Occupy Portland: Don’t replace one set of thieves with another


{Note: This commentary was written before Mayor Adams ordered Occupy Portland to vacate the two downtown Portland parks it’s been camping in by tonight at midnight. The focus below is not on the camp, but on the ideas apparently held by the occupiers.}

The recent Occupy Wall Street/Occupy Portland movement has focused attention on a number of perceived ills in our society. Fortunately, a new book, written before the movement began but distributed in the middle of it, can shed light on why many of the “occupiers” blame the wrong people for their troubles and risk replacing one set of thieves with another.

The Morality of Capitalism is a short book of essays written by entrepreneurs, philosophers, and economists. Each brings his own perspective to the subject. The editor, Dr. Tom Palmer, may have anticipated the Occupy movement, because he included in the book’s Introduction a timely discussion of free-market capitalism versus crony capitalism. It’s a discussion that the occupiers would do well to read.

Tom Palmer is on a book tour, which included a forum sponsored by Cascade Policy Institute in Portland on November 3. Just a few blocks from city and federal parks “occupied” by a mix of protesters, homeless, and street youth, he shared his insights on the movement and where it goes wrong.

He thinks the occupiers yearn for a world before modernity. The creative destruction involved in progress and innovation scares them. Here is a summarized example Palmer used that younger audience members may not have related to, because the innovation it involves largely happened before they were born:

Not too many years ago people went to school to become typewriter repairmen. Every town had a typewriter repair shop and you could earn a respectable living repairing them all your life. Then, personal computers were invented and typewriters virtually disappeared, putting the repairmen out of work. What happened to them? They all starved (just kidding). No, they retrained for other, more useful jobs and we all benefitted from the computer revolution. The typewriter repairmen didn’t die — the way things had been done died.

Palmer places blame for the recent economic crisis at the feet of government enterprises, including The Federal Reserve System, mortgage facilitators Fannie Mae and Freddie Mac, and The Bank for International Settlements.

He explains that free-market capitalism involves profit and loss, but cronyism is only about profit. Losses are pushed off onto the taxpayers. Cronies are friends of those with political power. They seek protection from market forces. They urge their political friends to outlaw their competitors and to bail them out with taxpayer funds when their risky schemes go wrong. Those now occupying Wall Street and Portland parks may have identified the cronies, but they mistake them for those who bear the ultimate blame.

One of Palmer’s more colorful descriptions may resonate with the occupiers. He postulated that most nations were established by pirates―stationary pirates who, rather than periodically attacking ships and looting them, now could loot smaller amounts from their subjects all the time.

Another very powerful insight might make the occupiers stop and think about their assumption that the rich got that way by stealing from the rest of us, thus making us poor. Palmer pointed out that poverty has no cause. Wealth has causes. Poverty is the absence of wealth. In the Introduction to The Morality of Capitalism, he states:

In many countries, if someone is rich, there is a very good chance that he (rarely she) holds political power or is a close relative, friend, or supporter—in a word, a “crony”—of those who do hold power, and that that person’s wealth came, not from being a producer of valued goods, but from enjoying the privileges that the state can confer on some at the expense of others.

In a country with a primarily free-market capitalist system, the rich got that way by providing value to others. They created, made, and/or sold goods or services that lots of us value and are willing to pay for. We value those goods or services more than the money we voluntarily give up to acquire them. Both sides of these transactions benefit.

Boiled down, the essential difference between free-market capitalism and every other economic system is that capitalism involves voluntary transactions between willing buyers and willing sellers. It is this voluntary feature that makes capitalism moral.

Occupiers don’t seem to have grasped this important concept. Too many of them seem hell-bent on trying “…to redirect crony capitalism in the protesters’ preferred direction, stealing For them rather than From them.”* Theft, whichever direction it goes, is still theft.

* Gary Galles, “Protesters’ gripe is with crony capitalism,” October 12, 2011.


Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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  • BodybyFischer

    These clueless morons can wallow in their own stench.

  • Teyuna

    nothing wrong with entrepreneurship, as it doesn’t exploit.  “Crony capitalism” does.  there IS an enormous difference.  Some conflate the two, in order to criticize the protesters.  If you turn “crony capitalism” into motherhood and apple pie (entrepreneurship, hard work, etc.), then you get to say, “these fools!  they’re just lazy!”  The reality of how transnational corporations work is that they wield power and threats.  Has the author read “confessions of an economic hit man?”  this is not “entrepreneurship” and hard work.  this is raw power.

