The Libertarian “Crony Capitalism” Nonsense

Shooter: “All capitalism is crony capitalism, always and forever.” – Well, did WordPress come about because of socialism? Aren’t most of the things you talk about, even the medium you’re on, came about from capitalism?

All civilizations have to have some form of economies to raise capital. No matter how socialist you get, there’ll still be capitalism in there. USSR was not fully Communist but was socialism with state capitalism. Making money is just what nations do. I don’t see how GDP and other forms of wealth are inherently crony capitalism. Sorry, but you don’t get me on this one.

Any normal capitalist country, leaving out various forms of actual socialism and Communism, will generally speaking have an unbelievable amount of crony capitalism.

According to Libertardians, the whole problem with their glorious capitalist system is the fact that government is involved in it. Once the government is involved in the capitalist economy in any way, shape or form, apparently we have some form of “crony capitalism,” whatever the Hell that is. I say that because I have no idea what it is that this term is even referring to. According to Libertardians, if you completely eliminate the state from the picture, then and only then do you have real true capitalism. Anytime you still have a state in the picture somehow, the system is not actually real true pure capitalism. This is some sort of a joke. Their crazy “pure capitalism” has probably never existed, does not exist now and no doubt will not exist in the forseeable future.

If crony capitalism means corruption, well of course capitalism generates corruption. It generates a phenomenal amount of corruption. It does this because the nature of capitalism is to cause a lot of corruption. The corruption is built right in to the system. It’s not a bug. It’s actually a feature! And the more capitalism you have in a country, the more corruption. Countries that went neoliberal and privatized everything typically saw tidal waves of corruption exploding very quickly. They also saw huge organized crime syndicates pop up almost overnight.

Corruption is generally seen at the state level. If it’s in business, it’s called something else. Corrupt officials are usually just stealing from the coffers of the state and sticking the money in their own pocket. How does state corruption help business? It doesn’t do much of anything to business. So how is state corruption crony capitalism?

Fraud is also ubiquitous in capitalism, and the more capitalism you have, the more fraud you have. In fact, fraud, ripoffs, stealing and cheating is so huge of a problem in most capitalist countries that the state typically has to set aside a lot of law enforcement resources to keep a handle on this situation at all. How is the state going after crooked businesses for fraud crony capitalism? That’s not helping business, it’s putting them clean out of business.

They make all sorts of stupid examples of this crony capitalism such as:

The government picks winners and losers in various industries. Of course the government does not pick winners and losers in industries. The market does that.

Companies go to the government and have the government make legislation to help them and hamper all of their competition, resulting in monopolies. This is laughable. The government never does this, ever! Monopolies result because the natural tendency of capitalism is towards monopoly, and illegal monopoly at that.

Businesses go to the government and pay them off so the government will do the businesses all sorts of favors. Actually, the only favors the government does for any of these businesses is in refusing to regulate them! So they are paying the government not to do things. Someone needs to tell me how keeping the government from regulating your industry is crony capitalism.

The government sets minimum wage laws which affect business. Sure, but they usually affect business in a bad way, or at least Libertardians think so, as they oppose any minimum wage. How is the government limiting profits by imposing minimum wages crony capitalism? The state’s not helping the businesses – it’s hindering them.

Universities pick only one vendor, limiting competition. An example given was that a university offered only the local DSL company to students for broadband. Supposedly allowing cable too would allow competition, but as cable and DSL don’t compete anyway, I don’t see how this would help competition. Universities hire vendors for all sorts of things, and I assume for most stuff, they choose a single vendor and go with them. Why buy your textbooks from 50 different companies? Why buy your food from 20 different food companies? And why not pay one company for Internet rather than two companies? It’s so much easier to go with just one vendor. Incidentally most branches of the government do this exact thing.

Government places barriers to entry in industries, vastly reducing competition. Laughable. Apparently this means this zoning laws, business licenses, liquor licenses and whatnot. For instance, we have some corner markets here where I buy my food. No doubt those lots were zoned Business. But to get into that industry, you are going to need a lot of capital. The local store is being sold, and it goes for $1 million. Local gas stations also go for $1 million. That’s the price that the market set for them. The government did not set that price. The market did.

