What is Crony Capitalism vs Real Capitalism
A discussion between economists Russ Roberts and Michael Munger.
What is Crony Capitalism vs Real Capitalism
What is Crony Capitalism vs Real Capitalism
A discussion between economists Russ Roberts and Michael Munger.
If you have not seen the video, it shows that every war since the 1898 Spanish America War including WWI and WWII were started by either false stories and/or criminal activities and events done by those in our own government to make it look as if we have been aggressed upon. Even the Civil War was precipitated by wealthy special interest and with the Union military antagonizing the south into defending itself. The first shots fired by the south were in self- defense.
Why? War is very profitable for those who make weapons and the supplies even things like food for the soldiers. Over 139 million military combatants have lost their lives in just the 20th century, of course, most of them certainly not the children of those profiting from the wars. They are of course at Harward or Yale with college deferments.
Socialism; what is it anyway?
Socialism can be explained as the number of total social programs enacted, times the financial costs to taxpayers; the more costs associated with the programs and their total numbers, as a percentage of gross domestic product, the greater the level of socialism. So it’s a sliding scale depending on how many total social policies the government has enacted.
In simpler terms, the larger the government is, the more taxes are needed to pay for all the social programs and the more socialist your society would be considered. The lesser the number of taxes and social programs, the less socialistic your society would be considered. Many economists suggest, the larger the government and greater costs of the required taxes, the less per capita production there is; which would be an inverse relationship. However, we’re not here to debate the ideologies. We’re here just to understand what it really is and means and define the term socialism.
Governments usually provide various services that are an expense to society. Although many deem socialism and communism as antonyms, this author prefers to look at socialism as a percentage of the economy where government services and products are provided, to the percentage provided by the private sector production. This is not perfect for a variety of reasons but can be used as a generality but surely don’t use it to compare different countries. There are many things that make countries wealthy and there are many things that make countries poor. If we knew what these were, we would have likely fixed the poor countries already. Lots of theories abound, but never take them a fact. Knowing what is in the best interest of the majority is a fool’s errand.
The primary deference between communism and socialism is private property rights. When there are no private property rights, the government then owns everything, and everyone worked for the government, that is communism. Whereas Venezuela, with its private-public partnership as many called it, is a mixed economic model as economist call it. It is a combination of a robust government sector and a substantive private sector, trying to work in harmony. This is a problem for a number of reasons, as Venezuela is experiencing but once that a discussion for another day.
The bigger the government is without property ownership being held by the State, the more socialistic. Over the last 30 years or so, the government has been buying up more and more real estate so once homes, lands, businesses, commercial buildings, and rents are owned by the government, that is communism with everyone works for the government. Under socialism, private property rights are still in the hands of theCitizens, it’s just that the property and various activities are taxed to payfor the government, The more total taxation as a percentage of total productiveoutput, GDP, the more socialistic your society would be.
As an example, many may not consider prisons and jails to be part of socialism, because it is a needed entity yet the fewer people incarcerated the less socialism and fewer government costs there would be. Of course, the more people you have incarcerated the larger the correction system must be to manage, feed, cloth, shelter and try to educate the prisoners.
Socialism can be visualized in this authors opinion as a sliding scale. With minimal government (libertarianism) to the left and communism, total government to the far right. The Democratic Party would be right of the Republican Party “theoretically”, but in reality, they are very close to one another and much closer today to the far-right communism than to the far-left, libertarianism.
This is one of the great misunderstandings as to which political ideology is far right and which one is far left. As an example, fascism appears to occur when the costs of government get too large in relation to the amount of production or GDP, the gross domestic product as I noted previously. The major fascist nations of Germany, Italy, and Japan during WWII all were highly socialistic with high levels of militarism compounding the size and costs of government. To enforce all the taxation as GDP wains from the expansion of the government sector, those in government enforcement become harsher and penalties such as incarcerations and fines stiffer as wages drop and taxes rise. Basically, the government is squeezing the profits out of the private sector to pay for the increased costs of government. Additionally, in the 20thcentury, with the advent of fiat currencies put in place around the world,governments could simply print more money to pay for the additional costs of an expanding government, but this debases the currency without increased productivity causing the devaluation of the currency which results in eventual price inflation, the rising of manufacturing and consumer prices. Where this author believes government central planners make a huge mistake, is crediting the production by private companies contracting with the government, as part of the GDP calculations when a bridge, jet fighter or a school is an expense to society. As an example, if all children were primarily educated via home computers, the costs of building schools could be eliminated. I am not saying this is a good or bad idea, its just an example of identifying costs and expenses associated with the government where the physical school itself is built by some private sector construction company but actually paid for by taxes. Today, we add the costs of building the school as GDP when it is an expense to our society making it appear that our society is more productive than it really is. A society cannot be more prosperous by increasing expenses as our society has seen since the 2008 Great Recession, with the cost of the Federal Government alone reaching $4 trillion annually with $1 trillion of that being printed with interest charges passed onto the taxpayers.
