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The rich don't need the government to exert influence and rig the game in their favor. For example, they can: - buy up their competitors to create monopolies -
by tszyn 12y ago
The rich don't need the government to exert influence and rig the game in their favor. For example, they can:
- buy up their competitors to create monopolies
- use one monopoly to build another one (e.g. "if you buy our competitor's coal, you can't use our railroad")
- gain control over natural resources
- collude with their competitors
- abuse the legal system to kill competitors
- hire marketers and fund NGOs for propaganda purposes
- control the media
etc.
Once they have gained control over an industry, let's say steelworking or railroads, they become like feudal lords in that industry, setting wages and prices however they wish.
Power is subject to a positive feedback loop, whether it's political power or economic power. Having power makes it easier to gain more power. That's why it will always tend to concentrate in the hands of the few.
Government power in a democracy comes from a game of "artificial equality": elections in which every person has one vote, regardless of their power "in real life". (This is different from the economy, where your power is proportional to your wealth.) For this reason, it can act against the natural tendency towards concentration of power.
- jmckib 12y agoI wasn't suggesting that we scrap the Antitrust Division of the US Department of Justice specifically. You make a good argument that we still need them. However, there are many other areas in which the government could be scaled back without incurring a robber baron scenario. Do some googling for "regulatory capture" and you'll see what I mean. Simplifying the tax code and the bureaucracy that comes with it is one good candidate.
- tszyn 12y agoI've noticed that most examples of regulatory capture provided in the Wikipedia article involve regulatory agencies failing to enforce rules on selected companies (e.g. BP was allowed to drill in the Gulf of Mexico without doing the environmental legwork, Goldman Sachs was allowed to manipulate the commodities markets, etc.), which resulted in Very Bad Things happening. These cases don't show that "big government" regulation is bad. They show that failure to regulate is bad. Off the top of my head, I can't think of too many examples of companies using the government to their own ends. OTOH, I can think of many examples of government restricting the freedom of corporations in the name of some social good. For this reason, I think that if we scaled back the government, corporations would have more power, not less. (Not to mention other negative effects of government abdicating its responsibilities in particular areas.)