I guess Libertardians would like to get rid of all zoning laws so everyone and his uncle could open their own little “corner markets” on the sidewalks or right here in my apartment complex. That’s not going to work. You need to buy a license, and if they want to sell booze, they need a liquor license. You can’t have everyone opening up a “corner market” out of their apartment. It’s nuts. There would be so much abuse, it’s incredible.

In my town I assure you there is no shortage of corner markets. There is nearly one on every major corner if you include the gas station marts. There are plenty of drug stores in this town. Plenty of supermarkets. Lots of auto repair joints. Plenty of car dealerships. Taco shops and carnicerias everywhere. A number of pizza joints. A small number of nice small restaurants. A number of insurance companies which apparently compete with each other. A small number of bars. A number of different competing banks, including a credit union that gives better customer service than any of them. There are a few different chain auto parts stores in town.

All of these businesses compete on price, service, goods available, quality of product or work, and all sorts of things. The competition is apparently quite ferocious everywhere you would expect it to be. Even the car repair joints seem to compete on price, which is amazing (the Mexicans are cheaper, but they do not do as good of a job).

There is no industry or business in this town that does not have enough players, lacks competition, or needs a lot of new players in the market. There are no monopolies or cases where a business is the only one of its type in town. I don’t understand why we need a ton of new competition. What for? The market’s full up as is. There’s not a lot of room for new players in town, and everyone is competing like maniacs as it is.

Neither business licenses, food inspections, liquor licenses, the cost of purchase of store (set by market and not by state), taxes, nor any of these things are acting as any sort of barrier to entry to business in my city. I might add also that this city is very rightwing and has probably set things up to be as business-friendly as possible. That’s not necessarily a good thing, but it does lower the barriers to entry even more.

I have nothing against WordPress. It is actually possible to be a halfway decent capitalist company, and they seem to be doing that. But they eliminated their tech support, which I thought was pretty shitty.

4 Comments

Filed under Capitalism, Corruption, Crime, Economics, Government, Higher Education, Law, Left, Libertarianism, Marxism, Neoliberalism, Organized Crime, Political Science, Scams, Socialism

4 responses to “The Libertarian “Crony Capitalism” Nonsense

  1. Jason Y

    http://rs2kpapers.awardspace.com/theory7db3.html?subaction=showfull&id=1083547923&archive=&cnshow=headlines&start_from=&ucat=& (Libetarianism and the Restoration of Slavery)

    That quite ignores the historical and material causes of the rise of “big government”.

    The initial reason that capitalists required a “big government” was to protect themselves from each other.

    Without regulation, the capitalist class creates a “Hobbesian” world of ruthless and unlimited predation. You need not “out-compete” your competitor if you can simply kill the bastard before he kills you. Late 19th century American capitalism and modern Russian capitalism was/is not very far removed from that…blowing up your competitor’s factory was/is an “easy” way to “increase market share”.

    http://rs2kpapers.awardspace.com/theory4b32.html

    http://rs2kpapers.awardspace.com/theory.html

    • Corporations are replacing Crony Capitalism in the U.S. with probably worse results.

      • Jason Y

        Libertarianism will never become rule of law in the US. It’s a pipe dream. Even Wal-Mart and all the other capitalist pigs out there won’t have it. They make money cause the “big government” is protecting them.

  2. Übermensch

    “Why buy your textbooks from 50 different companies? Why buy your food from 20 different food companies? And why not pay one company for Internet rather than two companies? It’s so much easier to go with just one vendor.”

    Actually, this is exactly what is happening in the NHS right now. Supplies were opened up to ‘market forces’ to ‘improve choice’ and so now every hospital has people paid to play around with pricing to get the best deal on, say, paper puke buckets. They now have to scour their 20-odd different suppliers and play off all the variables to get the exact same product they could get from any of the others, or from the nationalised NHS supplies, which did exactly that (plus in-house stuff) but centrally.

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