    Occupiers who do the same thing–that is, conflate small business with crony capitalism, are, as you say, blaming the wrong people.  Local businesses are great, they are the community, they are our friends, they are our families.  In my case, they’re ME.  

  • Bob Clark

    I am glad there’s a Cascade Policy Institute in the Portland area as the few of us individualistic souls in Multnomah county, living amongst mostly collectivist believing souls, really need the moral support.

    • Steve Buckstein

      Thanks Bob.  Of course, Cascade moved our office out of downtown Portland and Multnomah County several years ago. But we’re just a few blocks outside the county limit, so we help all we can.

  • Anonymous

    Thank you for all those homeless children and vets suiciding themselves on drugs. Own up to it, take personal responsibility for once.

  • valley person

    ” He thinks the occupiers yearn for a world before modernity. The creative
    destruction involved in progress and innovation scares them.”

    This is about as ridiculous assertion as I have sen in print. This is the generation that is more modern than any before it. They embrace technology, universal civil rights, gay rights, women’s rights. They are hardly a bunch of reactionaries. If anything, its the Tea Party that wants to turn the clock back against modern times.

    Economically and politically the protesters (generation) are experiencing 3 very problematic issues that directly impact them:

    1) Heavy personal debt if they go to college, near zero prospects if they don’t.
    2) Diminishing prospects for even entry level jobs that correspond to the education they indebted them selves to
    3) Diminishing ability to sustain public spending for the middle class social safety net that worked for their parents and grandparents for 60 years, leaving them in the lurch.

    Republicans call for gradual dismantling of SSI and Medicare, but without touching payments to anyone 55 or over. What does this say to young people? It says they get a double whammy. They get the honor of continuing to pay for current and near future retirees, but they give up the prospect that the generation behind them will contribute to their retirement. So here they have few job prospects, loads of debt, are forced to pay for their elders, and are told to fend for themselves when they reach old age.

    Is this a rebellion against “modernity?” No way. Its a rebellion against diminishing prospects.  

    • Anonymous

      It is nearly impossible to get a libertarian to tell the truth.

    • Steve Buckstein

      If Palmer’s conclusion that the occupiers yearn for a world
      before modernity is about as ridiculous an assertion as you’ve seen in print,
      then you aren’t as well-read as I thought.

      My assumption, having been to the camps and seen how they are operating, is
      that modernity is being rejected there in the sense that the occupiers seem to
      yearn for a return to communalism. feudalism or agrarianism and they reject
      capitalism, which marks the advent of a modern economic system. “Save the
      plant from capitalism” was just one clue spoken by an occupier in front of
      City Hall after the Mayor gave his ultimatum to vacate the parks by midnight
      tonight.

      • valley person

        I think you are misreading the main thrust behind this movement. Sure, there are some there who fit the young leftist stereotype, nostalgia for the 60s. But that is a very small part of it. Today’s young adults, in my experience and backed up by polling, has a pretty balanced view of capitalism and government.

        I’ll give you an example. I had a student 2 years ago in my ecology class at PSU who had a degree in finance and worked on Wall Street during the late stage of the bubble. He was “downsized” when the whole thing went ass over tea kettle, and decided to take the opportunity to go to grad school to pursue ideas on linking finance with 3rd world “green” development. He was quite interested in market based solutions to festering development problems. But he was also pretty left wing in terms of lifestyle. He was about as modern as you can get, yet a bit of a 602 throwback at the same time. Very complex. And he is among the Wall Street occupiers back east right now.

        Also among the occupiers or at least sympathizers are the hundreds if not thousands of small scale entrepeneurs Portland has spawned the last few years, the food cart vendors, organic farmers, brewers, distillers, bicycle makers and repairers, and so forth. These folks are hardly communists, and certainly not feudalists. They are better characterized as small c capitalists who are inherently suspicious of bigness AND accumulation for the sake of accumulation.

        I could be wrong  about them, but what I think we are seeing is the stirring of something new and better adapted to the challenges the modern world has in front of us. Its anything but anti modern.   Its the most forward looking thing we have going right now. But it will take time to gel into something coherent. If and when it does gel, I’m pretty sure it won’t look like free market fundamentalism. But it also won’t look anything like communism.     

