most "profit." This is why every attempt at socialism has been a complete failure.

Re: Blame Cronyism, Not Capitalism

#70

Post by asow92 »

depaya wrote: post #55
asow92 wrote: post #42

Earlier quoted context omitted.

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

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

How about you? What's your solution?
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