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The Problem of Capitalism and Conservatism

The thesis of Adam Smith’s Wealth of Nations is that when people and companies compete, acting in their own self-interests, society reaps the benefits.
Competition drives innovation and invention.  Competition drives down the costs of commodities, making them affordable. 

The problem that Smith did not foresee is that capitalism naturally deteriorates.  The competitions within a free-market resolve themselves.
They do not continue indefinitely.  Eventually, there are winners and losers.  The Wal-marts and Microsofts of the world come to dominate their
industries by squashing competition.

When sectors of the economy come to be dominated by monopolies or small groups of closely held corporations, the benefits of competition cease. 
The pharmaceutical oligopoly collectively decides to stop pursuing cures in favor of maintenance medications.  Top software companies stop selling
programs and start licensing them for use in exchange for fees that never end.  Food companies load products with additives and chemicals that
are outright harmful to the public health.  This is what capitalism looks like in the later stages of its life cycle.  It is hard to deny that such a thing
happens.  We live here.

And so, the government gets involved in the economy.  The first steps the government takes are to preserve capitalism and to hold companies
accountable for harm they may cause.  Antitrust suits are brought to break up monopolies.  Consumer protection laws are passed.  Bureaus are
set up to review and approve new products before they can be sold.

These are necessary evils.  When the government regulates the economy, it ceases to be a free-market.  The benefits derived from competition
decrease.  But without such regulation, the benefit from competition decreases anyway, for the reasons going before.

Worse, these measures eventually fail.  Antitrust litigation is tied up in court indefinitely by corporations with resources to stall them indefinitely
(e.g. Microsoft).  The Food and Drug Administration’s product approvals are bought-and-sold like commodities.  Automobile manufacturers
calculate the legal costs of distributing a faulty product and choose to go that route instead of making a safe, quality product.  Planned
obsolescence becomes the norm.

What then will we do?  The conservative ideal of “if it ain’t broke, don’t fix it” falls short, because it is, in fact, broken.  Is there a way to put
the proverbial genie back in the bottle?  Can super-corporations with power and resources greater than some countries really be torn down
or split up to restore competition?  It seems unlikely.

Can capitalism be saved?

Jarrod

  Antitrust suits are brought to break up monopolies.  Consumer protection laws are passed.  Bureaus are
set up to review and approve new products before they can be sold.

 Can super-corporations with power and resources greater than some countries really be torn down
or split up to restore competition?  It seems unlikely.

Can capitalism be saved?

Jarrod

Can capitalism be saved? I suppose that would depend upon if there is to be competition within said capitalism or a single dominance.

We all are old enough to remember when "they" broke up ATnT?

And we all... those with stocks... got 7 'baby' bells?

That did not last for it was not too long before Verizon and ATnT (again..yet different) now, once again have the telecommunications market fairly dominated, nationwide.

Yes, they can break them up... but there is always a work around.

Can capitalism be saved? I suppose that would depend upon if there is to be competition within said capitalism or a single dominance.

We all are old enough to remember when "they" broke up ATnT?

And we all... those with stocks... got 7 'baby' bells?

That did not last for it was not too long before Verizon and ATnT (again..yet different) now, once again have the telecommunications market fairly dominated, nationwide.

Yes, they can break them up... but there is always a work around.

The Telecom industry is weird.  It's really a utility (like water, power, etc) in every sense that matters, but somehow is not regulated as a utility most of the time.

It is probably the one industry where we need to stop trying to preserve competition (i.e. capitalism) and just treat it like the other utilities.  Which is to say, the service is provided by state or local government at prices determined by lawmakers.

Jarrod

Your water isn't provided by the city?

I think... the people are not what is pushing us that direction. 

But the people are what is not pushing against the direction we are headed.  I have pondered why that is and I have come up with several different reasons, none of which are very satisfying.  The best that I can come up with is that they, the people, are largely ignorant of where we are actually headed.

We are in a place and time where the power lies primarily in the hands of the "special interests," which is mostly those mega-corporations and conglomerations, along with a handful of foreign governments.

I agree with you on that.  But I don't believe that it has to be that way.  Again, I think it is mostly ignorance.  If you asked most people if they think that we ought to be more like Russia, China, Cuba or Venezuela, they would say no.  They just don't understand that is where the Left is taking us.

As for the people... they are easily fooled.  Tell them you'll give them things they want, give them a convenient excuse to do nothing, and they will do nothing to prevent the overthrow of their government and country.
I find it strange that huge companies whose life is tied to a capitalist economy of supply-and-demand are actively pushing our government AWAY from capitalism.  I can only guess - they think that they will still be able to control the government, after they have made it all-powerful?  Of course, that will NOT be how that shakes out.

So, so true.

As for capitalism, it is the best economic system we have, by far.  But it periodically requires some refreshing, kind of like Thomas Jefferson's Tree of Liberty. 

Again, so very true.

