Sheldon Richman: on corporatism and the semantics of "capitalism" and "free market"

[Winehole23]

The businessmen of the nineteenth century are to be blamed for courting government to gain special privilege…. The late nineteenth century was an era con uously dominated by the assumption that government could be used to achieve various special interest projects, whether it was building a railroad or the development of an “infant industry.”…

Corruption soon followed the new American acceptance of highly centralized political power as a problem-solving device. The process quite clearly began with the American Civil War…. It is true that a time of tremendous building did occur in industry, communication, and transportation across our American continent following the Civil War. But it is also true that the era brought with it the spoilsmen in politics and the exploiters in economic life who were quite willing to work hand in glove in taking the American people for a ride. Boss Tweed and Jim Fisk [pictured here] were all too symbolic of their era….


Never before in American life had the temptation for corruption been so great. Following the Civil War, politicians found themselves dealing in land grants, tariffs, mail contracts, subsidies, mining claims, pensions. The power of taxation gave them power to protect or de[s]troy individual businesses….


The corporation is now and has always been derived entirely from power granted by the state, power directly dependent upon continued enforcement of laws providing it with its special privileges and immunity….


The interpretation of American history which views the latest nineteenth-century businessman as a free enterpriser, while describing government activity as an attempt to restrain laissez-faire, is simply not borne out by the facts.

http://www.thefreemanonline.org/colu...z-faire-there/

We discover that the fortunes realized by our manufacturers are no longer solely the reward of sturdy industry and enlightened foresight, but that they result from the discriminating favor of the Government and are largely built upon undue exactions from the masses of our people. The gulf between employers and the employed is constantly widening, and classes are rapidly forming, one comprising the very rich and powerful, while in another are found the toiling poor.[COLOR=rgb(0, 0, 0)][FONT=verdana,geneva,lucida,'lucida grande',arial,helvetica,sans-serif]
[/FONT][/COLOR]
[COLOR=rgb(0, 0, 0)][FONT=verdana,geneva,lucida,'lucida grande',arial,helvetica,sans-serif][/FONT][/COLOR]As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.

http://www.bastiatins ute.org/2012...f-corporatism/

The managerial state has assumed responsibility for looking after everything from the incomes of the middle class to the profitability of large corporations to industrial advancement. This system . . . is . . . an economic order that harks back to Bismarck in the late nineteenth century and Mussolini in the twentieth: corporatism.

In various ways, corporatism chokes off the dynamism that makes for engaging work, faster economic growth, and greater opportunity and inclusiveness. It maintains lethargic, wasteful, unproductive, and well-connected firms at the expense of dynamic newcomers and outsiders, and favors declared goals such as industrialization, economic development, and national greatness over individuals’ economic freedom and responsibility. Today, airlines, auto manufacturers, agricultural companies, media, investment banks, hedge funds, and much more has [sic] at some point been deemed too important to weather the free market on its own, receiving a helping hand from government in the name of the “public good.”

dysfunctional corporations that survive despite their gross inability to serve their customers; sclerotic economies with slow output growth, a dearth of engaging work, scant opportunities for young people; governments bankrupted by their efforts to palliate these problems; and increasing concentration of wealth in the hands of those connected enough to be on the right side of the corporatist deal.

By “capitalism” most people mean neither the free market simpliciter nor the prevailing neomercantilist system simpliciter. Rather, what most people mean by “capitalism” is this free-market system that currently prevails in the western world. In short, the term “capitalism” as generally used conceals an assumption that the prevailing system is a free market. And since the prevailing system is in fact one of government favoritism toward business, the ordinary use of the term carries with it the assumption that the free market is government favoritism toward business.

Similarly for socialism, Long writes. He thinks most people mean nothing more specific than “the opposite of capitalism.”

Then if “capitalism” is a package-deal term, so is “socialism” — it conveys opposition to the free market, and opposition to neomercantilism, as though these were one and the same.

And that, I suggest, is the function of these terms: to blur the distinction between the free market and neomercantilism. Such confusion prevails because it works to the advantage of the statist establishment: those who want to defend the free market can more easily be seduced into defending neomercantilism, and those who want to combat neomercantilism can more easily be seduced into combating the free market. Either way, the state remains secure.

