Laissez-Faire to Corporatism: An inevitable transition? (1 Viewer)

[CRR]

OK, so lemme define a few things for those of you who don't know some terms:
Oligopoly - A market condition in which sellers are so few that the actions of any one of them will materially affect price and have a measurable impact on competitors.
Laissez-Faire - An economic doctrine that opposes governmental regulation of or interference in commerce.
Corporatism - Of, relating to, or being a corporative state or system. Think fascism.

So, we know that capitalism will inevitably narrow down the number of companies to just a few (social darwinism), we have seen this in the automobile industry. 1900 - 400 companies. 1960 - GM, Ford, and a few other companies. Total companies in 1960 - about 5. We have witnessed it in Japan with the Tzaibatsus, it went from several hundred to several (I can't find the precise satistic). So, we know 'social darwinism' brings the number of companies down; but the few that are left are corporations and that is a flaw in laissez-faire capitalism according to adam smith, for it limits competition. It leads to oligopoly. Why? Because the corporate aristocrats are greedy and want more money. So, in the meantime, who is running for political offices? People with money. Who has money? The corporate aristocrats. So who runs for political offices? The corporate aristocrats. They can afford big offices, like president or senator. So, we have an oligopoly and corporate aristocrats elected for politicians, what is preventing the government from ceasing the government from being laissez-faire and making it illegal to buy foreign goods, and necessary to buy domestic goods? This makes the corporate politicians richer.

That, imho, is the flaw of laissez-faire capitalism.

 

[santaslayer]

wtf?......laissez faire capitalism?
but we dont ave this system in australia do we?
australia is more of a market economy, whereby it adopts a 'laissez faire approach, but at the same time, implements effective checks and balances that ensure appropriiate levels of government intervention occurs at the same time......

(or are u talking about other countries?)

i dunno what ur talking about, ur wording is complicated for me...maybe im just dumb LoLz
sorry

 

[George W. Bush]

Your argument has a rather large logical flaw which lies with:

1. Assume the economy is free market.
<stuff>
n. These people get elected to government.

 

[CRR]

there is capitalism where the government has laws interfering with the economy.
laissez-faire is capitalism without government interference.
I was reffering to a laissez-faire NOT A non-laissez-faire capitalism.

 

[CRR]

What is preventing the president or CEO from saying: You must vote for me or you are fired. Which he could do because it is a BUSINESS DECISION which, in laissez faire, can't be intervened with.

 

[euripidies]

"?......laissez faire capitalism?
but we dont ave this system in australia do we?
australia is more of a market economy"

we dont really have laissez faire in Australia yet but we are moving that way and on our economy i think you would call it a mixed economy because we have some nationalized and some private but thats changing.

But economic systems that do intervene into the market such as Keynesian economics also lead us down the road of Corporatism. How? Well john Keynes was trying to solve a problem in classical economics which was when theres a economy wide down turn they cant deal with it every one pulls there money out of everything thus aggregate demand goes down. This aggregate demand is what Keynes identified as the driving force of an economy over competition (smiths idea). Now in Keynesian the government plays a major role in stoping a market wide problem they do this through subsidies, other protectionist methods and cutting corporate tax. Now wile increasing government spending there also reducing government revenues so they have to increase taxes on the middle classes. Anyways this subsidising of large business means that they are able to employee more people thus more people being able to spend thus keeping or driving up aggregate demand but at the same time spending is inflationary so they dont allow wage levels rise if this continues for a low time people become underemployed. Anyways the major problem with Keynesian economics is it causers massive budget deficit seen in the USA continuing this process would just increase this deficit wile the corporation has a cash flow injection and lower taxes thus they do preform better while the governments powers go down because their stuck with the bill. So as you can see Keynesian wile helping out the corporation in getting more money less taxes and cheaper workers which boost the economy, governments get less taxes in and are spending more basically digging themselves into a whole where the powers are greatly reduced because of lack of finance.