Does Capitalism Really Result in Corporatism?
After watching Dan Hannan's speech to Gordon Brown and before that seeing some speeches by Ron Paul, they use the argument that a true free market where the government does not subsidize or favor any industry allows competition by rival companies to control the power of large companies. The fact that we have subsidized so many of our large industries and have all but nationalized them (auto, steel, railroad, oil, airline, etc) could possibly be the reason why monopolies and oligopolies have such a trend to form. The moment we get the government involved in handouts to corporations is the moment they lose their independence and their means to survive in a real market. They often become reliant on that handout as the strings attached to the subsidies set in burden and curb its efficiency. In example, General Motors, just look at the labor laws that have hindered it so badly. It's no wonder so much of our production industries have moved over seas. There's a saying that if you subsidize it, you get more of it. Take the food service industry as a point of contrast. There are many large corporations, they are domineering, but not dominate. Other than McDonald's, we have places like Wendy's, Burger King, Jack in the Box, Whataburger, Sonic, etc to compete and McDonald's hasn't always ended up on top. The competition has been plentiful enough to ensure that McDonald's is not the only fast food service that is widespread throughout the country or the world.
Now most socialists will refer to the Gilded Age of America from the 1870s to the late 1890s. However, did the Guilded Age really come from having no government involvement or regulation? The railroad industry was hugely subsidized by the government and in turn so was oil and steel. Those three industries became huge monopolies and oligopolies that fixed prices, paid criminally low wages, and had pitiful working conditions. In a way, the government became interested in expanding these industries for the benefit of expanding its control over national resources. Also, the government blocked endeavors to naturally limit these monopoly influences and keep them at least in some form of check. When the government stepped in and subsized Standard Oil and the railroads, they squeezed out any capacity for private competition to these rising companies. Sure the finese of people like Rockefeller and Carnegie were brilliant and cruel, but one can't help but see the role that the federal government played in business from 1866 to 1932. Many Republicans at the time were for 'cooperation' between business and government. This in itself clearly suggests that the government had never truly had a laisez-faire attitude and that government has been heavily involved in business since the end of the Civil War, largely pushed through by President Grant.
Within itself, I cannot help but see that corporatism and dystopianism is the opposite of capitalism and its certainly contrary to its goals. For capitalism to work, there's got to be competition in the private sector. Blurring the lines between private and public (as well as the lack of some regulation) may have been the root cause of the path towards corporate dogma as a posed to real capitalism and this can understandably lead people to believe that this lack of regulation requires more government control in the economy. But I think that this might actually be a misled conclusion.
So perhaps government really is the problem. Anytime politicians meddle with the work of professionals, it becomes diluted and twisted. Red-tape is the barrier of efficiency and in these times efficient markets are what we desperately need.
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Originally Posted by Simon Cashmere