In sum, the system that most immediately threatens individual liberty is corporatism (with its militarist component) and the word capitalism is too closely associated with corporatism in people’s minds to be useful to advocates of the freed market.

http://reason.com/archives/2012/02/0...-free-market/1

[RandomGuy]

In various ways, corporatism chokes off the dynamism that makes for engaging work, faster economic growth, and greater opportunity and inclusiveness. It maintains lethargic, wasteful, unproductive, and well-connected firms at the expense of dynamic newcomers and outsiders, and favors declared goals such as industrialization, economic development, and national greatness over individuals’ economic freedom and responsibility.

That right there is the achilles heel of free market systems.

Unrestrained capitalism leads to highly restrained capitalism through monopolies, and all sorts of anti-compe ive behavior.

[Capt Bringdown]

no true scotsman

[Winehole23]

beg pardon? was that a comment on something in particular?

[gtownspur]

Random Guy hates reading articles and comprehending them. Good lord. What a total up.

Sheldon is just addressing that defending corporatism (state+business collusion) is defeating the argument for true freed markets, in which govt and economics is seperate. Sheldon Richman is an AnCap left libertarian btw, and his position is that it is state intervention in politics that gives power to corporatism.


Random Guy is not an ideas guy, but a partisan hack on the level of Wild Chodebrah.

[FuzzyLumpkins]

Random Guy hates reading articles and comprehending them. Good lord. What a total up.

Sheldon is just addressing that defending corporatism (state+business collusion) is defeating the argument for true freed markets, in which govt and economics is seperate. Sheldon Richman is an AnCap left libertarian btw, and his position is that it is state intervention in politics that gives power to corporatism.


Random Guy is not an ideas guy, but a partisan hack on the level of Wild Chodebrah.

Thansk for speaking for him. He talks of mercantilism and the relationship between corporations and government. Point to me the quote where he expands the discussion to what you assert.

[DarrinS]

FuzzyLumpkins is not pleased that his bromantic soulmate has been taken to task.

[TDMVPDPOY]

i was waiting for a thead on this topic being discussed

so what are your guys thoughts on capitalism and automation? that is lowskilled work being replaced by automated machines (low costs more efficiency), good workers being kept back while the unskilled are forced to go back to retrain their skills looking for new job....lol industrys who employ thousands of workers who are all going automated or outsourcing...

the western economies or economies of scale need to do something about costs of labour if they wanna attract investment and jobs....

[FuzzyLumpkins]

FuzzyLumpkins is not pleased that his bromantic soulmate has been taken to task.

yeah thats it...

You don't even try to make points anymore your ass has been handed to you so many times now. Now you act like a petulant child throwing out phobic 'slurs?'

[jack sommerset]

yeah thats it...

You don't even try to make points anymore your ass has been handed to you so many times now. Now you act like a petulant child throwing out phobic 'slurs?'

Bromance is not a phobic slur. It's a non sexual relation between two gentlemen. It's a beautiful relationship a women generally can't have with a man. I remember the first time I met my BFF. I knew right fom the start. God bless

[TheSkeptic]

That right there is the achilles heel of free market systems.

Unrestrained capitalism leads to highly restrained capitalism through monopolies, and all sorts of anti-compe ive behavior.

You seem like an intelligent guy but I'm afraid I have to respectfully disagree with this take.

First of all, monopolies aren't always a bad thing.

Secondly, unrestrained capitalism isn't really what's being addressed here so much as it is corporatism.

Third, anti-compe ive behaviour is usually only possible if the government allows it. In a free market system where ethical business practices are encouraged and violations are cracked down on, buyers are usually able to vote with their dollars.

Regulation (law enforcement and fraud prevention) is a good thing. Government interference is something else entirely.

Edit: Well actually we don't disagree on much. Just the question of whether or not the free market is responsible for corporatism.

[Winehole23]

ideal capitalism, like ideal socialism has never yet been tried, and tries to lay down its theoretical inevitability as trump

[TheSkeptic]

ideal capitalism, like ideal socialism has never yet been tried, and tries to lay down its theoretical inevitability as trump

Well obviously to differing degrees but those are the basics of Economics.

[Winehole23]

that "actually existing" capitalism in trend and result perversely resembles its allegedly defunct opponent?

agree 100%

[boutons_deux]

You seem like an intelligent guy but I'm afraid I have to respectfully disagree with this take.

First of all, monopolies aren't always a bad thing.

Secondly, unrestrained capitalism isn't really what's being addressed here so much as it is corporatism.

Third, anti-compe ive behaviour is usually only possible if the government allows it. In a free market system where ethical business practices are encouraged and violations are cracked down on, buyers are usually able to vote with their dollars.

