I wanted to reflect on how Mr Trump’s running mate – JD Vance (he came out of business and he worked in venture capital) – can nevertheless hold often anti-market views. (See his praise for the anti-trust stance of the Biden administration.) At best, Mr Vance seems to be a sort of “small business” champion with a dislike of bigness for bigness’s sake, conflating size with lack of competition. (Anyone who can understand the “Austrian” insight that competition is a dynamic process through time, and appreciate what Joseph Schumpeter called the creative destruction of capitalism, can see the flaw in this sort of prejudice.)
The problem is not Big Business per se. The problem is when businessmen lobby Congress or whoever for favours, such as for tariffs, exemptions from rules applied to others, tax breaks, subsidies, appointments of their people into government for leverage, cheap loans from banks, etc. Anti-trust is absurd and ripe for arbitrary assaults on property and freedom of contract because one can be guilty of “anti-competitive” conduct regardless of whether one charges higher prices than a rival, the same price or a lower one. Without an objective measure, it is a wrecking ball. (Insider dealing suffers from the same problem.)
That’s the sort of issue where Mr Vance needs to focus his anger. But has he? Has he made these points? Has he, for example, pointed out that central bank QE and the holding of interest below the natural rate creates “zombie” corporations, reduces investment into productive enterprise and reduces productivity, and hence wage growth ? Has he understood, and denounced, how finagling interest rates by central banks and politicians has distorted the capital structure of the West, and done so down the centuries, with ruinous consequences? Does he realise that all this monetary madness calcifies business, protects big firms, encourages financial engineering over investment, etc?
If Mr Vance can answer my questions about QE, for instance, with a “yes”, I would like to see evidence of it. (Commenters: please do so!) Because there is a long and honourable tradition of radical politicians – and I mean real radicals, not just people who claim they are – doing this. In the 19th century, in the UK, liberals and progressive political activists such as Richard Cobden and John Bright denounced artificially cheap money, as well as mercantilism. They saw those who want to clip the coinage, and impose tariffs, as enemies of the Common Man. They supported gold-backed currencies. That’s radicalism.
Mr Vance could, if he wanted, reacquaint America with that tradition. He could point out how tariffs favour incumbent firms and hurt small and medium sized firms with higher costs. He could point to a large and corrupting lobbying system that calls for all this stuff.
To be fair to the Trump campaign, it appears that Trump is quite sound – if you believe Marc Andreesen and Ben Horowitz (both former Democrat voters) – who say that Trump is much saner and better on encouraging tech startups and the like than the Biden administration has been.
There’s a very American, small business is good only, strand of conservatism. It’s not far removed from the French Poujadism in some senses. Mom and Pop is good, those darn cosmopolitans in the big cities with their fancy combines, they’re bad.
Very pencil sketch of course and it’s not necessarily logically consistent or anything. But it’s there. I think this is Jacksonian?
I’m in the US, so I mostly react to events here; I don’t recall which ones you find worth following.
I became cynical about the importance of pointing out “the flaw in this sort of prejudice” because of the large population of “pro-market” thinktanks/fundraisers/pundits/etc. who denounced the reauthorization of the Export-Import Bank, but didn’t insist that we needed to stop voting for the incumbents who supported it… and then did insist that Trump’s pro-tariff campaign meant voting for him was beyond the pale.
I’d previously believed that the business-supported thinktanks/etc. were honest about wanting to slash regulations that prevented new companies from competing with the established incompetents dominating their industries. To believe this, I had to believe that these groups were just grappling with the general difficulty in getting things through congress.
When the ExIm bank expired, it was a chance to eliminate one of these barriers to entry; every taxpayer subsidized the bank, but the only firms who could get the cheap loans were giant incumbents. Best of all, they didn’t have to do anything; since the bank expired, restarting it would require more effort than letting it die.
So of course, Republicans in congress called in favors & set up an emergency session to reauthorize the bank.