        • valley person

          That was supposed to be 60s throwback, not 602.

        • Steve Buckstein

          While not an expert on the history of revolutions, the more I read about the differences between the American and French revolutions, the more I see the occupy movement lurching toward the latter. Community over individual rights; the exact opposite of the ideals behind our revolution against Britain.  If that’s correct, you might want to hedge your bets about what’s coming not looking anything like communism.

          • valley person

            We share not being experts on the history of revolutions. However, I think you mischaracterize the American revolution. It was about the rights of a distant, new community to govern itself democratically. It wasn’t about the individual against government, but about a people wanting to establish their own government.   Those individuals who failed to support the collective resistance to the British were treated quite harshly.

            But rest easy Steve. I don’t see any signs of a guillotene being erected in the square. I do see a bunch of bright, mostly well educated young people wanting to re-balance the scales a modest amount. If it turns into more than that, it will probably be because they were not offered a reasonable accommodation.

            Here is a proposal I thought of while cleaning the gutters a minute ago. What if taxes were raised on the wealthy to help pay for the SSI and Medicare of current elders, allowing the youngers to divert a portion of what they pay into individually owned and directed retirement accounts?  Wouldn’t a program like that achieve a key objective of the right, phasing back entitlements, in a way the left would have a hard time saying no to? And wouldn’t it redirect some wealth back towards the young?  

          • Steve Buckstein

            No guillotines downtown is definitely a good thing, but don’t forget the rocks and concrete chunks taken out yesterday.I agree that the occupiers I’ve talked with are generally young, bright and well schooled (as opposed to educated).  When the employed, college graduate, software engineer I debated on the radio a couple weeks ago told me that he thought capitalism was a zero-sum game that said a lot about his (and many of the occupiers) lack of understanding about how wealth and prosperity are created.As to taxing the wealthy so that the young could open personal retirement accounts, the IRS data I read tells me that the top 1% of income earners make 20% of individual income but pay 38% of federal income taxes. Seems more than fair already.Redirecting “some wealth back towards the
            young” implies that it was somehow stolen from them in the first place, and by the very people you want to tax more. I reject that assumption. Those wealthy people who got that way as crony capitalists deserve to lose those priviledges, but those who earned their wealth honestly in the free marketplace have no obligation to “redirect” any of it to the young or anyone else.  All that said, letting the young convert some of all of their FICA taxes into personal retirement accounts is a great idea. Just find a better way to accomplish it.

          • valley person

            The “battle” is going to be between well armed cops and a few dozen anarchists throwing whatever they can get their hands on. I would not confuse the anarchists with the spirit and substance of the OWS movement.

            For the fellow you talked to and others like him it looks like capitalism has indeed become something of a zero sum game. The rich get richer and everyone else gets poorer or deeper in debt. That has been the experience of people under 30 certainly.

            You have a faith in capitalism that I don’t share. You think, like Paul Ryan, that it will magically lift all the boats in the pond. But it turns out it only lifts those with the best boats who managed to position themselves in the best part of the pond. Those without boats drown.

            I’ll take your IRS data at face value. The fact is, most working people pay far more in payroll taxes than they do in income taxes, yet payroll taxes are a tax on income, so it amounts to the same thing. And since payroll taxes stop at around $100K a year, and since wealthy people gain much of their income from capital gains, which are only taxed at 15%, the fact is that taken as a whole the rich are paying only slightly more percent of their income than the middle class. Buffett pointed this out with his own situation.

            Redirecting some wealth to the young helps balance both the generational and wealth imbalance that exists. Or maybe you think its fair that they have to pay their college debt (which their parents did not have because college was tax supported for them,) and pay for their parents retirement, and pay for their own retirement, all without benefit of a decent job.  That seems like an untenable situation to me. Something has to give.

            I’m seeing this “crony capitalist” term tossed around a lot on your site of late. I guess it must be the latest talking point as another way to bash government. But I’d be careful with it if I were you. To the extent some wealthy capitalists are corrupt and game the system in their favor, which I agree happens, it supports the argument for getting corporate and rich people’s money out of politics. Something most of the occupiers are all for.  But I doubt the Koch brothers agree. 

