The great genius of capitalism

Is that it expects human beings to behave like human beings. Other systems tend to fail because they behave as though human beings are ants lacking only some one to give them direction.

 

And it is also because human beings behave like human beings - that Capitalism needs to be controlled.

 

Every society has laws against fraud and the like.
It isn't capitalism that needs to be controlled it is human beings. Sadly the only thing available to control human beings are other flawed human beings. Capitalism or as Adam Smith put it, "The Wealth of Nation's". Is an attempt to explain how human beings react freely in an economically free society.

 

Fraud like what ? - not sure what you are referring to.

Of course capitalism needs to be controlled by humans - who else is going to control it - Lions Tigers and Bears ?

Fraud laws are one method which is used to control capitalism - laws made by humans. This is just one of many things that need to be done to control capitalism - and Adam Smith agrees -

"Smith was not an advocate of laissez-faire; the phrase “invisible hand” occurs just once in The Wealth of Nations; and he did not oppose all state interventions in markets. Indeed, he positively advocates a range of them, from specific forms of taxation to regulation of the banks"https://www.ft.com/content/6795a1a0-7476-11e8-b6ad-3823e4384287

It is a historical and human nature imperative that unrestrained capitalism - in the initial phases - helps to create free and fair markets -however, after the honeymoon period - it then sets about to destroy free and fair markets.

 

Yet no Monopoly can form without the connivance if the government. In spite if reams of anti trust legislation, during we went from at least 60 auto makers down to five during the government caused and driven Great Depression to three by the mid sixties, to two plus Musk's hobby today, all with the government's blessing, same sort of shrinkage happened in the defense industry. Government could have and likely should have stopped most of those mergers but in fact forced many of them under the auspices of the National Recovery Act. The NRA was eventually found to be unconstitutional but by then the damage was done.

 

By not allowing government to morph it into corporatism.

 

Partially True but not really. Monopolies can and do form without any input from Gov't - other kinds of monopolies are formed by Gov't.

What the former monopoly wants is a lack of Gov't action - it is this lack of action which continues its existence - and that is the situation we now find ourselves in. That is what I refer to when I say "The Status Quo" - that the Establishment - both Red and Blue - maintain the status quo with respect to this particular question you have raised.

How about one or two examples ? Dow -Dupont merger ( and we could point to hundreds of others of course). I choose this one because I know the industry well - have worked in many aspects of the industry - and my main degree is Chemistry.

This should never have been allowed. - In one chemical sector in which I worked - used to be 9-10 different companies. They would vie for the attention of good sales people. When you sold something - making the company more profit - you got paid.

Now there are 2 in this one sector - essentially owned by the same interests - they screw every penny out of the salesperson. If you don't like it - you only have one other choice - but they do the same thing. Finance personnel take courses in it - no kidding. In a fair and free market you can't get away with this. Competition keeps the wages - and in particular the salespeople - high due to artificially decreasing labor and wage competition.

This is connected to the number of people we allow to immigrate. More decreases labor competition -but lets keep things at level one.

Assume the salesperson makes 100,000 extra in profit for a year - money that he made the company on top of what he/she was already making the company. If the salesperson gets his cut say half - which is normal in cases where there is competition - 50K.

What does he do with that loot ? - he spends it in the local economy. In the case where he gets a one time 4000 bonus .. where does that other 46K go ? It goes to some nameless faceless shareholder - who many not even live in the Country never mind spend in the local economy.

In this way some of the cream is siphoned off the milk. Multiply by 100 and you get skim milk. - and that is just for starters - many games are being played.

Last - when we say "without the aid of Gov't" - we must keep in mind that it is the Oligopolies who pull the strings of the elite bureaucrats and politicians. This influence is a given everywhere - but to what degree does this influence penetrate ?

That is a laughable question in our case - it is a "Pay to Play" system .. if you are an elite bureaucrat/politician - and you Play - along with the Establishment game - and most importantly - not try to change the rules of the game - you get paid - and everybody knows it.

Did you think that Hillary was paid 250K a pop for 15 min Wall Street Banker function for her good looks and charming personality ? - of course not - was for a job well done.

 

Exactly - Oligopolism/Monopolism - and other nasty things.

 

This is where we have our major disagreement. You believe corporatism is the result of corporate activity I believe it is wholly driven by the administrative state. We are simply not going to see eye to eye here. There have been precisely two real monopolys appear in this country. Standard oil and AT&T those are also the only two the government ever saw fit to break up and the latter was wholly the creation of government.

 

It starts with allowing government the power to grant privilege, and ends in full blown corporatism/ fascism

 

It is a function of both - this is what you are missing - hence why I use the term "Oligopoly-Bureaucracy Fusion Monster".

