“Corruption Is Just a Symptom, Not the Disease”

Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Professors Daron Acemoglu and James Robinson explain Corruption Is Just a Symptom, Not the Disease / To end global poverty, stop tolerating national institutions that serve greedy elites and suck poor countries dry, on 12/5 in the Wall Street Journal.

(Cross-post from my other blog, Outrun Change.)

Corruption is the highly visible symptom of much deeper issues.

The real problem?

The lack of an operating justice system. The lack of accountability. The lack of a free press that can actually get away with challenging those in power – that means reporters don’t get beat up, thrown in jail, or killed when they irritate political leaders.

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Protectionism – Can someone explain to me how that can be moral ?

Protectionism is the idea that the government can protect me from foreign companies that want to sell me something at a lower price that the government thinks is fair. As a result, I pay more than I would otherwise.

Professor Don Boudreaux published a letter to Wall Street Journal editor explaining why protectionism is immoral. Here’s his letter, quoted in full since it is an open letter to the editor,with the key paragraph expanded into bullet points: (more…)

Hotest new action figures! Kronies! Get ‘em now! You too can pretend to be a Krony Kapitalist!

From the promo:

Heads they win. Tails you lose.

Forget the rule book, they make the rules

Wannn’a compete. No! You’ll be rejected.

Get the Kronies! They’re Konnected!

 

 

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3 of the common myths about capitalism

  • Pro-capitalism = pro-business
  • Capitalism generates unfair distribution of income
  • Capitalism is responsible for the financial crisis and great recession

Not true. Those three (false) myths disposed of in this video:

 

That is from Professor Jeff Miron from Harvard.

A few highlights from the video:

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Crony Capitalism is the reason we won’t find any incandescent bulbs on the shelves

As of the start of 2013, it is illegal to manufacture or import 40- and 60-watt incandescent light bulbs in the U.S.  Last year the 75-watt bulbs were gone and the 100-watt the year before. The last of the smaller bulbs will be off the shelf.

Then you will only be able to buy more expensive bulbs that may or may not last a lot longer.

Why?

It isn’t to improve efficiency or save consumers money. That’s the excuse.

Blame crony capitalism. The ban is courtesy of businesses seeking favors from the government and the government happily granting said favors.

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Graph to illustrate Thatcher’s comment that socialists want the poor poorer provided the rich were less rich – Part 2

Previously mentioned a graph that illustrates the idea that socialists

would rather the poor were poorer provided the rich were less rich.

Here is a revised graph:

inequality graph 2

This is a much busier graph. Like the earlier graph, it is from Dave Poling and is used with his permission. Here are a thousand words to describe his graph.

It shows the same relationships –

In a generation, the poor become as well off as the middle were a generation earlier. The middle gains a lot and is as well off as the rich a generation earlier. And yes, the rich become really rich.

Under socialism, the rich, middle, and poor all get worse off.

An addition to this graph is the government and cronies. I call the latter group the crony capitalists, those companies and individuals who make their business thrive by lobbying the government and getting special treatment. They do quite nicely under socialism, thank you very much.

Since there is so much going on here, let’s look at the graphs in more detail.

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Simple explanation of cronyism – the difference between “pro-business” and “free market”

Perhaps we could rephrase that as the difference between “pro-consumer” and “pro-single interest”.

National Review Online discusses how thrilled some self-serving lobbyists are that a certain deal in Washington will benefit members of their focused trade group. It’s a good deal because their members will make money off the deal. See Sometimes, Being ‘Pro-Business’ and ‘Free Market’ Are Opposed.

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Lots of blame for the financial crisis of ’08 falls on the federal government

There is a huge amount of blame to be spread for the Great Recession that started in 2008. While the recession technically ended four years ago back in June of 2009, most people in California and lots of charities here are still feeling the effects.

I see exquisitely little discussion of how intentional federal policies created the distortions that led to the financial crisis. An op-ed in the Wall Street Journal by Phil Gramm and Mike Solon help explain why much of the blame belongs to the federal government:  The Clinton-Era Roots of the Financial Crisis.

To make this non-partisan, I’ll point out that the flawed policies from the Clinton administration were ratified, continued, and extended by the Bush administration. Not to worry, both parties have worked lots of overtime to earn their share of blame.

While you can argue on the proportionate blame between the two parties, I’ll point out that regardless of the allocation you determine, 100% of that particular allocation falls on deliberate federal policy.

Initial efforts to persuade private pension plans to fund low-income housing failed. The administration forced (more…)

Capitalism and Imperialism are *not* the same thing

Voluntary trade between market participants at negotiated prices is not even close to the same thing as forced trade at forced prices where one person has a major power advantage (usually military dominance). In other words, capitalism is NOT imperialism.

Check out this video:

 

Some of my favorite lines from Dr. Stephen Davies:

Are capitalism and imperialism variations of the same thing?

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Competition is good for everyone else but I need special privileges – The difference between pro-free enterprise and pro-business

There is a dramatic difference between saying you are pro-business and saying you are pro-free enterprise or pro-capitalism. Do you want lots of competition for yourself or do you want special treatment while everyone else faces competition?

Milton Friedman explains the difference:

 

A few of my favorite comments: (more…)

Free market capitalism or crony capitalism – where you stand depends on where you sit

Small startup organizations favor free and open competition.

A change in attitude can hit when the startup becomes the industry standard. Maybe at that point, it would be better to put roadblocks in the path of your new competitors. Might even be worth calling on the government to do some blocking for you.

We are used to seeing the really big companies asking governments to look at some practice of their big competitors. Won’t provide any examples, but you can think of many headlines over the last few years of one tech company or another tattling on someone else, hoping the regulators will slow down their competitors.

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Looking for the cause of poverty? It isn’t capitalism. Look for some other Cs – corruption, collusion, and cronyism

It’s not capitalism that has crushed millions of people into the dust of poverty across Africa and many other places and times around the world. Capitalism lifts people out of the dust.

What keeps the poor in grinding poverty?

Writing in the Wall Street Journal, Daniel Henninger’s column Capitalism’s Corruptions discusses the real causes of poverty (more…)

Crony capitalism defined in one sentence

Crony capitalism consists of

economic transactions where profits are the result of being close to power, rather than serving the customer.

That is from How Did He Get So Rich? Think tanks Vs. Crony Capitalism, by Alejandro Chafuen, writing at Forbes.

Distinction between pro-business and pro-free enterprise hits front page of the Wall Street Journal

Front page article on 3-29-13 quotes the new chairman of the House financial services committee responding to a questioner during his first campaign years ago. The question was whether he was pro-business:

His reply?

“No,” the candidate replied, (more…)

Crony capitalism kills off eagles and other raptors

When a government picks one industry over another and gives the favored one special treatment, it is called Crony Capitalism.

That is the same description used when a government goes after one industry for breaking the law and turns a blind eye to another industry doing the same thing.

That is exactly what federal policy the California AG are doing about migratory birds and protected raptors that are killed by the so-called ‘clean energy’ industry.

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