          • Steve Buckstein

            While you’re correct that many taxpayers pay more in payroll taxes than they do in federal income taxes, remember that they’ve been told that those payroll taxes are going to fund their Social Security and Medicare when they need them. Of course that’s not true.

            I agree that most occupiers are all for getting corporate and rich people’s money out of politics, but I think even here they miss the bigger picture.  That money is only there because there is so much money now controlled by government that it’s worth it to try and influence some of it into crony pockets.

            The several billion dollars that will be contributed in the current election cycle pale in comparison to the three Trillion-plus dollars that will be spent by the federal government in the next twelve months.  That’s why I would hope the Occupiers would join Tea Partiers in pushing to reduce government spending rather than raising taxes, which will simply enable government spending to grow even further.

          • valley person

            What we’ve been told is that we are paying for our parents and grandparents now, and that when our turn comes our kids and grandkids will chip in for us. If you think you’ve been told something else, that is your own misunderstanding.

            If you think corporations are influencing spending into their own pockets, that’s an argument for limiting their spending on lobbying and campaigns. Its not an argument for cutting people’s social security checks or health care.

          • Dean Apostile (Valley Person): I’m seeing this “crony capitalist” term tossed around a lot on your site of late. I guess it must be the latest talking point as another way to bash government.
            JK: Not really, it is a big problem locally and nationally. But, I’ll bet you don’t even recognize it. And won’t admit to your part in it either.
            Portland— Urban renewal, big pipe, water billing system, cover the reservoirs, light rail, PGS, NWNG, US WEST, car share, TODs.
            Damascus—-YOU participating in land use decisions to make YOUR land more valuable and other’s land less valuable (nature preserve, etc.)

            Dean Apostile (Valley Person): But I’d be careful with it if I were you. To the extent some wealthy capitalists are corrupt and game the system in their favor, which I agree happens, it supports the argument for getting corporate and rich people’s money out of politics.
            JK: NO, it argues that the government has too much power as Steve said.
            As long as some entity is subject to people using the government to steal their money, they should have a right to speak up. You appear to just be wanting to silence your opposition. Don’t forget that McGovern was only able to run because of the support one of those evil rich people.

            Dean Apostile (Valley Person): But I doubt the Koch brothers agree.
            JK: What is your problem with people who create wealth by making lots of useful things and employing lots of people?
            Why is your idol, Soros, someone who DOES NOT create wealth (a currency trader).

            Dean Apostile (Valley Person): I had a student 2 years ago in my ecology class at PSU who had a degree in finance and worked on Wall Street during the late stage of the bubble.
            JK: Does that imply that you are a teacher?

            Dean Apostile (Valley Person):  He was “downsized” when the whole thing went ass over tea kettle, and decided to take the opportunity to go to grad school to pursue ideas on linking finance with 3rd world “green” development.
            JK: Guess he didn’t pay much attention to the class about financial bubbles!
            But then he can’t be too perceptive if he is going into the latest bubble – green. This one is so obvious, I am surprised that anyone with a high school education would fall for it.

            Thanks
            JK

          • valley person

            ” And won’t admit to your part in it either.”

            Since I don’t have enough spare money to buy influence, I don’t have any part in it, so there is nothing to admit.

            “What is your problem with people who create wealth by making lots of useful things and employing lots of people? ”

            My problem is when those people’s wealth is contingent on being allowed to pollute my air without having to pay me for the right to do so.

             “Does that imply that you are a teacher?”

            Very perceptive of you. Does your question imply this is a problem?

            “Guess he didn’t pay much attention to the class about financial bubbles!”

            You assume there was a class on financial bubbles. And you assume that had he taken such a class, the knowledge gained would have allowed him to have avoided being a participant as a junior level trader.  

            “But then he can’t be too perceptive if he is going into the latest bubble – green”

            You missed the current one. Gold.

          • Dean Apostile (Valley Person): ” And won’t admit to your part in it either.”
             Since I don’t have enough spare money to buy influence, I don’t have any part in it, so there is nothing to admit.
            JK: But you are the problem that corporations need to defend against. You misuse the power of government to take away value from other people.

