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  • We’re Barely Capitalists

    Posted by Carl from Chicago on July 21st, 2012 (All posts by )

    It is not remarked generally in the popular press but, in many instances, the West is barely capitalist. Let’s just look at the simplest definition of capitalism, per Wikipedia:

    Capitalism is an economic system that is based on private ownership of the means of production and the creation of goods or services for profit.

    How many of the businesses and services that you encounter on a daily basis meet that test? Very few, I’d bet.

    Here’s some hardworking guys that load beer out of a truck. Oh wait – that’s Wirtz, and they are part of what is basically a beer cartel, an Illinois Liquor Distributor. This Chicago Reader article (while a few years old, still basically relevant) calls it out:

    Many say the three-tier system has made distributors a protected class, but distributors maintain that liquor requires special rules to this day… California State University economics professor Glen Whitman, who has conducted a study on the economic logic of the system, pooh-poohs this rationale. “The arguments are in no way specific to alcohol,” he says. “Why aren’t we concerned about people producing counterfeit Coca-Cola? We have sales taxes on all kinds of goods, but we don’t feel the need to create a third party for them.”

    If you are in the media business, your license or spectrum is effectively negotiated with the government. If you are in the health care business, you are tied to a byzantine public / private system deeply enmeshed with the use of government dollars. Energy / electricity / gas is tied to various monopoly service laws, and permitting pushes out many of the smaller entities (“fracking” is one of the rare efforts to escape their grasp, mainly because it came up spontaneously and off the radar). Agriculture is tied to price supports, and many service industries (such as law) use “guild” power to limit new members and entrants, regardless of quality of work claims. Of course schools, universities, police and fire departments, etc… are completely government controlled entities.

    So what’s left? Well you have small scale retail, and restaurants. While they have a bit of government oversight, the government probably plays a smaller role than in most industries.

    I read a recent article about Greece where a visitor actually had hope for the country because, for the first time, people no longer queue for government jobs since the government is no longer hiring, and they need to go to work for themselves. Not only do they need to work for themselves, they need to have a product that they can sell outside Greece because their fellow countrymen have few Euros left to buy anything.

    A recent article I wrote about the power situation in the UK was distressing because the government was effectively moving to virtually a “central planning” model for energy, and this is a Tory (right wing) government. Without a second thought they disregarded the fact that the private sector generally does better than a government imposed model, whether it is done by command or by fiat by limiting permitting and creating bogus incentives on items such as wind power which collapse as soon as the gravy train expires.

    It is definitely a scary thought experiment to think about the “free market” as you walk around a city such as Chicago, and how little of it exists, and how what’s left is dominated by crony capitalism, cartels, and political favoritism.

    Cross posted at LITGM

     

    7 Responses to “We’re Barely Capitalists”

    1. TMLutas Says:

      How would you quantify that? How would you visualize it? This is important stuff, too important to leave to the mainstream media to cover. The only way to be sure it is covered is to figure out how to automate the coverage. So how would you do it?

    2. renminbi Says:

      There is nothing “right wing” about the Conservative Party-it stands for no principles that any conservative or libertarian could discern. What do you do in an election where all 2&1/2 parties stand for supporting a corrupt , rapacious and, incompetent political class?

      Truth to tell the same is true here, though to a lesser extent.

    3. Mike_K Says:

      Speaking of the free market, Harvey Weinstein is well connected.

    4. Sejo Says:

      I would not apply the same political definitions – and geography – to Europe. Not even UK. The only thing conservatives could defend down here is privilege and social stasis, i.e. crony capitalism: richer classes made rich with and by the government occupation.
      The liberal (free market) parties are a different story from «right wing» and «conservatives», and that’s part of the reason most Europeans can’t understand Tea Party and regard GOP as a crypto-nazi lobby. A mere shift in signifier and signified.

    5. veryretired Says:

      The element that so many who are committed to liberty in the broadest possible sense don’t seem able to grasp is how frightening the concept is to a great many people. Freedom of speech, of religion, of movement, and especially economic freedom, terrifies and outrages many who want controls on others for their own protection and peace of mind.

      Much of the collectivist movement is motivated by the very real fear that freedom means never being comfortable or secure in one’s life and work.

      This is not mere sentiment that can be simply dismissed, but true, deep seated emotion that must be recognized and dealt with frankly if the case for greatly expanded freedom is to be made successfully both here and around the world.

      I think that long ago, humanity divided into 2 basic groups. One was the group that wanted to stay in the traditional cave, hunt in traditional fashion, and not go off on adventures or do things differently than in the past. But there was a second, probably smaller group, which was restless or dissatisfied with the traditional in all things, and struck out after different game, or new hunting lands, or began fashioning newer, different tools and weapons.

      That age old separation continues to this day, all around the world. One of the reasons the culture of the US is so different and strange for many in the rest of the world is that we are the decendents of the second group in a way most of the rest are not.

      We often hear of certain groups being self-selected in polls, etc. With certain obvious exceptions, that self-selection applied very powerfully to our population and culture.

    6. David Foster Says:

      Comment made by a young Nazi, sometime in the 1930s:

      “We Germans are so happy. We are free of freedom.”

    7. Carl from Chicago Says:

      I will think a lot more about this topic. Since I live in Chicago, examples of “faux” capitalism are everywhere.