Comment by jfengel
Comment by jfengel 20 hours ago
Weirdly, right at the moment the US economy is tanking because of severe departures from market fundamentalism. By the people who most claim to be pro capitalism.
Comment by jfengel 20 hours ago
Weirdly, right at the moment the US economy is tanking because of severe departures from market fundamentalism. By the people who most claim to be pro capitalism.
> Capitalism means all the wealth goes to those with the most capital, while free markets means the wealth flows freely in all directions
I don't understand this distinction, why wouldn't capital accumulate under free markets? The freer the market the more capital accumulates.
In a freer market that today you would have to pay a massive toll every time you went to the grocery store, because the road owner has monopoly on that route, that would lead to much more wealth accumulation.
In economics perfect markets mean that your company that raises spherical cows has no moat against others doing the same. If you do something to gain profits to become rich someone else joins the market to compete those profits down to zero. This reduces inefficiency and makes everyone rich.
Deregulation is sold as getting closer to this, in reality it means the money collects wherever the market breaks down, monopolies, network effects, externalities, concentrated special interests, middlemen, oligarchies, gangsters, landlords etc.
When all of the capital ends up in a small number of hands, the market ceases.
Each capitalist tries to corner the market, but if they succeed, the resulting monopoly isn't a free market. In theory a competitor arises, but it takes only an instant to shut it down and restore the monopoly.
>I don't understand this distinction, why wouldn't capital accumulate under free markets?
It would, which is why businesses support deregulation - not because they believe in vigorous competition for the sake of consumers, but because they want as little friction and consequence standing between themselves and oligarchy as possible.
A market in which the wealth "flows freely in all directions" is socialist, not capitalist. "Fair" markets are regulated, and by definition not free.
To me that is the biggest win in public discourse from capitalists: conflating markets with capitalism, as if free markets could only exist under unbounded capitalism. Which, as you say, is incompatible. Capitalism does not want free markets, nor foster free markets, the best end result for a capitalist is the abolition of a market under the control of a monopoly.
Markets are fundamental, and a natural result of human socioeconomic order. Capitalism not at all.
There's no departure from market fundamentalism, the belief in shareholder value being supreme is still very much the current Zeitgeist.
As much as the USA's administration is jerking around with trade, the fundamental principle of what governs any corporation is still market fundamentalism: returning value to shareholders, nothing else.