            Dean Apostile (Valley Person): “What is your problem with people who create wealth by making lots of useful things and employing lots of people? ”
            My problem is when those people’s wealth is contingent on being allowed to pollute my air without having to pay me for the right to do so.
            JK: Lets hear the specific charges against the Koch Bros.  Are they illegally polluting? Or are you just parroting another delusion?  

            Dean Apostile (Valley Person):  “Does that imply that you are a teacher?”
            Very perceptive of you. Does your question imply this is a problem?
            JK: How sad for the students.

            Dean Apostile (Valley Person): “Guess he didn’t pay much attention to the class about financial bubbles!”  
            You assume there was a class on financial bubbles. And you assume that had he taken such a class, the knowledge gained would have allowed him to have avoided being a participant as a junior level trader.  
            JK: A degree in finance would be deficient it they didn’t study past bubbles. You can start with Extraordinary Popular Delusions and the Madness of Crowds.   It even explains your belief in global warming.

            Thanks
            JK

          • valley person

            I am the reason corporations spend billions in politics? Wow. I had no idea I had that much influence over them. Good for me then.

             Are the Koch brothers polluting? Yes.  They are in the oil business, and burning oil pollutes the air.  And yes, they have violated our weak air and water protection laws on numerous occasions. Look it up.

            You’ should take your opinion of my teaching to my students. But since you haven’t taken my class or even sat it on it, your opinion won’t be worth much.

            Since I don’t have a degree in finance, I don’t know what the required readings are.  Do you do have a degree in finance Jim?

            As for global warming, I would have to read this book to understand why I accept scientific fact?

          • Dean Apostile (Valley Person): I am the reason corporations spend billions in politics? Wow. I had no idea I had that much influence over them. Good for me then.
            JK: You are a microcosm of the problem. You use government power to enrich yourself. That is the essence of crony capitalism.

            Dean Apostile (Valley Person):  Are the Koch brothers polluting? Yes.  They are in the oil business, and burning oil pollutes the air.  And yes, they have violated our weak air and water protection laws on numerous occasions. Look it up.
            JK: You are the one who brought Koch and accused them – YOU provide the evidence. (And I don’t mean some partisan or greenie crap.)

            Dean Apostile (Valley Person): As for global warming, I would have to read this book to understand why I accept scientific fact?
            JK: The book is about popular delusions and manias. That is what the dangerous global warming claims are. Surprised that you can’t figure that out after each of the main pieces of evidence have crumbled (hockey stick, Al’s ice cores, Himalayas, hurricanes, IPCC using geeenie propaganda, climategate emails)  and they shift their claims to the point that now they claim warming causes cooling. Simply unbelievable that people still buy that crap. Especially now that it has been shown that solar influences are a better match to climate that CO2 ever was and unlike CO2 the solar matches the recent 10+ year stasis in climate.

            Thanks
            JK

          • valley person

            You proved my point Jim. You identify a person with zero political power, and accuse him of “crony capitalism.” They fact that I am neither a crony nor a capitalist doesn’t even factor into your thinking.  You just have anew name to call people you disagree with.

            The “evidence” on the Koch’s is in the public record. They have been fined on numerous occasions for violations of both the clean air and water acts. Whether I lead you to the cases or not is besides the factual point.

            So I and every major scientific body on the planet are deluded and manic because you read something in a book? At least I have good company.  

          • Dean Apostile (Valley Person):  The “evidence” on the Koch’s is in the public record.
            JK: Then you will have no problem showing the evidence. The fact that you cannot show evidence, proves that you are making baseless accusations.

            Dean Apostile (Valley Person):  So I and every major scientific body on the planet are deluded and manic
            JK: YES. You need to understand how these organisms work. They generally DO NOT represent the informed portion of their membership on politicized issues.

            Dean Apostile (Valley Person): because you read something in a book?
            JK: The book is about manias. Mainly financial. It provides a foundation for understanding how manias like global warming work.

            Thanks
            JK

          • valley person

            Ok. Koch Industries pled guilty in 1999 of dumping a gazillion gallons of aviation fuel in protected wetlands along the Mississippi River.  They paid an $8 million fine, the largest federal environmental fine ever paid in Minnesota. No wonder they want to roll back regulations.

            I don’t think scientific bodies are “organisms” Jim. I think the term you want is “organizations.” Yes, of course they don’t represent their membership.