To learn some more about it go to wikipedia and evaluate my analysis with theirs. https://en.wikipedia.org/wiki/Socialism
We must teach our children that all human and individual rights are inalienable.
We must teach our children what inalienable rights are and that they cannot be justly usurped.
We must teach our children that liberty is better than involuntary servitude.
We must teach our children that they, as individuals, are more important than the state and the common good.
We must teach our children that giving to others is one of the human actions that create joy and happiness.
We must teach our children that taxation is an economic form of involuntary servitude.
We must teach our children the protection of individual property rights is more important than the redistribution of wealth to serve the common good.
We must teach our children that self-defense, both from criminals and from the tyranny of the State is an ethical responsibility to both themselves and to others.
We must teach our children that their ethical behavior is paramount to a civil society.
We must teach our children that honesty and integrity are fundamentals of ethical behavior.
We must teach our children that aggressions such as force, coercion or fraud are unethical behaviors that give rise to the lawful concept and use of self-defense.
We must teach our children that the use of force and coercion are both reasonable and lawful rationales to assert self-defense.
We must teach our children that self-defense is sometimes a legitimate and necessary means to deter force and coercion.
We must teach our children the concepts of Natural Law and the Non-Aggression Principle (NAP).
We must teach our children that equal justice under the laws of human nature is a necessary foundation for a civil society.
We must teach our children that all human beings have the same individual and inalienable rights unless and only if they try to usurp the rights of others through aggression, coercion or fraud.
We must teach our children that the non-aggressive actions by others, even if they offend them must be tolerated and that tolerance is a virtue.
We must teach our children that their non-aggressive behaviors and communications may offend others, therefore consider carefully your actions and what you say before taking them or speaking.
We must teach our children to work hard and smart. To work with others under the various ethical conventions, such as the Law Merchant, our world offers and to attempt to seek and achieve those things that benefit mankind.
We much teach our children the Law Merchant and how and why it came to be.
We must teach our children to stand up for what they believe and do not intellectually back down from those who do not wish there to be a civility.
We must teach our children that not all those that seek positions of authority can be trusted to either be truthful or just.
We must teach our children that wisdom does not always come easily or quickly. That they must work hard to both gain the experience and the knowledge to achieve it.
We must teach our children the patients is truly a virtue and that others will often fail to choose it.
We must teach our children that the use of the phrase “We must teach our children” at the beginning of each sentence is redundant and unnecessary.
That the historical stories passed down to us are often skewed to protect the improprieties of those involved and that we all fall short of perfection.
That our actions, sometimes even the simplest can have profound effects on others and the world.
That the planet is not a trash can and that pollution is simply stuff being in the wrong place; make sure it gets in the right place.
To be skeptical of those religions that grant special privileges or rights to those who believe in their doctrines, over those that do not.
That morality is subjective and is how you choose to ethically live your life. That others have the right to chose how they ethically live their lives subject to however the NAP, not harming others or their property through the aggressions of force, coercion or fraud.
To love and to care for and about others and to be honest with both your heart and your actions.
That hurtful words cannot be taken back once they are stated and that withholding them is often a sign of wisdom and virtue.
Alfred Lord Tennyson; “Tis better to have loved and lost than never to have loved at all.”
John Adams; “You have rights antecedent to all earthly governments; rights that cannot be repealed or restrained by human laws; rights derived from the great legislator of the universe.”
Thomas Jefferson; “A wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.”
George Washington; “Government is not reason, it is not eloquence, it is force, like fire it is a dangerous servant and a fearful master.”
So, the challenge to parents and educators; teach your children what is important and teach them the truth. I have a feeling that some of you may need to brush up a little on both.
We have not been a capitalist society now for many years and crony-capitalism, the term the media has adopted, is really a disguise for what is in reality, one or a combination of the three primary entities, socialism, fascism and communism, referred to collectively as Statism by some economists.