I felt used by Republicans who insisted that Democrats were setting up state control of the economy, and the other limited government pundits I followed agreed. However, I don’t recall many insisting that we needed to vote out the congressfolk who set it up.
Conversely, a large cohort did insist that Trump’s pro-tariff & low immigration platform disqualified him from being elected.
I can see how you’d insist neither should be in office; I can see how you’d find both of them to be the “least bad choice” when voting. As for pundits who were “Never Trump” but overlooked the ExIm bank? They were clearly getting government to pick winners and losers in the market, and there would never be any progress on freeing the economy as long as they had power. They’d talk a good game about cutting interference to make sure established firms couldn’t protect themselves from creative destruction, but they’d only use their influence when those established firms were losing their lifelines.
I still agree that tariffs are bad policy; slowing trade & making it more expensive in general, with larger/established firms better positioned to navigate/exploit the rules at the expense of innovators, etc. However, while the small government supporters in the US refused to compromise with populists asking for protective tariffs, they were powerless against the pro-established-players who preached small government most of the time, but only worked for policy changes that would have meant established players would have to compete.
Realistically, free market people will always have a hard time in elections; by nature, we can’t buy votes with tax dollars. The best we could conceivably achieve is to play subsidy-seekers off of eachother, and try to keep the most powerful ones from success. Taking a reflexive anti-tariff stance meant that I, and most of the other US libertarian types, were completely incapable of opposing interests large enough to seek subsidies for international trade.
There’s probably very few (if any) small factory owners in the US who would find themselves in minimum wage jobs if not for tariffs increasing the price of competing imports from countries with slave labor; the tariffs are probably mostly preferred by companies who can afford to buy exemptions to ponderous rules preventing untaxed goods from entering the country. However, that whole “tariffs are bad and disqualifying, while the ExIm Bank is bad but not disqualifying” implies there could be enough subsidy-seekers hurt by tariffs that compromising with protectionists ends up being a net gain for economic freedom.
So, I’m not too upset that J.D. Vance is “conflating size with lack of competition” (even though they are, indeed, distinct) instead of pointing out “how tariffs favour incumbent firms and hurt small and medium sized firms” (even though they do). If I insisted on only voting for politicians who made clear the precision of their understanding of economies, I’d have to spend every hour researching candidates & lobbying, rather than just occasionally spending hours writing blog comments. I guess I could run myself, but have I said anything that makes you think I could win an election?
Big business crushing small businesses was a real problem in US history. I’d much rather have laws keeping the Standard Oil and U.S. Steels in check than relive excesses of the Gilded Age by magnates like Pierpont, Mellon, Carnegie and Rockefeller.
Tim Worstall – Big Business, these days (NOT in the past), means the Corporations who are dependent on a drip feed of Credit Money (created from nothing), whose shares are controlled by financial entities such as BlackRock, State Street and Vanguard, and who push an utterly destructive political and cultural agenda – of which DEI is only one aspect (they hate and despise ordinary customers – and long for the day when spending is predetermined via a digital currency system – basically Social Credit on steroids). This system is despicable – both economically and morally.
And yes the Big Cities in America are bad – they are terrible, in every way. They did not use to be – but they now are. Call it “Poujadism” if you feel like associating it with a 1950s antisemite – but it also happens to be the truth, modern American big cities are terrible places, they did not use to be – but they now are. And they are going to get vastly worse.
A better criticism of Donald Trump and J.D. Trump is not that they do not see the problem of a collapsing society (you seem to deny the problem itself Sir) – but rather Jonathan Pearce’s point that they do not understand the solutions.
For example, when are we going to hear either man denounce Credit Money (money created from nothing – which via the Cantillon Effect has created this vile state of affairs) – I will not be holding my breath. And Credit Money is one (one – not the only) of the roots of the present mess (and much worse is to come – the mess will dramatically worse).
Roger Sherman was the only man to sign all of the Founding Documents of the United States – and he had two warnings.