            So a book about mania leading to financial bubbles and collapse suggests to you that peer reviewed science works the same way? Why not read a book on knitting and apply what you learned in that?

            I think Jim, your arguments on global warming get weaker by the day.

          • Even the media’s new darling, Muller questions man’s role in warming:

            “The amount that is due to humans is still open and there are very big
            uncertainties in that,” Muller added, urging continued study of the
            matter..

            https://www.google.com/hostednews/afp/article/ALeqM5jAHyJV2z4v-2UEOo6bYAFQQaROVw?docId=CNG.87699d35984c3444a0e0ba764eddfb45.7e1

            Note that most of agree that the earth has warmed since the little ice age – the real question is the role of man’s CO2.

            Thanks
            JK

          • valley person

            I note you just ran away from the Kock Industries topic and attributed a quote from me about Muller that is not from me.

            Nevertheless, on Mullers quote, there are always going to be uncertainties Jim. There are still a lot of uncertainties about plate techtonics, how gravity works, evolution, and pretty much every science topic out there.   Being uncertain is not an excuse for delaying action when we have enough knowledge to take steps away from polluting the air with more carbon.

            There isn’t any question that CO2 is a greenhouse gas, that it has increased in the atmosphere due to fossil fuel burning, and that we are running a planetary risk by doing nothing about this. If you continue to read what Muller said, you will find he agrees with me.

            The Koch brothers should ask for their money back. They got screwed by reality.

          • Sorry, my reply ended up above your post.
            thanks
            JK

          • Dean Apostile (Valley Person): There isn’t any question that CO2 is a greenhouse gas, that it has increased in the atmosphere due to fossil fuel burning, and that we are running a planetary risk by doing nothing about this.

            JK Lets look at your logic:
            1. CO2 is a greenhouse gas
            2. it has increased in the atmosphere
            3. due to fossil fuel burning
            therefore
            we are running a planetary risk by doing nothing about this.

            Even if items 1-3 were true, you have, logically speaking, proven nothing:
            1. No casual  connection between CO2 and atmospheric temperature.
            2. No casual connection between fossil fuel burning and CO2

            You have merely recited three alleged facts and think they prove something! It is really sad to see a school teacher not understand basic logic.

            Thanks
            JK

          • Dean Apostile (Valley Person): I note you just ran away from the Kock Industries topic and attributed a quote from me about Muller that is not from me.
            JK: I am still waiting for your evidence of Koch’s evil. All you presented was a unsubstantiated accusation.

            Dean Apostile (Valley Person): Nevertheless, on Mullers quote, there are always going to be uncertainties Jim.
            JK: AND there is NO evidence that man’s CO2 is causing dangerous warming. If there were, zealots like you would gladly show it.

            Dean Apostile (Valley Person): There isn’t any question that CO2 is a greenhouse gas,
            JK: There is NO evidence in a real atmosphere, only in a lab experiment with no other gasses present.

            Dean Apostile (Valley Person):  that it has increased in the atmosphere due to fossil fuel burning, and
            JK: No proof that it is man’s CO2, only indications that it is old carbon, which also has natural sources.

            Dean Apostile (Valley Person): that we are running a planetary risk by doing nothing about this.
            JK: why did warming stop 10+ years ago, while CO2 increased?

            Dean Apostile (Valley Person): If you continue to read what Muller said, you will find he agrees with me.
            JK: Unlike you, he admits there is not good evidence that man is causing most of it.

            Thanks
            JK

  • Spartacus

    We have the poor because the system we have requires it.  There has to be income disparity.  We need a ready pool of people who can fill in for subsistence, and less, wages.  The rich have also become that way, in part, by paying as little as they can for the labor that helped make them rich. 

    If the rich truly want to have a system that continues to work to their benefit — allows them to accumulate more massive amounts of wealth that they have to work hard to spend, then they should perhaps consider spending more on services that keep people happy and health and that keeps them from wondering why they work so hard to make others rich. 

    The problem is not the rich themselves.  The problem is a system that puts so little value on human existence or hard work when you work for someone else.

    We have a system that requires that some be poor, and then we castigate them for, well, being poor.

  • HBguy

    Crony capitalism seems to be the new boogeyman or libertarianism. If the capital markets don’t work well, well it’s not the market that is at fault, it’s crony capitalism. Te markets, in their pure libertarian sense, and crony capitalism is the sand in the gears.