During the Industrial Revolution, it ran a little amok, and we ended up with people being worked to death and owing their life to the company store.  We added agencies to protect workers and consumers, broke up Standard Oil and US Steel, and capitalism has thrived for a hundred years.

I am enough of a libertarian to believe that it was not so much the government agencies that allowed capitalism to thrive.  I think much of that would have worked itself out, although I can't really prove that or provide the evidence which would support that.  I also think that the fundamental problem lies not so much at the feet of those "huge companies whose life is tied to a capitalist economy of supply-and-demand"; rather, I think that the biggest problem lies in the enormous size and power of the bureaucracies that consume vast amounts of resources and operate with almost no real oversight and essentially answer to no one.  Beyond that those same bureaucracies represent one huge block of voters for the Left. Why would anyone expect the workers in those bureaucracies not to vote for the political party that is the primary source of their very existence?  It is the size of government that is the major culprit in the push towards the totalitarianism of the Left.

It was Mussolini who famously said, "All within the state, nothing outside the state, nothing against the state" and "The state reserves the right to be the sole interpreter of the needs of society". There is not a democrat in power who does not hold to both of those.  And they call republicans fascists.

Greetings Jarrod~I like this thread and would that you would expand on it more and more. Also, with your permission, I would like to post this on my Reddit forum. giving full credit to you.

You're welcome to it.  What's your reddit?  I'll follow it.

Good for you.

I wish I could have a well, but I live in a desert and at a bit of elevation as well.  I inquired about having one drilled and they told me it would cost more than my house, with no guarantee of ever getting any water, much less anything drinkable.   

City water here is affordable and reliable.  It turns out, this bit of socialism... works.

It's fine to be idealistically against socialism.  Actually, I am too, believe it or not.  Socialism is terrible when used as the rule, or the standard way of doing things.

For that matter, most ideological systems aren't very good when applied to everything.  I think it's much better to take things on a case-by-case basis.  The solution to all the problems is not the same. 

As for the Telecom industry... I think it's a lot more similar to the City providing water than it is to, say... the market price of a bushel of oranges.  So I think that solution might fit here.

The current system of having it owned by a handful of companies isn't ideal.  I think it was you that pointed out the Bells?

Jarrod

Your water system works great until the water is gone.  But that's a desert problem. 

As far as the Telecom industry, that is largely dead.  The cable/fiber internet companies are the new Telecom.  Landlines are now largely done over VPN through fiber or CATV.  Cellphones already have quite a bit of competition, the internet companies are the ones with some sort of Utility like monopoly on territories.

I want anti-trust enforced, but it would be against media companies, banks, and big tech primarily.

When it comes to energy and internet, it becomes hard to have competition.  That is why electrical utilities are regulated, and probably why internet companies outside of big cities should be.

Your water system works great until the water is gone.  But that's a desert problem.

For us in Arizona, it's a California problem.  California takes most of the water from the Colorado River to grow avocados and broccoli.

As far as the Telecom industry, that is largely dead.  The cable/fiber internet companies are the new Telecom.  Landlines are now largely done over VPN through fiber or CATV.

Cell towers are the new big ticket capital item, along with the land they go on.  My old church rented the space for a cell tower to Verizon for $6K a month.  Not bad for a 15x15' square that was just covered in rocks.

Cellphones already have quite a bit of competition, the internet companies are the ones with some sort of Utility like monopoly on territories.

Unless things have changed in the last few years, there are really only 2 companies in the US that own virtually all the cellular infrastructure.  The government has required them to sub-lease space/data on their network to other companies, giving the appearance of competition.  But really, whenever you place a call on any network, some of the money generated is going to one of those 2 companies.

I want anti-trust enforced, but it would be against media companies, banks, and big tech primarily.

Big Tech tops my list, as well.  Google, Microsoft, Apple, and Sun all need to be bopped...

When it comes to energy and internet, it becomes hard to have competition.  That is why electrical utilities are regulated, and probably why internet companies outside of big cities should be.

Yes, whenever the entry costs into a market are prohibitively high, there is no competition, and capitalism doesn't work without competition.

Jarrod

Yeah, good post. I don't know how it's hard to see the truth of it.

I would add that the original intent of Capitalism was wrapped in the concept of "checks and balances." As you say, it turns the cultivating of basic needs into man vs. man warfare as opposed to us against the elements like the early pilgrims. So no matter how great our stuff is, all it is is weaponry we need to battle against another opponents rather than an actual opportunity to smell the roses. I mean who has a car break down on the way to work and is so grateful we don't have to use horse and carriage anymore? What does it matter? Other people -- your opponents -- have it, therefore you need it to compete against them.

We'd have robots and AI waiting on us by now, but the problem is, it's produced but then someone has to OWN it, so rather than it being something that actually helps everyone, automation means you're just obsolete because the feudal lords don't need you anymore.

And again, as you say, when Capitalist just created new kings and ridiculous consolidations of power, then the intentions of the founding fathers got defeated. We're back to feudalism, effectively.