Avoid Credit Money, stick to gold and silver, was his first warning – and make sure government spending is as low as possible was his other warning. Of course the two things are linked – as it is Credit Money than enables government spending and Corporate spending (and wild individual consumption spending) to grow like cancers.
How much of all this do Donald J. Trump and J.D. Vance know? Do they even know WHY consumption imports continue to flood into the United States?
My guess is that neither man understands any of this.
Most likely they think that men like Roger Sherman were “primitive” economic thinkers who have been improved upon, and that there is nothing wrong with Credit Money and high government spending.
And thus the Republic will fall – in spite of the good intentions of Donald J. Trump and D.J. Vance.
And they do have good intentions, and they have courage – the Democrats have neither, they are cowardly (as cowardly as they are cruel – and they are deeply cruel) and they are malevolent (yes malevolent – they want to do harm)
The tragedy is that in spite of their good intentions and their courage both Donald J. Trump and J.D. Vance will fail – because they lack vital knowledge, they lack understanding.
Maybe he should read Adam Smith?
Steven R – having disagreed with Tim Worstall on the present – I will disagree with you on the past.
The past was not perfect – there was some Credit Money and government favours then to, but vastly (vastly) less than today.
By and large the “Magnates” you mention, individuals who actually owned a controlling stake in their enterprises (rather than being faceless Corporate bureaucrats – who are not really different from government officials and serve the same political and cultural agenda) did mostly (mostly) GOOD not harm.
Such books as “The Myth of the Robber Barons” are neglected, but well worth study.
Just because modern American (and general Western) “capitalism” is largely fake does NOT mean it was always so.
Men such as the original John D. Rockefeller (the man himself – not his degenerate descendants) achieved astonishing things.
As for Theodore Roosevelt and “Anti Trust” – it did the opposite of what it claimed to, it claimed to be helping ordinary customers, but it really hurt them.
Theodore Roosevelt was a much better man than Woodrow Wilson – but he had a similar contempt for the Constitution of the United State and a similar contempt for the limited government philosophy behind it.
The “solutions” of the Progressive Era did not deal with the real problems (and there were real problems of the time) – in fact they made them worse.
For example, the National Banking Acts (passed in the Civil War era) were bad – but the Federal Reserve system was an abomination, and NOT because it was “privately owned” but because Central Banking does not roll bank Credit Bubble banking – it encourages it, it makes it more extreme (vastly more extreme).
The leading banker of the era, Mr J.P. Morgan, was denounced for lending out 3 “Dollars” for every physical gold Dollar he had – in the early 1900s.
By the standards of the 1920s (forget today – today is totally insane) J.P. Morgan in the early 1900s was a saint.
They were lending out vastly more than three “Dollars” for every physical gold Dollar they actually had.
Progressivism had made everything vastly worse.
Steven R, I recommend you read The Myth of The Robber Barons by Burton Folsom. It debunks such arguments you make here. https://www.amazon.com/Myth-Robber-Barons-Business-America/dp/0963020315
(It appears as if Paul Marks and I are of one mind!)
Rockefeller sold oil products cheaply and efficiently, and had he stopped doing so and got lazy his profit margins would have vanished. He was a master at what we call vertical integration.
It’s true that he was heavily attacked. Mostly by thise who resented his success. Very few criticisms of him were justified at the time, or since.
Others did co-opt crooked politicians and that’s a reason why the Sherman Act came to exist. It’s effectiveness in encouraging competition was debatable.
Paul: Another book worth reading is Spulber’s Famous Fables of Economics: Myths of Market Failures. It debunks everything from Standard Oil to the QWERTY keyboard as “market failures.”
If the supposed “wisdom” is conventional…? It’s almost certainly wrong and/or misunderstood.