    But libertaranism doesn’t seem to stop there, because apparently in the libertarian mind, crony capitalism involves two parties. The crony capitalist, and the government that aids and abets the cronyism. 

    So, it appears, if we just got rid of government, crony capitalism would fade and disappear because the markets would now work unfettered.

    The problem with this construct is that crony capitalism, and crony socialism, and crony golf clubism, isn’t driven by government or capitalist, or socialists. It exists because it’s human nature, and has existed in every single culture….forever. And the fact is, whether you like it or not, absent some culturally enforceable moral code, a democratic government is the only institution that exists to keep cronyism, immoral business practice and criminal behaviors in check. 

    Is government perfect at doing this? No. But reducing government regulation or the role of our courts at the behest of the people who practice cronyism is absurd. 

    Cronyism, as practice between capitalists and governments exists because there is profit to be made. for the capitalists, it can be increased earnings or sales, or reduced taxes. For the government officials, it’s campaign contributions, or the lure of jobs in the private sector. You could get rid of government in order to reduce this partnership. But that throws the baby out with the bath water and leaves no one to mitigate and regulate unethical business practices. But, if you could break the link between unethical business practices and government officials, you can limit the money and benefits that government officials take from those seeking favors and unfairly favorable treatment.

    My problem with libertarianism it that it too often ignores the facts of human behaviors that run counter to it’s theories. 

    • valley person

      You got it brother. They needed a new diversion away from market failure. We will see if this new meme catches on.

  • 3H

    I’m not sure why Libertarians are against Crony  Capitalism.  It is, after all, applying market forces to politics: willing buyers and willing sellers.

    • 3h, willing buyers and willing sellers alone don’t make markets moral. An additional requirement is that the buyer must own what he’s selling and have the right to sell it to someone else. In the case of crony capitalism, the government doesn’t (or shouldn’t) have the right to sell favors that cost other taxpayers, citizens, businesses, etc. money or opportunities. It’s like a thief stealing your car and then selling it to a third party.

      • valley person

        So is the person who purchases the influence as guilty as the seller? And if yes, why not simply ban campaign donations over say $50? 

        • Good question. I don’t know if legally the guilt should be the same for buyer and seller in such cases. Again, such transactions may be “legal” unless challenged on constitutional grounds. I’m saying that they aren’t moral.

          I don’t support campaign donation restrictions on the grounds that money is speech. If you don’t have the time or skills to argue for your political position, you should be free to spend your own money to “hire” someone else to make your case for you; be that a politician or initiative petition signature gatherer. Remember, freedom of speech doesn’t imply that what you speak is correct, or moral, or even legal. As long as you’re not crossing the line into yelling fire or what the courts call “fighting words” you have the right to say virtually anything in our free society.

          Those who advocate limits on campaign contributions often advocate for “public financing” of those campaigns. This bring up Jefferson’s famous quote:

          “To compel a
          man to furnish contributions of money for the propagation of opinions which he
          disbelieves is sinful and tyrannical.” And I wouldn’t want to force you to furnish contributions to propogate my ideas, no matter how correct they clearly are.

          • HBguy

            So then you must be against the Citizens United decision, because in effect the corporate management can use other people’s money (shareholders) to give to politicians and causes and “speech” the shareholder may not like. Now while it’s true that the shareholder can sell her shares, that means that you are forcing that shareholder to PAY TAX!!! (capital gains, assuming they made money on their investment) simply because they refuse to pay for the CEO’s preferred speech.

            There is nothing preventing people from voluntarily getting together and forming an organization that promotes a viewpoint. They’re called PAC’s, or 527’s or whatever. The problem is, when a shareholder is duped into believing he is investing in a commercial enterprise then ends up paying for the CEO’s golf buddy’s campaign. (or having to pay a tax to avoid the speech).

            For profit corporations should not be able to use shareholder funds for political speech. Or force them to pay taxes to “opt out” of supporting a viewpoint with which they disagree. It’s tyrannical. I believe Thomas Jefferson would agree with me.

