3 ms·

Is it still Capitalism when there is regulatory capture?

by S0ckpupp3t 8y ago

Buldak 8y ago
To the extent that regulatory capture is itself an inevitable outcome of capitalism, maybe.
- llcoolv 8y ago
  This is the same as suggesting that organized crime is an inevitable outcome of human ambition. So sad.
- TangoTrotFox 8y ago
  You can't have regulatory capture without regulations! That is mostly tongue in cheek of course, but it does really bring up a point in that if there were stringent controls on regulation it could help minimize the issue. And if nothing else there's some beautiful irony in regulation being in need of regulation.
  - JumpCrisscross 8y ago
    > if there were stringent controls on regulation it could help minimize the issue It would just shift attention to the organs of government controlling said regulation. The insight of democracy is it seeks to balance, not suppress, human nature. Capitalism and democracy healthily co-exist because the former produces the private property rights that keep state power in check. Keeping that checking function itself balanced is the crisis–and opportunity–of our modern era.
  - dsfyu404ed 8y ago
    Automatic, mandatory scheduled review for regulations and mandatory sunset provisions for laws would be a damn good start. It would solve a lot of social issue too.
    - TangoTrotFox 8y ago
      Absolutely. Another idea here would also be to require more than just a majority to pass a law, or 'refresh' it. It never made any sense to me that laws, treaties, and other decisions that seriously affect 100% of people end up getting passed by 51/49 majorities. If laws required e.g. a 75% vote, then we would need to work with one another to create ideas that are globally beneficial, ideally helping to mitigate some of the increasing partisanship today. Given that we're split just about down the line it means both parties will invariably have their time in control which removes the necessity of working together. So people are just increasingly radicalizing on one side or the other and then hoping for 'their side' to force whatever they want done, through. It doesn't feel like this is really in the spirit of democracy. Of course this is all mental masturbation since none of this will ever happen. But for the next nation starting from scratch, we will have an even greater base of knowledge to grow from. I think there's no doubt that the United States went from backwoods outpost to most powerful nation, in the blink of an eye, largely because we were able to learn from and avoid the mistakes of other nations that had become so entrenched in their ways that change became unreasonably difficult -- similar to the state we are in today.
philipov 8y ago
I think it's more appropriate to call it Corporatism now.
ChristianBundy 8y ago
Yes. Just like socialism is still socialism when there's corruption. See also: https://en.wikipedia.org/wiki/No_true_Scotsman https://en.wikipedia.org/wiki/No_true_Scotsman We need to accept that capitalism seems to be prone to problems relating to regulatory capture and find a solution that resolves these issues. The idea of a perfect and pure "capitalism" is a myth.
- anon49124 8y ago
  True. There's never has, and never will be, any "pure," utopian socialism nor libertarian anarchism, just messy reality with varying levels of gotchas, power concentrations, totalitarianism and corruption. The best people can do is diffuse power and install individuals whom are fair, reasonable and put society / greater good before personal gain... without many of these sorts of people, the crooks win and tear civil society down.
frgtpsswrdlame 8y ago
What is with this ever present desire to blame concentration on regulatory capture? When Adam Smith wrote about competition he was writing about pre-industrial business, small shops with apprentices and journeyman, mostly horizontal and small organizations. With the industrial revolution that was all turned on it's head as economics of scale began swamping other factors. So we went from lots and lots of small competitors to (just) lots of medium competitors. And as technology has advanced economies of scale just get better and better so now we're down to a few large competitors. Concentration and the diminishment of competition is a totally expected result of giant technology gains.
Avshalom 8y ago
Capitalism, as distinct from just a market (let alone a free market) economy, is based on the idea that ownership creates value thus entitling the owners of capital to some fraction of it's production and to a lesser extent the idea that anyone-can/everyone-should be an owner (as opposed to a feudal system with hard line serf-lord/owner-renter separation) Regulations, regulatory capture, corruption, market failures; that's all broadly orthogonal.
notabee 8y ago
Yes, because any system that allows corporate entities to amass significant wealth will see those entities using that power to create and capture regulation for their own benefit. Unless a counter mechanism to mass media and bribing politicians can be created, the general public and their governmental power will inevitably be neutered by wealthy interests. Regulatory capture and monopolies are features of capitalism, not bugs.

