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Cronyism, referring to a system where incompetent agents are given special favors, doesn't survive in the free market - merciless competition destroys any under

Cronyism, referring to a system where incompetent agents are given special favors, doesn't survive in the free market - merciless competition destroys any underperfoming organization. Cronyism only exists when competition doesn't work by means of a government. Get some politicians, create regulations, build a monopoly. No matter how uncompetitive it is, you're still a billionaire.

dragonwriter 11y ago
> Cronyism, referring to a system where incompetent agents are given special favors, doesn't survive in the free market The "free market" in which that is a defensible claim is a counterfactual construct that is sometimes useful as a simplified analytic model, but fundamentally incompatible with the behavior of real human beings and conditions in the real world. > merciless competition destroys any underperfoming organization. In real unregulated markets, that may happen initially, and the most successful parties in that situation mercilessly move to lock-in advantages against future competitors by use their economic power they have as a result of that success to monopolize key inputs, preventing competition. > Cronyism only exists when competition doesn't work by means of a government Yes, and a particular, common, real-world version of cronyism by which government structures the economic regime to favor the interest of the capital-holding class was identified by its critics in the 19th Century, and given the name "capitalism".
- pdeuchler 11y ago
  By this argument we should just accept that "communism" involves the widespread murder of political enemies, as that has always happened in "communist" countries.
- dovereconomics 11y ago
  >government structures the economic regime to favor the interest That's it. If there's central planning(no matter to whom) it's socialism. And, regarding 'lock-in advantages', without a government-backed credit expansion, it'd be really difficult for companies to get as much market cap.
  - dragonwriter 11y ago
    > If there's central planning(no matter to whom) it's socialism. No, the dominant system of the developed world in the 19th Century that socialists reacted against and coined the word "capitalism" to describe isn't socialism.

dragonwriter 11y ago

> Cronyism, referring to a system where incompetent agents are given special favors, doesn't survive in the free market The "free market" in which that is a defensible claim is a counterfactual construct that is sometimes useful as a simplified analytic model, but fundamentally incompatible with the behavior of real human beings and conditions in the real world. > merciless competition destroys any underperfoming organization. In real unregulated markets, that may happen initially, and the most successful parties in that situation mercilessly move to lock-in advantages against future competitors by use their economic power they have as a result of that success to monopolize key inputs, preventing competition. > Cronyism only exists when competition doesn't work by means of a government Yes, and a particular, common, real-world version of cronyism by which government structures the economic regime to favor the interest of the capital-holding class was identified by its critics in the 19th Century, and given the name "capitalism".

pdeuchler 11y ago
By this argument we should just accept that "communism" involves the widespread murder of political enemies, as that has always happened in "communist" countries.
dovereconomics 11y ago
>government structures the economic regime to favor the interest That's it. If there's central planning(no matter to whom) it's socialism. And, regarding 'lock-in advantages', without a government-backed credit expansion, it'd be really difficult for companies to get as much market cap.
- dragonwriter 11y ago
  > If there's central planning(no matter to whom) it's socialism. No, the dominant system of the developed world in the 19th Century that socialists reacted against and coined the word "capitalism" to describe isn't socialism.