With the not-soon-enough changing of governments in Venezuela and the ouster of Amazon's HQ2 from New York City, there is a renewed rivalry and – at least to my ears – an escalated howling about the tenets and outcomes of capitalism and socialism.
In a reply to Patrick Watson of Mauldin Economics, I tweeted:
Mr. Watson cited a book by Jonathan Tepper and Denise Hearn, The Myth of Capitalism, in which the authors claim that Warren Buffet is "the antithesis of capitalism" and that he "loves monopolies and hates competition". The Amazon summary says the book "tells the story of how America has gone from an open, competitive marketplace to an economy where a few very powerful companies dominate key industries that affect our daily lives."I really like Patrick's newsletter and Tweeter feed but complete disagree here. If, "In theory, capitalism is all about free markets", then the theory is wrong. Capitalism is maximization of the accumulation of and return on capital -- nothing else. 1/ https://t.co/LU1AW2Urzz— Mark Gibson (@VA11independent) February 19, 2019
In what America were these authors living? Railroad barons, oil tycoons, telephone monopolies, government-sponsored enterprises, government-franchised cable companies. Shall I go on? Capitalists love monopolies and hate competition.
As I said in my Tweet, capitalism emphasizes private ownership of the means of production whereas socialism offers social ownership. Neither focuses on demand or the consumer side of markets. Capitalists and socialists aren't interested in the largest quantity and highest quality of goods and services at the least price cost. Consumers and voters should be happy with what they're given because capitalists and socialists know best!
Look – this may be just semantics but unless we understand the fundamental underpinnings of the labels we use, we can't really have a sensible discussion.
Capitalists and socialists don't like markets: they have no interest in "the invisible hand" or consumer welfare. Capitalists want to maximize the accumulation of and return on capital while socialists want to maximize the role of government. Each wants to control and direct the economy; both are heavy handed and condescending toward consumers and voters.
"Crony capitalism" is a tactic within capitalists' tool bag to skew markets in the favor of themselves and their associates. Socialists employ "collective action" – action that is initiated and imposed by the few in power. "Market" capitalism and "market" socialism are sleights of hand. Most people who espouse the "people" side capitalism and socialism are just making excuses for each ism's shortcomings and agendas.
If you really want to help the people, then trust, verify, and enforce markets. Fight the powerful interests – both private and public – that skew and circumvent markets to the detriment of the average Joe and Jo. Trust in the powerful force of uncoordinated yet efficient group action – "consumerism" if you need a label.
It ain't easy. But at least it's honest.