The primary problem we have with economics is that there are so many damn variables going into that dismal “science” that it’s beyond man’s capacity to understand once you get above the hunter-gatherer band. You may think that you do, but I’d wager that the folks who study the markets that kept shells and shiny rocks circulating around North America before Columbus almost certainly do not have the whole thing worked out. Likewise, neither did the participants…
Case in point, in more modern times: At one time, there was a huge market for exotic feathers, because women loved them some fancy millinery and so forth. You could make a fortune hunting the right birds, gathering the feathers thereof, and shipping them off to the market.
Then, for some inexplicable reason, women decided that fancy feathers were no longer fashionable, and “POOF!!!” went the market. Nobody predicted it; few understood that it was over, and there were vestigial remnants of it up until my childhood, in that you could still find advertisements offering to help you become rich by supplying the market with the proper feathers.
If you want to understand market economies, you have to understand people, and people are damn near beyond understanding to the precision that you can predict where things will be. Imagine being “the guy” sitting there planning the next fifty years of industrial output, right there before the advent of the automobile. Care to guess how many buggy-whip manufacturers would have been subsidized…?
I mean, who knew? Who the hell knows where things are headed, today? Can you predict with any reliability what the big ticket items are going to be, in thirty years? I surely couldn’t.
You want to get out and predict the market, you’re already demonstrating outright megalomania and delusion; you don’t know where things are going, and you often don’t know where things are going to pop out in reaction to your ministrations. Smoot-Hawley thought they were doing right, but today’s wisdom is that they were idiots. I suspect that were their policies followed under today’s conditions, wherein the US isn’t an up-and-coming manufacturing economy, things might be different.
The biggest warning sign for anything that anyone espouses is certainty… If they’re sure about a given subject, one that is as full of mind-warping variation like economics? They’re almost certainly wrong, to one degree or another.
Johnathan Pearce – thank you for giving the proper details of “The Myth of the Robber Barons” – which I failed to do.
William H. Stoddard – thank you for the book references, of which I was ignorant. Yes indeed the idea that Standard Oil harmed people and the country was saved by noble “Teddy” Roosevelt and “Anti Trust” is an inversion of reality.
The past economy most certainly did have corrupt elements – but it was more good than bad (including George Hurst and Mrs Hurst – the first libelled by the pathetic “Deadwood” television series, which does not bother to mention Mrs Hurst at all).
Sadly, contrary to Tim Worstall, the modern economy is more corrupt than not corrupt.
The vast Corporations are dependent on the drip feed of Credit Money (“money” created from nothing at all – and dished out to the connected – see the Cantillon Effect for how that corrupts both the economy and society) and whose shares are controlled by financial entities such as BlackRock, State Street and Vanguard – this is light years away from the idea of the Corporation of the late Milton Friedman who presented Corporations as apolitical commercial operations (not the organisations obsessed with an utterly vile political and cultural agenda – that they have become) loyal to “Aunt Agatha” style individual share owners – if only that was so (sadly it is not so).
Having attacked (often attacked) the late David Hume in the past it is only fair that I point out that he had a far more realistic view of these dangers, the dangers of vast Corporations (owned by no one – and obsessed with a political agenda), Credit Bubble banking, and Credit Money, than Milton Friedman did 200 years later.
The American economy of, say, 1912 was not a free market – but it was vastly closer to economic rationality than the present American economy, which is utterly corrupted.
The problem with Donald J. Trump or J.D. Vance is not lack of good intentions (unlike the Democrats, whose intentions are evil – yes evil, the intentions of both Donald J. Trump and J.D. Vance are good) or lack of courage – on the contrary they are both brave men.
The problem is their lack of understanding – but that is understandable, as if they went to “pro free market” economists and so on, they would be told total nonsense – that Credit Money is fine, that Credit Bubble banking is fine as well, that the vast Corporations are apolitical bodies faithfully serving customers (who, in reality, they despise) and serving “Aunt Agatha” style share owners (rather than real life – where the Corporations serve BlackRock, State Street, Vanguard and so on – and these financial entities are interconnected so, in reality, the economy is one corrupt, and political, “blob”).
