Published: Monday, Sept. 23 2013 12:00 a.m. MDT
In our economy we privatize profits and socialize losses. Corporate America
wins, taxpayers and consumers lose. Since half of all political
"donations" come from the top 1/10th of the 1%, the people who fund our
politicians are the winners. The other 99-9/10th of us are the losers.
The writer asks: are subsidies to private enterprise a kind of backdoor
socialism? I hope I understand his question. If I understand it, the answer
would be no. Subsidies to private enterprise are nothing new. Such occurred
during colonial times. Mainstream economics justifies them with externality
arguments, i.e. the product or service being subsidized has a benefit to greater
society which the manufacturer or provider cannot charge. This is a long
standing argument in economics and is definitely not socialism.I can
tell you Marx had a very different view of profits. There isn't room her
to get into that, but Marx asked a question as interesting as yours: in a
system such as ours where transactions involve the exchange of things of
equivalent value, where do profits come from?The writer raises
The new "American Way". Take from the poor and give to the rich.
So stop giving welfare checks to farmers and make employers pay a living wage.
All this can be done by bringing back unions.
I think we do a disservice to proclaim that America's economy is simply
capitalist or socialist. Believing America is supposed to be totally
capitalist, for example, encourages people to think of government programs in
black-and-white terms (e.g., support for schools, bad. De-regulation good), and
it biases people to not recognize how incentives and subsidies have benefitted
America's economic prosperity.The Internet, for example, was a
government initiative, built and paid for by the government that in 1992, thanks
to a bill sponsored by Senator Al Gore, congress allowed businesses to leverage
for profit. Without the government's development of the Internet -- a
massive subsidy -- Google and Facebook wouldn't exist today. Even the
revival of Apple wouldn't have happened if Apple didn't pursue iTunes
and leveraged the Internet for its music and entertainment businesses. The same could be said of American government's construction of
railroads, the national highway system, the Louisiana Purchase, or wars in the
Middle East to protect 'our' oil sources (though this last subsidy may
not be seen so positively). Do subsides and incentives distort the
market? Yes. And some distortions can often be good for America's
The writer has stumbled upon the definition of "crony capitalism."
It's a system where government, and not consumers, decide the economic
winners. These winners then subsidize the political careers of the politicians
who made them. It's a corruption of capitalism that too many confuse with
real capitalism. This is what's destroying our economy, not
"unfettered" capitalism. Nothing will revive our economy until crony
capitalism (such as "too big to fail") is dismantled and replaced by a
market system free of favoritism and subsidies. To do that, corrupt politicians
will have to be sent packing. I don't see that happening anytime soon.
"If government contributes to the profit by subsidizing the costs through
tax deals, wage supplements, or consumer incentives or in any other way, the
government is taking money from the taxpayer to give to the business
operation." This is called farming.
There is a system that lies between capitalism and socialism, it is called
fascism. Fascism destroys capitalism and leads to socialism. Obamacare is a
great example of this process.
Mr. Neale, you nailed it.That's the new American version of
capitalistic socialism: Socialize the expenses; Privatize the Profits.
The multi-national corporations have lots of profits and lost of cash. They
operate in many countys that do have socialized medicine and still profit.
Geez KDave, you and I subsidize 60% of the nations healthcare now, don't
you think we should ask those being subsidized to participate? You talk about
individual responsibility. Until the ACA is fully implemented you won't
know one way or the other how it will work but one thing is for sure, for the
majority of Americans the previous system was unacceptable. Stand down and let
democracy work, unlike your Congressman.
Unregulated Capitalism does not work. It cannot survive without competition.
Competition cannot happen without free enterprise. Free enterprise is dead with
monopolies. We have returned to gilded age. Where o where is Teddy?
@marxist – “Marx asked a question as interesting as yours: in a
system such as ours where transactions involve the exchange of things of
equivalent value, where do profits come from?”They come from
all the added entrepreneurial talents (e.g., vision, risk taking, management,
business knowledge, coordination, etc…) that brings a product to market.
This is something Marx never understood (along with human nature in
general) and is why like so many other “isms” he has some insights
into half of reality (e.g., labor theory of value) but is as ignorant as a
schoolboy regarding the other half.And this is not to just pick on
Marx – same is true (as one example from the other end of the spectrum) of
someone like Ayn Rand and her Objectivism.@KDave –
“Fascism destroys capitalism and leads to socialism. Obamacare is a great
example of this process.”I think DN could post an article on
the mating habits of dung beetles and someone would find a connection to, and
reason to criticize, Obamacare.
Exxon made $9 billion profit last quarter. The Republican House just voted them
$4 billion subsidy. Why do Republicans feel the need to subsidize Exxon?
Those with their hands out don't understand the concept of "risk".