Regulation (law enforcement and fraud prevention) is a good thing. Government interference is something else entirely.

a benevolent monopoly (or cartel) is the rare exception to the rule. Can you name one?

splitting corporatism from capitalism is bogus, since many corps make more money from playing with their capital rather than productive actions. Big corps ARE capitalists. The entire point of a corp is to amass capital.

"anti-compe ive behaviour is usually only possible if the government allows it."

so it's ALWAYS possible AND practiced until the govt makes the POLITICAL decision to try to stop it. That's why you see Repugs almost NEVER start anti-trust suits.

[TheSkeptic]

a benevolent monopoly (or cartel) is the rare exception to the rule. Can you name one?

It's not so much about a "benevolent" monopoly so much as it is about efficiency within an industry. I'm in a hurry so I can't list off specifics, but power generation is an example of a sector where it's more efficient to have one company provide the product rather than a whole bunch of separate ones. Monopolies have had a tendency to form naturally in that industry as a result.

splitting corporatism from capitalism is bogus, since many corps make more money from playing with their capital rather than productive actions. Big corps ARE capitalists. The entire point of a corp is to amass capital.

Yes corporations exist in a capitalist market but they make their money from consumers. If they don't provide anything the market wants or they misuse the funds they're getting, they go bankrupt. "Corporation" simply refers to a specific legal structure here.

Corporatism in the currently popular usage of the term is basically referring to a system where government lets corporations do whatever they want because they fund campaigns and they lobby for the laws they want. Those laws in turn tip the scales in favour of big companies while making things harder on small business owners by extension. That's capitalism on their part but the results on a larger level actually undermine the concept of a free market.

Of course at that point it's just self-interest on the part of the corporation but if the government is passing laws on behalf of these organizations then they're the ones essentially in charge.

The US seems to have elements of both at work here. In practice it's really not an either/or thing tbh.

"anti-compe ive behaviour is usually only possible if the government allows it."

so it's ALWAYS possible AND practiced until the govt makes the POLITICAL decision to try to stop it. That's why you see Repugs almost NEVER start anti-trust suits.

Right. Most businesses are going to look out for their own interests.

But that goes back to law enforcement and ethical practices which is what I was saying earlier. Preventing fraud and limiting anti-compe ive or predatory behaviour is something that government is needed for. Direct intervention usually not so much. The issue, as you're pointing out, is that they won't.

[TheSkeptic]

that "actually existing" capitalism in trend and result perversely resembles its allegedly defunct opponent?

agree 100%

Sorry I missed this for some reason.

Yes the "capitalist" system as it stands at the moment is an awful lot like socialism. I think what's being argued is that this isn't actually a capitalist free market in the popular sense of the term. "Free market" being the key portion there.

[Winehole23]

I think what's being argued is that this isn't actually a capitalist free market in the popular sense of the term.

it's also been argued the era of laissez faire capitalism was neither, but sure

[TheSkeptic]

it's also been argued the era of laissez faire capitalism was neither, but sure

Maybe it comes down to definitions?

Pure laissez faire I don't think has ever been done on a national level but governments have experimented with varying levels of interference. I've never been on board with trying it out in and of itself because it just seems like a bad idea in general.

[ElNono]

True free market capitalism doesn't exist and will likely never exist simply because the actors are entirely unwilling to submit themselves to it. Things like patents, copyrights, intellectual property, etc are things that distort the free market and would necessarily need to be abolished under a true free market capitalism system.

There's also the fact that corruption would be completely rampant on the corporate side also without some degree of regulations. Collusion, bundling, price-fixing, etc are all methods companies still use these days to gain market share and go around strict compe ion.

[Ignignokt]

Ideas are property. Protecting IP is part of protecting life liberty and property.

[Ignignokt]

Besides i'm not an AnCap. Intellectual property laws signal society that it is not the material matter (book, cd, etc) but the idea (novel, music) that gives value.

[Ignignokt]

ideal capitalism, like ideal socialism has never yet been tried, and tries to lay down its theoretical inevitability as trump

It doesn't matter. The moral case for capitalism is superior to any other system.

[FuzzyLumpkins]

Ideas are property. Protecting IP is part of protecting life liberty and property.

Only because the law says it is. An argument could be made against mind control.

[FuzzyLumpkins]

It doesn't matter. The moral case for capitalism is superior to any other system.

Whats the basis of the morality? Morals are subjective anyway. Its superior for yourself.