Both Donald J. Trump and J.D. Vance would like to save the United States of America – they really would. But they lack the information to do so.
Why does Facebook have a foreign policy division? Why are they deeply invested in elections, both in our country and other nations halfway around the world going one way or the other to the point they will deploy mind-games and censorship on their users?
Why is Chase Bank (and banks over in England) using access to people’s own money as a social weapon to punish them?
At a particular scale, the owners of various companies corrupt, manipulate, and replace government. At a particular scale, even customers stop mattering entirely, and magic credit money from nowhere can provide them with the means to undercut and crush competition.
Libertarian dogma needs a bit of an update IMO, in the face of how social elites and nation-warping wealth concentrations actually behave in real life. The microeconomics of bakeries and gas-stations doesn’t seem to apply once politicians are being bought and sold and money is appearing from nowhere to prop up businesses that have never once in their rise to dominance made a profit or balanced their books. Also, if Bezos owning everything and everyone else being reduced to serfdom beneath an oligarchic canopy under which nothing else can grow is the *result*, then the process by which it happened is wrong. I don’t particularly care (and somehow doubt) if it followed all the rules of fair market competition – it still needs to be stopped.
How does everyone being a dependent employee of five or six massive corporations differ from communism?
Also, the microeconomic viewpoint of libertarianism takes *insufficient* account of the agency of actors in charge of these and other firms, IMO. They seem to assume that market rationality forces this or that decision, when in fact, once you get sufficiently far ahead of your expenses and competition, freedom to act according to other priorities than maximizing profit opens up, and it begins to matter a great deal who is in charge and what they want.
madrocketsci: That’s why the libertarian position, as stated by Ayn Rand (though she rejected the label “libertarian”!), is “separation of economy and state.”
maddrocketsci
William H. Stoddard is correct.
And if you think the position is different in Britain you are wrong.
Most shares here are also controlled by institutions NOT individuals (indeed that has been true since 1965 – getting worse and worse since then).
And the vast corporations here also depend on a drip feed of Credit Money – the same “Cantillon Effect” (named after Richard Cantillon some three centuries ago) operates here as in the United States, corrupting both the economy and society.
And we too depend on creating money (from nothing) to “pay for” endless consumption imports.
The problem is not that “libertarian dogma” does not understand these things, it does understand them. The problem is that not enough people understand “libertarian dogma” – including many so called “defenders of the free market” who, in reality, are lickspittles trotting out excuses for the Credit Money (and Credit Bubble finance) Corporate State, even the “Woke” Corporate State of today – with its fanatical obsession with destroying what is left of society.
Again I have to admit that David Hume, whose philosophy I have so often attacked, was very far sighted in foreseeing some of these dangers – almost three centuries ago now. Although so did Richard Cantillon.
If one attacks a man for things he was wrong about (or perhaps not “wrong” as such – as it is quite possible that David Hume was not advancing a philosophical “system” as such – but was acting as a sort of “Devil’s Advocate” attacking things that most people know to be true, but have not clearly defined) – it is morally necessary to also admit when he was correct about very important things.
As for Mr Hume playing (playing playfully) the role of “Devil’s Advocate” – there are many examples.
For example, his attack on the existence of the physical universe – we know it exists, but can we PROVE it?
His attack on the existence of the human person – the “I” with the claim that a thought does not mean a thinking – of course a thought DOES mean a thinking (a reasoning free will being) – but clever language can make it seem as if it does NOT.
His attack on “this is wrong – so I ought not to do it” (what normal people do mentally every day) – the David Hume attack being “you can not get an ought from an is”.
His attack on using moral reason to restrain (control) the passions – “reason is, and ought to be, the slave of the passions” – reason being reduced to an instrumental (“slave”( role “how do I get away with doing these things”.