          • Good try, but the situations are not the same. If I invest in a corporation it’s my responsibility to either find out whether political contributions are allowed, and if so under what conditions, or if I don’t find out and learn about such contributions later, my recourse is to sell the stock. In the last few years the risk of having to pay capital gains taxes has been pretty small, but it’s almost certainly a lower cost than picking up and moving out of the jurisdiction of the federal government.

          • 3H

            What if the CEO makes the decision to contribute corporate profits (which presumably means less for the shareholder), after I’ve invested?  

            You comment about capital gains is an evasion. Perhaps true now, but it will not always be true. 

            Do you think it is truly democratic to have a 1 share 1 vote (effectively, a 1 dollar – 1 vote) voting system?  

            Do you think that it might ultimately be bad for the concept of democracy that so much of our life is devoted to an undemocratic system?  The business model that most follow is oligarchic (or autocratic) in nature, not democratic?

          • HBguy

            It apparently wasn’t just a try. It was a bulls eye. 

            You’re response was. Yes, it’s OK to force shareholders to pay for speech they disagree with, or pay taxes. In effect, still making them pay. Your efforts to poo poo the tax cost (and other transactional costs associated with selling stock like broker fees by the way) as insignificant is odd, given how much libertarians love freedom, private property and hate taxes.The bottom line is, there is no reason why commercial for profit corporations NEED to pay for political campaigns. Remember, corporations are people. And Romney is correct in this instance. There is no law stopping any CEO, CFO, of WTF  from spending their own money on campaigns or “speech”. The have a myriad of ways of doing it. But Citizens United goes well beyond that. It says you can spend OTHER peoples money on speech.

            So, lets hear it from libertarians here. How many agree that it’s OK to spend other people’s money or force them to pay taxes to avoid it.

          • Lulz

            *crickets*

          • Steve Buckstein

            Of course it’s not OK to force them to pay taxes to avoid having their money spent on speech they disagree with. But since you specifically asked libertarians, I think they would tell you that capital gains shouldn’t be taxed at all…for any reason. The fact that they are taxed now doesn’t mean the government which taxes them can therefore prohibit any or every activity that might cause shareholders to incur those taxes.

          • HBguy

            I usually try to be polite. But are you kidding me? That’s your answer? How embarassing. It doesn’t even deserve an answer. It is enlightening only to the extent you have no defense to this critique of Citizens United.

          • valley person

            So we are back to square one. You are completely for a wealthy business spending as much as they want to influence legislators to pass whatever law serves them, but you are against “crony capitalism.” I’m afraid your circle cannot be squared Steve. 

          • Steve Buckstein

            Not exactly. I’m against legislators being able to pass any law that is unconstitutional, no matter how much money is given by anyone to their campaigns.

          • valley person

            If they pass laws that are unconstitutional, we have courts to deal with it. But its not unconstitutional to pass laws favorable to a given business. 

          • 3H

            …you should be free to spend your own money to “hire” someone else to make your case for you; be that a politician or initiative petition signature gatherer. 

            LOL..  so.. someone should be allowed to hire a politician??  Why change what is already working so well for so few?

          • Steve Buckstein

            Since you put it that way, I agree with whoever it was who said that you can’t buy a politician, but you can rent one. 

          • 3H

            You are the one who said my friend  🙂

      • 3H

        So… if a seller is selling something that was created or produced through the labor of workers who suffer in the course of that labor (but is legal) then that would be immoral too, right?  

        Lets say I own a shoe company, some of my product is either coming from sweat shops, or the workers exist in a condition of outright slavery, and while I can’t tell exactly WHICH one of those is that kind of shop, I do know there is an extremely good chance (say over 90%) that some of them are employing those practices. That would indeed be immoral, yes?  

        I could control the production of those shoes by building and maintaining my own factories, but paying wages in those factories will make my shoes more expensive. 

        I think there is what is missing in “moral capitalism” – the production of the goods that are being sold: the labor and production component.  If you focus only on buyers and sellers, you are missing a very large part of the picture. 

        In order for the buyer-seller as an example of the morality of capitalism, don’t you also need a rough equality between buyer and seller?   The buyer has to have the facts available to make good choice .  Facts that the seller might not want the buyer to have.  Some of which might even be legally protected as proprietary information? 

      • 3H

        But, prostitution would be moral right?  As long as both parties are willing and free to offer and accept the service.

        Would it make a difference, say, if one of the parties did so out of economic desperation?