You think that the cronyism,

erikjay — Wed, 08 Oct 2008 13:49:16 -0600

You think that the cronyism, corporatism, mercantilism, monopolism, and suppression of competition is CAPITALISM at work? That the current malaise is because of the FREE MARKET not working?

You need to read more. And travel around the world a few times.

Markets haven't been "free" ... well ... ever, really, not 100%. However, they were once relatively free, and that's why the West, America in particular, grew so dramatically in the 19th and early 20th centuries. Once the bankers met at Jekyll Island with the politicians, it was all over for "free" markets. You may wish to research this a bit. Interestingly, it happened during the administration of beloved liberal icon Woodrow Wilson – you know, that enlightened Democrat who threw newspapermen in jail for editorializing against World War I.

On the one hand, you correctly diagnose the pernicious relationship between big biz and big government – but on the other, you continue to call that Leviathan "capitalism" or the "free market." Nonsense. Here's another study topic for you: It was the government, even more than the homebuilders, that pushed the unrealistic notion that everyone should be "a homeowner." Lenders were raked over the coals for "redlining" and other practices that, with fairly good accuracy, predicted who would or would not successfully carry a mortgage. They were pressured to be "more democratic" and make these riskier loans, for "fairness."

Now those loans are used as evidence of "predatory lending." Ludicrous. It was, again, an example of a once-relatively-free market being skewed by government diktat.

Another bit of trivia for you. This canard about "the rich getting richer and the poor getting poorer" is an accurate statement to make about static systems, like socialist countries (India, most of Europe), where people usually die in the same economic class into which they are born. This is clearly not the case in our dynamic society, where people move up and down the "economic quintiles" all the time. People get rich, people go broke, and the cast of characters is always changing. That's a good thing, okay?

Finally, your "let it collapse" line is a statement right out of classical ... capitalism! In a capitalist, free enterprise system, there are no bailouts, there is no corporate welfare, there is no cronyism, there are no "legal" monopolies, there is no intervention one way or another with market actions. And those "actions" are the millions of independent decisions made every day by individuals, from you to me to the men in the gray flannel suits.

The analogue to "let it collapse," of course, is "let it be" – specifically, during the rebuilding phase we are entering. No tax money for corporate bailouts, and none for personal bailouts either. In French, it's ... laissez faire. And it includes the much-needed creative destruction that casts off the old (what doesn't work anymore) in favor of the new.

I recommend Schumpeter, von Mises, Hayek, et al, to disabuse you of some of your misconceptions. Let us call things by their right names. What we have seen is not, by any stretch of the imagination, capitalism or free enterprise. It was the ultimate in insider trading, and is yet another cogent argument against vesting too much power in the State. (Robert Nozick's "Anarchy, State & Utopia" is another great book on all this...)

Oh, you'd probably enjoy the creative destruction recommended by Murray Rothbard, too. Plus he's funny.

Diatribune - capitalism - Comments

You think that the cronyism,