The Worst Form Of Capitalism
The Right frequently calls the President a socialist? The left protests that it just isn’t true. Is it?
Socialism, fascism and communism all share belief in some large degree in government control of the means of production. They all stand in opposition to capitalism and are in many cases opposed to democracy. What is missing in most definitions is the redistribution of income, which is probably what most users of the term think of when they use it.
The less pejorative term is statism or central planning. It is in the central planning of the economy that Hayek feared most in The Road to Serfdom, which he believed inevitably led to tyranny. Hayek’s critics claimed that not all governments were the same as the fascists just because they used similar powers.
I tend to side with Hayek. When a scientist’s theories conflict with reality they adjust the theory (at least they used to). When an ideologue’s theories conflict with reality they seek to adjust reality. That requires intense government power and at least the very real potential for tyranny that Hayek feared.
I accuse this administration of excessive central planning of the economy, and a poor understanding of the consequences. While he warns of the dangers of capitalism which are real, he ignores the dangers of central power which is much slower to correct its excesses. Smart regulations can contain capitalist excesses, but what is to correct the excesses of central power?
If the answer is the ballot box, then I am disappointed. The leading GOP candidates are all big government conservatives. There are some worthy potential GOP candidates that are not in the race. The GOP options in spite of their many shortcomings at least claim a bigger commitment to capitalism than the sitting president. Perhaps it is just a matter of degrees.
Capitalism like its antithesis, socialism, has a few different flavors. There is the Main Street Capitalism which is focused on the actual production of the goods and services that the market determines it wants. There is the Wall Street Capitalism which focuses more on the financing and capitalization of the producers. When the financial sector gets too big resources are often wasted on complicated structures rather than the actual use of the capital itself. We just witnessed the result of such a period and it seems to be correcting itself.
But the worst form of capitalism is crony capitalism, where business seeks value in government power rather than market service. This is similar to the mercantilism of previous times. Perhaps the only difference between crony capitalism and fascism is which party has the upper hand in the relationship between government and business. When you get in bed with the government somebody is gonna get screwed.
Crony capitalism is to capitalism what National Socialism (Nazism) is to socialsism.
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