And Mr Hume declaring that incompatible things, such as actions being predetermined and human moral responsibility, are “compatible” – again they are NOT compatible, but clever language (a mist of words – as with the “sophists” of Ancient Greece) can make it seem so.
It is quite possible that Mr Hume believed in NONE of the philosophical doctrines that he is associated with – he may well have been using “sophistry” (clever language – a mist of words) to attack reason and push the opposite of the truth – BUT for the very good reason of waking people up from their “dogmatic slumbers” (as Kant put it) where we know X,Y,Z to be true – but are unable to articulate WHY these things are true, because we have never been challenged. Mr Hume acts as the challenger of “Common Sense” (i.e. what ordinary people believe) – challenging us to THINK about things we take for granted.
“I am Paul Marks” – “how do you know you are Paul Marks, you could be a eight legged alien spider type creature by the name of Ziggy, who has gone insane and thinks it is Paul Marks, PROVE you are Paul Marks”. It is surprisingly difficult – ditto all the other examples above.
We know that the physical universe exists – but proving it….
We know that we ourselves, the “I”, exists – but proving it…..
We know that we have moral agency (free will) – but proving it….
We know that moral responsibility and all actions being predetermined (so there being no such thing as moral choice) are incompatible – but proving it against sophistry (a clever mist of words) ….
But with economic matters, matters of money and the economy, Mr Hume, like Mr Cantillon, may have had a more practical purpose – and, thus, wrote what he believed to be the case.
My apologies – it is George Hearst, not “George Hurst” as I mistakenly typed. Ditto Mrs Hearst – not Mrs “Hurst”.
Paul:
I do not know (yet) whether Trump and Trump/Vance understand the solutions, but i am going to argue that Big Business is part of the problem — or more precisely, that there is a Big Risk that Big Business becomes a problem.
From the OP:
Quite right; but please note that it is only Big Business that can afford to lobby Congress. That does not mean that Big Business should be repressed, but at the very least there should be constant vigilance. Something like a progressive business tax might also help.
I note that, in 2020, big businesses like Google, Facebook, Amazon, and Walmart must have profited from the lockdowns, and from the mostly peaceful BLM protests.
The way the Deep State favors Big Business is often devious.
As for this, in the 1st paragraph of the OP:
Au contraire: it is exactly because competition is “a dynamic process through time”, or to be more specific, a process of trail+error, that a sector dominated by small businesses is more likely to progress than a sector dominated by a few Big Businesses.
If economic actors have perfect information, then having just 2 competing Big Businesses (call them Boeing and Airbus) would be perfect competition: neither of them can squeeze profits out of their customers. (I forget the economic term for this concept.)
But if economic actors have imperfect information, then the more businesses are in the market, the more likely that one of them gets it right.
But business – big or small – constantly seeks to improve its lot. As it should.
The evil isn’t that business seeks advantage. It’s that government actors are receptive to bribery. The constant vigilance needs to be directed at government, not business.
If I build a weak fence to keep rabbits out of my garden and yet they eat the garden, it’s not the rabbits’ fault.
Oops. I hit “post” too quickly.
Should have added: The evil also lies in the fact that government is so all-encompassing that it has the power of huge favors to pass out as it sees fit.
Bobby:
Agreed. We the People should be vigilant … so that government actors keep on their toes and stay vigilant.
Absolutely! It’s not just that Big Business is too powerful, it’s also that government is too powerful.
With important things it is not bribery it is beliefs (false principles) that is the problem.
For example, for all the talk of secret plots – it as beliefs (false principles) that really led to the creation of the Federal Reserve system.
William Howard Taft was straight – try and bribe him and you would have found out that the fat man was very very strong (he had been a college wrestler) – you would have found out how strong he was as he was smashing against the wall for trying to bribe him. Yet Taft supported more “flexibility” in response to the 1909 crash – “flexibility” (the creation of Credit Money) was the problem, not the solution, but it was held to be the solution – create more Credit Money to deal with the problem of Credit Money “the hair of a the dog” – like an alcoholic dealing with a hangover by drinking more booze (till his liver goes – as it has with our society).
