...our capitalistic political system favors corporations and the wealthy. Wealthy corporations lobby the government and donate to politicians in the hope to get favors in the form of legislation, tax loopholes, and other subsidies (government funding). Many call this “corporate welfare” (ibid.). For example, “[a]nnual taxpayer subsidies to agriculture alone run between $10 billion and $20 billion (and a total of $35 billion, if the higher prices consumers pay are included)” (138).
Some have estimated that there are around $85 billion worth of direct subsidy programs funded by the US government every year, the Federal Reserve recently gave out $9 trillion in “emergency loans” to powerful corporations, and banks have the right to spend money they don’t have due to our fractional reserve banking system.
Three, competition might not always be a good thing. There are “empirical studies establishing that in business environments there is frequently a negative correlation between performance and individual competitiveness” (ibid.). Sometimes cooperation is much more productive than competition. Additionally, rather than being motivated to attain external rewards (profits) or other external goals (defeating the competition), we are often more productive when we do what we enjoy or value for its own sake.
Moreover, cooperation is often more productive than competition.
h/t The Barefoot Bum
Gray is confusing Capitalism with Corporatism. In a capitalistic society (which ours is not) companies need to stand on their own without government assistance, bailouts, subsidies, favorable legislation etc; Then they cannot take advantage of the coercive power of govt to reach their goals but must instead rely on the voluntary actions of its customers.
ReplyDeleteRick, I'm not sure if Gray is confused or not (though he may be). I distinguish between capitalism and the free market. Capitalism is what we have now (though you can call it whatever you want) and it has always existed with the support and favoritism of the state.
ReplyDeleteIt does all depends on how you define "capitalism", and I think you and I may disagree on that (I can't speak for James Gray, of course).
Fair enough, I suppose the term "free market" is a better characterization of an economy that exists without state interference, as there seem to be multiple definitions of capitalism, some of which do not include free markets. Still, I hesitate to call America a capitalism. I'd describe it as a "semi-socialist, semi-fascist mixed-economy welfare state"!
ReplyDeleteI am James Gray, and thank you for drawing attention to my discussion on capitalism. Much of what I wrote there is actually based on a review in a business ethics book.
ReplyDeleteI discuss the definition of capitalism in my post and I think the historical ideas of capitalism mostly trace to Adam Smith, who did not believe in a laissez-faire economics. As a result of this and ordinary use of the word I don't define "capitalism" as laissez-faire economics although such an economic system could be a paradigmatic example of a capitalistic system. There are also elements of socialism in our system. There's gray area between both of these ideas. My interest is not to define "capitalism" as an ideal that everyone must agree to. The word is used by people in a messy way and I too use the word in a messy way. I don't think the word should be expected to be non-messy.
The USA is said to be "capitalistic" in the sense that it is one the most capitalistic systems in existence and the actual problems our system faces can sometimes indicate problems with capitalism.
Some objections to capitalism are objections to laissez-faire economics, but some objections apply to other forms of capitalism as well.
The first objection here involves the role corporations and the wealthy play in politics. I don't see how laissez-faire economics could prevent the wealthy from having a lot of power in politics, even if corporations didn't exist. This might not just be a problem with capitalism. I think every system on Earth has suffered from this problem.