Capitalists Don’t Like Capitalism
They do not like competition which is at the core of capitalism.
…
Mostly from article Fake Capitalism Is A Bigger Threat Than Socialism. Patrick Watson. February 27, 2021.
Many people are worried socialism will take over the U.S.
You hear it applied to state-dominated economies as varied as Venezuela, Norway and China.
These fears would be groundless if we do a better job of preserving capitalism.
…
Capitalism is all about free markets, “free” in the sense anyone has the opportunity to compete against anyone else.
Consumers decide who wins.
Largely that’s not what we have in the U.S. today, and it’s the way most “capitalists” want it.
They want the opposite: freedom to sell their wares to consumers who have no choice at all.
All businesspeople naturally want fewer or no competitors which means more profits.
Being a monopolist is highly profitable.
…
In their book The Myth of Capitalism: Monopolies and the Death of Competition, Jonathan Tepper and Denise Hearn talk about how one or two companies now dominate many economic sectors.
Those are exactly the kind of companies that made Warren Buffett, the Sage of Omaha, one of the greatest stock pickers in history and one of the richest men in the world.
Tepper and Hearn call Buffett the “antithesis of capitalism.”
“Buffett loves monopolies and hates competition.”
In his annual reports, he has approvingly quoted Peter Lynch, ‘Competition may prove hazardous to human wealth.’
True, what is good for the monopolist is largely not good for capitalism.
…
Buffett always tries to buy companies that have monopoly-like status.
Once, asked at an annual meeting what his ideal business was, Buffett stated it was one that had ‘high pricing power, a monopoly.’
The message is clear: If you’re investing in a business with competition, you’re doing it wrong.
Over the years, Buffett has followed his philosophy of buying into industries with little competition.
If he can’t buy a monopoly, he’ll buy a duopoly, only two companies making the product.
And if he can’t buy a duopoly, he’ll settle for an oligopoly, only a few companies.”
Buffett clearly prefers businesses that don’t have to compete.
That’s been good for his investors.
It’s even spawned an entire investment industry: hordes of value-investing Buffett acolytes look for stocks with “wide moats” that discourage pesky competitors.
...
However, in the long run monopolies are companies without competition and can lose something important: incentive to get better.
With no near-term risk, they stop innovating, and eventually customers drift away.
That’s not good for anyone.
The economy thrives when open competition encourages producers to deliver the best goods at the lowest prices.
It has a cost: some companies fail, but that’s also important, it signals those workers and investment money should find better uses.
…
The broader point here is leading “capitalists” are often nothing of the sort, particularly when they use political influence to carve out monopolies.
That’s neither capitalism nor socialism.
It is something completely different: crony capitalism, corporatism, corporate statism—the terms vary.
It promotes wealth concentration that leads to economic stagnation, political instability and public discontent.
…
So, if you fear socialism the best way to stop it is to clean up capitalism.
That means stop letting government policy favor large, influential companies.
Let everyone compete on an equal footing, and give consumers and workers freedom to choose what they want.
Conversely, if you want to bring on socialism, just pretend nothing is wrong and stay on the present course.
Fake capitalism isn’t working for most people.
Eventually, tired of “capitalism” many will demand something else - socialism.
…
A short video discussing monopoly:
… …
Comments
Post a Comment