Corporatism

There is a lot of talk today about what is wrong with the current system. A big argument going around today is that Capitalism has failed us, and of course, as always, we need the all powerful State to save us from our own greed. But has capitalism really failed us? NO.

The first mistake people make is to think that we live in a Capitalist world, we DO NOT. The fact of the matter is, that Capitalism ended long ago

What economists call Capitalism is predicated on freedom of action,something which is hardly present thanks to today’s overbearing Big Brother.
The system we have in today’s s western societies, the EU, USA, Japan…can be better described by the term Corporatism or Crony Capitalism
This phenomenon is an inevitable pathology that appears with any concentration of power, it can only lead to corruption.
The perpetrator of this system is not only the State by itself. It is always acting on behalf and aided by large interest groups, big corporations, the banking cartels, big pharmaceuticals, weapons manufacturers…
The evidence is plain and clear, though not many people seem to make a fuss about it. After all, where do the political parties get their funding from. The big corporations give millions in donations to political parties  simply so that politicians will then defend their interests when in power. Or you might mention the fact that most regulatory bodies,are made up of members of the industry being regulated. Or even the fact that many politicians become bankers.

In sum, we can define the system as a group of people and their friends, the government and their cronies, doing what’s best for them at the expense of the rest of us. The success of business becomes dependant on the political influence of firms, rather than on their ability to correctly satisfy consumers. In this way, the power to control the activities of businesses shifts from us to the political elite. Needless to say, this is a perversion of the worst kind of the capitalist system.

This has nothing to do with Capitalism, quite the opposite; it creates government enforced cartels, it prevents free enterprise from taking place, it creates barriers to entry, and it prevents the consumers from exercising their ultimate power to choose.

The solution is not, like many people call for, to have more “honest” rulers. Corruption and power go hand in hand together. The only way to stop corruption is to reduce the power. This means smaller government

An interesting example today is e-cigarettes. These are electric cigarettes that work with water vapor. They are a healthier alternative to traditional cigarettes. However, big tobacco companies everywhere have been lobbying to ban them. Here in Spain they have already banned using them inside bars, though they only release water vapour. Now the latest thing you might here on the media is that they give you cancer, something I highly doubt.

The reason behind this bad publicity is that big tobacco companies are seeing their customer base diminish, consequently, government, is seeing it’s revenue from the taxes it imposes on tobacco diminish. But AHA!, together they can use their power and influence to stop this. This is a reason why I don’t even bother with “mainstream” media. At the risk of sounding paranoid, I will say I believe it’s highly politically biass. It’s always been a very powerful political tool.

If you think about it, it makes sense for the government to prevent free-market action, and allow some favoured participants to act as a cartel or monopoly, in those industries which are government run, or highly taxed, or any in which it takes part basically.

And there you have it, just another example of crony capitalism in full effect.

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