You seem to think capitalism - if left alone - will not result in Monopolism/Oligopolism - and this is completely false.

That Std Oil/ATT was the only company broken up - should tell you something .. and while those were monopolies - things work somewhat differently these days.

I gave you an example ? did you now understand the subtlety of some of the unfair practices - it can get complicated. Far easier to just let things slide.

Do you not understand that there is big money influence in our political and bureaucratic system ?

 

Of course there are unfair practices. The government established most of them to prevent it's captive corps from having to deal with more flexible and smaller competitors.

 

Logic leads one to believe laissez-faire leads to monopoly or a collective of non-competitive corporations.

Adam Smith’s work is brilliant, but has flaws, for one, believing a sense of nationalism would drive businesses to contribute to their respective nation. But this is looking through the lens of time, before there was today’s concept of global economy.

Being a realist, Capitalism and its nemesis Socialism are dead. We live in the age of the mixed economy which is a conflagration of concepts from both. It’s deeper than that, many of the ideas we have now (especially Capitalism) would be completely alien to Smith.

The notion of human beings being human beings is more related to communism, or primitive anarchism if you want to get weird. Capitalism has always relied on governmental power to function, as the very concept of private property can only be protected by government, or the monopoly of violence. Do we really want to gift an entity like Amazon a monopoly of violence?

That is not as absurd as you might think, in the era of America which was as laissez-faire as anything (late 19th century to the depression era) corporations did have their own mercenary forces. Blood was spilt when labor asked for better wages or working conditions. Is this really a model worth instituting?

The ironic concept of modern radical libertarianism is the hatred for democratic government for its violence of taxation, while thinking monarchistic corporatism would better use militaristic violence.

 

Why do you keep ignoring the role of the Oligopolies - big money interests ? It is like you have some kind of mental block.

 

They get plenty of privilege along the way to becoming oligopolies, tax incentives, regulation that eliminates competition, gov contracts, FED market interventions, SEC leniency etc

 

I believe they are entirely driven by ideology; which you know casts blindness on facts which disagree with itself.

 

Yes - it is from both sides - they are interconnected- it is the way it has always been - throughout history- something that has been well studied.
as has the distribution of wealth part of the equation.

Our situation is unlike any the world has ever seen in many respects .. similar in others. There is a very small group that owns a whole lot.
Google State and Street .. or Bank of Mellon - and you will see 2-3 Trillion under management.

Then - you will see 32 Trillion "under custody and administration" https://en.wikipedia.org/wiki/State_Street_Corporation

Same amount in Mellon = 64 Trillion ... Thats Bill Gates x 640 .. how come these others are not on the list ?!

These are the main families - that run the show. That is just 2 banks - what these folks happen to have under "custody and administration".

We have agreements with other nations .. they have to give us certain info - but it is not reciprocal - we don't have to provide. The US is the largest tax haven.

At the end of the day - someone has to run things .. lets hope they do not run it into the ground - They are not doing what needs be done from my perspective -but that is another story.

 

An interesting phenomenon - this partisan blindness - sometimes near religious in nature. Not talking just here but - in general - there is a pattern - and it can be on either the red or the blue side ..

They have been fed some narrative - and they believe it - info that conflicts with that narrative causes a response - denial - thought avoidance - followed by demonization of the messenger via strawman and other fallacious tactics.

Just like you see with fundamentalist religious adherents - information triggers the fear response - "That path leads to the horrible place - eternal torture - for ever and ever" - best to avoid that thought ..

 

The problem with capitalism is its not supposed to mix with certain industries, like healthcare for example. When a company begins favoring profits above patients, they have truly failed the sector they are in. You're talking about civility, not capitalism.

 

Without the privilege granted them in the form of the FED, they would have imploded in 2008.

 

+1 spot on!

Socialism/Communism sounds good in theory but it is not realistic.

 

Note the administrative state is the is lead element. You either contribute to the system and not just in taxes either or they will come after you. Both WAMU and Microsoft found that out the hard way. Mrs Clinton got that pay day because wall street knows who butters the bread.

 

Under capitalism sir a company that does that goes broke in short order. Under a bureaucratic regime they get subsidized.

 

Very true, but every economic system requires some degree of control and regulations -- establishment of the rules of the road if you will. The difference with socialism is that the owners of the economic system are the same people that make the rules, you know like the fox guarding the hen house.

 

True that's why we have a Govt...but the question is what sort of Govt is the best way to do it? So far the only one that really seems to work is the Constitutional Republic like ours....when systems go away from that we tend to see massive poverty, and less freedom