Woodrow Wilson was not corrupt – he was an ideological statist, ditto most of other “great reformers”.
So yes Snorri you are correct – it is that government is too powerful, and it is too powerful because of false beliefs.
For example, the doctrine of the Supreme Court that no State may have anything other than gold or silver as legal tender (Article One, Section Ten of the Constitution of the United States) does not apply to the Federal Government – which would make the “nor worth a Continental” Constitutional, and the Philadelphia Constitutional Convention pointless (as it was called to stop such things as the Continental fiat currency being done again).
And the Supreme Court doctrine that “regulate interstate commerce” does not mean free trade over State lines but means…. well means whatever the Congress and President wants it to mean, that Supreme Court doctrine means that the nation will (inevitably) be tied up with Red Tape – every aspect of economic life (which is ordinary life) controlled, and crippled, by endless regulations.
And the Supreme Court doctrine that there is a “General Welfare Spending Power” – because Article One, Section Eight of the Constitution of the United States says that the “common defence and general welfare” is the purpose of the specific spending powers granted to the Congress.
If there is a “General Welfare Spending Power” then it does not matter how honest and vigilant Congress is – as schemes will be set up to “help the people” which will grow like cancers and destroy the Republic.
Why does Facebook have a foreign policy division? Why are they deeply invested in elections, both in our country and other nations halfway around the world going one way or the other to the point they will deploy mind-games and censorship on their users?
Corporate self defence, would be my guess. Facebook and other big businesses have enemies – jealous people, politicians that want to leverage the power they think FB and other platforms have, etc. So FB invests in lobbyists, and pays oodles of money to hire folk such as former Liberal Democrat (UK) political leader Nick Clegg to run its PR. The same applies, in varying ways, to the carmaker giants of the post-war period, the oil majors of more recent times, the aviation industry, and now, the spacefaring sector.
Big Business, whether it is relatively pure free market or tempted by cronyism, has to think about how politicians of a populist bent, such as Teddy Roosevelt of old or JD Vance now, want to take them down, for well meaning or corrupt reasons.
Remember, there is a strain of mafia-type mentality at work here: “Nice big firm you have built, Mr Rockefeller. Shame if someone and their loser friends were to take it apart.”
Johnathan Pearce – that is part of it, but Facebook, like most of the other vast Corporations, has a very obvious political and cultural agenda – which is nothing much to do with its commercial interests. A deeply EVIL political and cultural agenda.
According to Milton Friedman this is not what corporations are like – but according to David Hume (two centuries before) this very much what corporations are like. Empirical observation indicates that Mr Hume was correct – that vast corporations become obsessed with political projects, that they are not apolitical profit makers for “Aunt Agatha” style little individual shareholders (who, in reality, they despise – just as they despise ordinary customers). Although this may be due to Credit Money (the Cantillon Effect) concentrating the control of shares under the control of demented entities such as BlackRock, State Street and Vanguard (which have shares in each other – thus meaning that a supposedly competitive economy is, in effect, a vast “blob” – even most commercial advertising is under the control of “professional bodies” with a far left Collectivist agenda).
Going back to the Constitution of the United States….
Again if fiat money (if money does NOT have to be physical gold and silver – as Article One, Section Ten would suggest) is Constitutional then there was no need for the Constitutional Convention in Philadelphia (or for taxation) – as the government could have just carried on printing “Continentals” to finance endless spending via endless inflation.
And if there is a “general welfare spending power” – there there is no need to list specific spending powers in Article One, Section Eight of the Constitution of the United States – and the Tenth Amendment has no meaning.
Roger Sherman warned at the Constitutional Convention that, EVENTUALLY, loose wording would be taken advantage of.
But it was very hot in Philadelphia (they were meeting in summer and there was no air conditioning in those days) – people wanted to go home, and Roger Sherman was considered a paranoid old puritan.
