Crony Capitalism vs. Free Markets
Many of our readers are probably aware of the excellent work our friend Jonathan Tepper does for Variant Perception (VP), a financial research boutique that really does bring a unique perspective to the table*. Jonathan (with co-author Denise Hearn) has just added a new book to his résumé, which is going to be released on 12 November: The Myth of Capitalism (MoC) – Monopolies and the Death of Competition** (a link to the official site is at the end of this post).
Jonathan Tepper and Denise Hearn: The Myth of Capitalism, an excellent plea for more competition and free markets.
MoC deals with a subject that has increasingly captured the attention of political and economic observers in recent years: the growing quasi-monopolistic powers of a small (and shrinking) number of large corporations that have seemingly succeeded in exempting themselves from competition.
They are often aided and abetted by government imposing regulations certain to suppress competition from less well-funded upstarts and smaller firms. At the same time governments are creating loopholes which only the biggest established firms with international operations are able to take advantage of.
Don’t get us wrong – we have no problem with loopholes as such: to paraphrase Mises, they allow capitalism to breathe. Problematic is only that the benefits granted to the most powerful players are denied to their potential competitors; we wouldn’t want to see these loopholes closed, we would like to see them extended far and wide.
Restoring Consumer Sovereignty
MoC is not focused on questions of monopoly theory***. The book is actually quite a page turner, at the same time informative, entertaining and infuriating. It is primarily concerned with practical problems and discusses what might be done to overcome them. The proposed solutions may be open to debate, but the book’s main aim strikes us as being well beyond it: namely the restoration of consumer sovereignty.
Many on the left are looking at the growing concentration of economic power from a Marxist perspective, believing it to be the inevitable outcome of what Marx called the “anarchy of capitalist production”. But this is erroneous: if not for misguided government intercession on behalf of established industries, even the largest companies would be facing the harsh winds of competition – and we would all be better off for it.
In an unhampered market economy an incumbent enterprise could not just sit on its laurels, regardless of how well-funded it was. Companies would certainly not be able to afford to run rough-shod over their customers by worsening the quality of their services or by imposing censorship (the latter has become a nasty habit of large social media platforms and powerful payment service providers).
Not only a handful of well-known internet giants in social media, search and retail have become quasi-monopolies or oligopolies: airlines, beverage companies, banks, health insurers, beef producers, pesticide makers, corn seed manufacturers, high-speed internet access providers and media companies have all joined the trend toward extreme concentration.
As Jonathan points out, entrepreneurs who manage to …read more
Source:: Acting Man