Is it still Capitalism when there is regulatory capture?

Buldak 8y ago

To the extent that regulatory capture is itself an inevitable outcome of capitalism, maybe.

llcoolv 8y ago
This is the same as suggesting that organized crime is an inevitable outcome of human ambition. So sad.
TangoTrotFox 8y ago
You can't have regulatory capture without regulations! That is mostly tongue in cheek of course, but it does really bring up a point in that if there were stringent controls on regulation it could help minimize the issue. And if nothing else there's some beautiful irony in regulation being in need of regulation.
- JumpCrisscross 8y ago
  > if there were stringent controls on regulation it could help minimize the issue It would just shift attention to the organs of government controlling said regulation. The insight of democracy is it seeks to balance, not suppress, human nature. Capitalism and democracy healthily co-exist because the former produces the private property rights that keep state power in check. Keeping that checking function itself balanced is the crisis–and opportunity–of our modern era.
- dsfyu404ed 8y ago
  Automatic, mandatory scheduled review for regulations and mandatory sunset provisions for laws would be a damn good start. It would solve a lot of social issue too.
  - TangoTrotFox 8y ago
    Absolutely. Another idea here would also be to require more than just a majority to pass a law, or 'refresh' it. It never made any sense to me that laws, treaties, and other decisions that seriously affect 100% of people end up getting passed by 51/49 majorities. If laws required e.g. a 75% vote, then we would need to work with one another to create ideas that are globally beneficial, ideally helping to mitigate some of the increasing partisanship today. Given that we're split just about down the line it means both parties will invariably have their time in control which removes the necessity of working together. So people are just increasingly radicalizing on one side or the other and then hoping for 'their side' to force whatever they want done, through. It doesn't feel like this is really in the spirit of democracy. Of course this is all mental masturbation since none of this will ever happen. But for the next nation starting from scratch, we will have an even greater base of knowledge to grow from. I think there's no doubt that the United States went from backwoods outpost to most powerful nation, in the blink of an eye, largely because we were able to learn from and avoid the mistakes of other nations that had become so entrenched in their ways that change became unreasonably difficult -- similar to the state we are in today.

philipov 8y ago

I think it's more appropriate to call it Corporatism now.

ChristianBundy 8y ago

Yes. Just like socialism is still socialism when there's corruption. See also: https://en.wikipedia.org/wiki/No_true_Scotsman https://en.wikipedia.org/wiki/No_true_Scotsman We need to accept that capitalism seems to be prone to problems relating to regulatory capture and find a solution that resolves these issues. The idea of a perfect and pure "capitalism" is a myth.

anon49124 8y ago
True. There's never has, and never will be, any "pure," utopian socialism nor libertarian anarchism, just messy reality with varying levels of gotchas, power concentrations, totalitarianism and corruption. The best people can do is diffuse power and install individuals whom are fair, reasonable and put society / greater good before personal gain... without many of these sorts of people, the crooks win and tear civil society down.

frgtpsswrdlame 8y ago

What is with this ever present desire to blame concentration on regulatory capture? When Adam Smith wrote about competition he was writing about pre-industrial business, small shops with apprentices and journeyman, mostly horizontal and small organizations. With the industrial revolution that was all turned on it's head as economics of scale began swamping other factors. So we went from lots and lots of small competitors to (just) lots of medium competitors. And as technology has advanced economies of scale just get better and better so now we're down to a few large competitors. Concentration and the diminishment of competition is a totally expected result of giant technology gains.

Avshalom 8y ago

Capitalism, as distinct from just a market (let alone a free market) economy, is based on the idea that ownership creates value thus entitling the owners of capital to some fraction of it's production and to a lesser extent the idea that anyone-can/everyone-should be an owner (as opposed to a feudal system with hard line serf-lord/owner-renter separation) Regulations, regulatory capture, corruption, market failures; that's all broadly orthogonal.

notabee 8y ago

Yes, because any system that allows corporate entities to amass significant wealth will see those entities using that power to create and capture regulation for their own benefit. Unless a counter mechanism to mass media and bribing politicians can be created, the general public and their governmental power will inevitably be neutered by wealthy interests. Regulatory capture and monopolies are features of capitalism, not bugs.