Perhaps he was a paranoid old puritan – but he was also correct.
Of course…., if fiat money is acceptable (if money does not have to gold or silver – indeed any physical commodity) “Wall Street” and “The City” have no legitimate function in financing government spending.
If (if) it is acceptable to create money from nothing (nothing at all) then this money does not have to be lent out to financial institutions and then borrowed back again by the government – the government can just create the money and spend it – there is no need for “Wall Street” or “The City”.
Again if (if) fiat money is acceptable – then the only reason to have dealings with the “financial centres” (Wall Street, The City, Frankfurt and-so-on) is to dish out Corporate Welfare (interest payments and so on) to wealthy people.
I must stress that I do NOT support fiat money and vast government spending – but people who DO have no legitimate reason to have this done by private financial entities, so that Corporate types can wet-their-beak.
J.M. Keynes took the print-and-spend theories of Major Douglas and others and added a banking element.
There is nothing in Major Douglas and the other “Monetary Cranks” about lending out money to the banks and borrowing it back again – that is added by J.M. Keynes (just as much a “Monetary Crank” as Major Douglas and the others) – it is added to get the political support of “The City”.
After all if government just printed money (or created it via computer screens – the modern method) and spent it – the people in expensive suits would not get to wet-their-beaks.
Yet again I do NOT support this – but it is the logical position for people who support fiat money.
The only thing that Lord Keynes added to the ideas of Major Douglas and the other “Monetary Cranks” was CORRUPTION – for that is what the modern “financial system” is, organised (institutionalised) corruption.
It was necessary for Lord Keynes to add CORRUPTION in order to get the support of “The City” for the creation of money from nothing.
Before anyone points it out….. yes I know that both David Hume and Richard Cantillon pointed this out three centuries ago (what Lord Keynes was doing was nothing new – it is just the SCALE that is new).
What was an element of corruption in the past has now taken over the entire system – it is not an “element” any more, the entire system is one vast “blob” of corruption.
Paul Marks: What you seem to miss is that some of these political fads are declining in the US, and where the US leads, the rest tends to follow. From the WSJ this week:
From tech to tractors, companies are dialing back diversity, equity and inclusion efforts. Instead, a DEI alternative endorsed by Elon Musk could alter the fate of your next job application. It’s known as MEI, short for merit, excellence and intelligence. As described by Scale AI Chief Executive Alexandr Wang, who helped popularize the term, MEI means hiring the best candidates for open roles without considering demographics.
This is, in my view, a result of several forces, but higher interest rates after the pandemic was a big force, and possibly the decisive one. If you are a flabby corporation subsisting on cheap money, you can get away with this rubbish; labour markets are tight, and firms have to pander to what young adults, with their heads full of this stuff, want. Now things are harder now. Activist investors such as the Carl Icahns of this world are making a difference, sacking useless staff and making firms leaner again.
A few years ago, the CEO of Coinbase caused outrage on the woke corporate left, and delight in other areas, by setting out corporate policy in not allowing political views to be an issue at work. Four years later, that CEO is vindicated, and his critics look like a bunch of arrogant fools.
I know you are a perma-gloomster, Paul, but now and again there is genuine pushback against all this rubbish. Look at how discredited Black Lives Matter now is. The same, in my view, is going to come for the worst of the dark Greens. Europe’s suicidal drive towards net zero is already provoking a political backlash, as European election results have showed. Here in the UK, under the deep green energy minister Ed Milliband, I confidently predict disaster to happen, and that’s when, hopefully, the whole shebang unravels in the UK. In the meantime, we need to keep making the argument about the wrong turns that modern capitalism has taken. That includes a rethink of corp. limited liability; it means more focus on restoring shareholder control of firms, etc.
Jonathan Pearce – I think what is happening is that they are changing the titles (names) of the policies and not being so open about them. Rather than really changing direction.
But I would be happy to be mistaken.