There are several methods involving government revenue to create massive levels of redistribution of wealth required for a fascist system to come into existence. Whereas Communism uses direct ownership of the means of production to get the money to the centralized political point, Fascism uses taxes, fines and regulatory fees to achieve this. What makes a country more socialist or fascist depends primarily on the level of militarization and the police state apparatus; the later requiring oppressive levels to effectuate the collection of the higher levels of taxation, regulations, and controls to maintain the flow of money from the Citizens via the redistribution of wealth into a centralized political point, a/k/a the U.S. Treasury Department in the case of the United States. It is then divvied up to special interests based on political influences such as campaign contributions, lobbying, and fund-raising efforts. Then you have the massive bureaucracy administering and overseeing all the redistribution of wealth schemes.
Many believe because there are private sector companies involved in our system we have capitalism. Perhaps to some small degree, but our money isn’t even free market derived anymore and many of our most prominent corporations are to one portion or another government contractors, negating the positive effects that capitalism would have on our society. The more the government intervenes in the market, the more the effects of capitalism are negated. Hence, the term in The Wealth of Nations “unfetters” free markets, referring to capitalism, meaning lacking government interventions.
Grant you that the law and corporations are in collusion, but without the laws mandating the various social policies, the corporations would be much less powerful because it is the government interventions that grant them the benefits or subsidies. We have to have trade and free enterprise, but we are better off without the government interventions. Every social democracy around the world is having essentially the same problems the United States is having because all the nation-states are essentially doing the same things. We have long understood why socialism, fascism, and communism (Statism) don’t work, yet it is the nation-state that promotes it, surely not capitalism in and of itself. A true capitalist would never want government interventions, but statists love them.
One should always keep in mind that libertarian capitalism promotes self-discipline and the nation-state promotes authoritarian discipline. You must decide which one do you want to teach your children and that the enemies of liberty are almost always those granted privileges or benefits by the nation-state.
Take the survey and find out where do you stand on the issues: The Nolan Survey
The Myth of the Rational Voter by Prof. Bryan Caplan http://www.youtube.com/watch?v=XKANfuq_92U&feature=youtu.be and the Myth of the Rule of Law by Professor Hasnas http://faculty.msb.edu/hasnasj/GTWebSite/MythWeb.htm as well as my assessment, The Democratic Capitalist Illusion, http://groups.google.com/group/HarrietRobbins/topics?hl=en of the ability of uneducated individuals participating in any form of democratic process dealing with political economy is highly unlikely to produce a desirable outcome. The key point being, uneducated in the area of political economy. People are not necessarily too stupid to vote, they just have not been taught how to be a good Citizen. They have not been taught to know the difference between a good and bad law, yet we are taught to go ahead and vote anyway with Party campaigns to get out the vote. The politicians are also lying and deceiving us as to what the will and will not do when elected to office. For those that are knowledgeable about the policial economy, we recognize many of the lies, because we know they can never deliver on the promises they make. To the uninformed, it emotionally influences them to vote for the wrong candidates. Hense why to the two major political Parties try so desperately to keep out any significant third Parties, especially the Libertarians whose sole purpose is the dismantling of political power through the minimizing of taxation.
As history has shown us time and time again, the majority of people will flat out vote their own individual rights away for social benefits, until they wake up one day under a totalitarian regime that the majority cannot dismantle or defeat. This is when atrocities such as mass exterminations and civil wars occur.
Couple that with the various religious influences from people who swear they are the children of God and you have what we historically called Government, none of which have worked well or greatly benefited the majority. We drown ourselves in fictional literary works, movies and sport just to bare the financial and physical oppression to both our minds and spirit.
Add in the $20.5 trillion of Federal Government Debt and the combined debt of all States, Counties, and Municipalities of $3.098 Trillion, the total debt comes to over $37 Trillion.
“Since the day of Alexander Hamilton, the United States has never defaulted on the Federal debt.” The private debt is another issue and the defaults during the 2008 housing collapse and subsequent credit collapse should tell you something.
That’s what we budget-watchers always say. It’s a great talking point. One that helps bolster the argument that default should not be an option in Washington’s latest debt limit showdown.
There’s just one teensy problem: it isn’t exactly true. The United States defaulted on some Treasury bills in 1979 (ht: Jason Zweig). And it paid a steep price for stiffing bondholders.
|States & Local Debt||$1,184.0 State||$1,914.6 Local||$3,098.6 Total|
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