They want a guaranteed wage. They want the government to force "others"
to buy the product of service that they provide. They want the government to
"force" those who have taken a risk to give away their profits to those
who will not take any risk. In other words, they want FORCE to rule
in their lives. Are they so ignorant of history that they don't know what
happens when force becomes the governing factor? Have they no empathy for the
millions of destroyed lives when government redistributed wealth to themselves,
with a very small amount trickling down to the pawns who spilled their blood so
that the dictators could rule and reign?Take a long hard look at the
many wealthy Democrats in Congress. How did they make their money? What did
Harry Reid do to make his millions? What did any of them do? They passed laws
that made them rich and then they have the gall to point their finger at those
who actually took risk to make a profit.Shame on the freeloaders who
covet the wealth of the risktakers.
Conservative will whine all day long about people welfare, let them
starve, let them die, yet;will fight tooth and nail for Corporate
Welfare.When Republicans promote "Free Market Capitalism" by
taking away Corporate Welfare and special tax incentives -- For:the vast Military Industrial Complex, the Oil industry, Pharmaceutical and Healthcare Insurance companies, America's
Farmers, Food Stamps for minimum wage workers and let the WalMart and
FastFood Billionaires run their own stores without them, Let them
compete on a free market, unbiased, and may the best product for the best price
win...Until then -- Republicans are the biggest Corporate
"Socialists" on the planet.
To "SEY" the term croney-capitalism is just a distraction. You should
call it what it truely is. Fascism. Remember that the government doesn't
give people money without attaching strings to it. The government then can use
those strings to control your business. Just look at the banking and health
insurance industry. They are being controlled by socialist leaning policies,
but are still privately owned, that makes those industries fall under a fascist
control.To "ugottabkidn" there is no such thing as
"unregulated capitalism", that would be anarchy. Capitalism requires
that there is a government entity to enforce regulations, contracts, and
property rights. Government should not be involved with ensuring a business
remain open.To "LDS Liberal" we should go back to a
capitalist sytem. As U2's Bono recently pointed out. Capitalism is a
highly effective way of helping poor people climb out of poverty. Socialism
doesn't work. As Brigham Young said, socialism will just turn people into
beggars asking others to give them food. That is what your ilk have turned
corporate America into, beggars asking for government handouts. If you want to
know why, it is because liberals/progressives give government money to their
@Mike Richards – “Take a long hard look at the many wealthy
Democrats in Congress. How did they make their money? They passed laws that made
them rich…”@Redshirt1701 – “That is what
your ilk have turned corporate America into, beggars asking for government
handouts.”What country are you guys living in? If you’re
going to bash Democrats at least do it for the right reasons (giving away free
stuff to the little guy).For what you two are talking about we need
look no farther than the Elephant Party. Republicans are THE party of corporate
welfare and crony capitalism. Does anyone not remember the no-bid Halliburton
contracts?And if that’s too far in the past (perhaps you think
now with Tea Partiers in charge things are different) all we have to do is look
at the 2013 Farm Bill. If that is not giant farming conglomerates and corporate
food companies getting billions of dollars of “free stuff” from the
government, not to mention legal protection for wrong doing (hello Monsanto), I
don’t know what is.
To "Tyler D" you need to look beyond the political parties. The
Democrats are just as guilty as Republicans are for marching us towards
socialism. The Democrats and Republicans that are doing this to us are all
Progressives, and the only difference between the two is the rate of travel.As far as the Democrats are go, you forget Solindra, GM, GE, and other
companies that get free money from the government just because somebody is
either well connected or because a politician is afraid of what happens if a
company closes shop.The Tea Party Republicans are not in charge of
much of anything. They are slowly growing in numbers, but they have to fight
the Progressive R&Ds. If you look at the 2013 farm bill, the Tea Party was
opposing it or thowing ammendments into it that the establishment hated.The question is do you want to continue the march towards socialism or
do you want freedom?
@Redshirt1701 – “The question is do you want to continue the march
towards socialism or do you want freedom?”I try not to get
hung up on labels, especially single word ones so vague & loaded they are
virtually meaningless.I would like to live in a country where the
game is not rigged in anyone’s favor – a meritocracy where everyone
has an equal shot. But I also want to live in a country where we are not blinded
to the fact that many people don’t start out on equal footing and one that
has enough compassion to try and help those (e.g., education) with
no-fault-of-their-own disadvantages.Conversely, there are too many
people in this country who are “born on third” and then think
through their own brilliance & hard work, they hit a triple (and ridicule
those are not standing on third base). I want to live in a country
that that protects our environment and promotes fair justice and protection from
the worst of human nature (which is often the most pernicious in the amoral
corporate setting).What kind of country is that?
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