Billionaires, Economics, Libertarians

Save capitalism from capitalists!

Maxim: “Save capitalism from capitalists.”

Source: It’s not original to this website.  It’s a quote and even derived from the title of a book: Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity (2003) by Raghuram Rajan and Luigi Zingales.  Additionally, one form or other of this statement has been made by everyone from Theodore Roosevelt to Thomas Picketty (Capitalism in the 21st Century) to Rutger Bregman (Utopia for Realists).

Purpose:  Catchy because its short, counter-intuitive, and provocative.  Rebuts false dichotomy of “capitalism” as equaling unregulated free markets and anything else as “socialism.”

Explained:  Those who acquire wealth and power in a free market have a tendency to “pull up the draw bridge” by destroying the very free market from which they benefited through monopolization and regulatory capture to defeat startups and small innovative businesses, and reduce opportunity for a large portion of the population.  The Rajan and Zingales book is summed up in Wikipedia as thus:

The book is neither a defense of pure laissez-faire capitalism, nor is it an anti-capitalist polemic. Instead, the authors develop the following arguments in the book:

  • The free market is the form of economic organization most beneficial to human society and for improving the human condition.
  • Free markets can flourish over the long run only when government plays a visible role in determining the rules that govern the market and supporting it with the proper infrastructure.
  • Government, however, is subject to influence by organized private interests
    Incumbent private interests, therefore, may be able to leverage the power of governmental regulation to protect their own economic position at the expense of the public interest by repressing the same free market through which they originally achieved success.
  • Thus, society must act to “save capitalism from the capitalists”—i.e. take appropriate steps to protect the free market from powerful private interests who would seek to impede the efficient function of free markets, entrench themselves, and thereby reduce the overall level of economic opportunity in society.

The authors offer the following recommendations:

  • Reduce incumbent capitalists’ incentives to oppose markets, especially by limiting the concentration of ownership of productive assets.
  • Provide a social safety net for the economically distressed to help maintain broad political support for free markets.
  • Keep the borders of the economy open to support free trade and maintain a high level of competitive pressure on incumbent firms.
  • Educate the public regarding the benefits of free markets to build political support for free market policies, or more specifically, oppose governmental interventions in the market designed to protect incumbents at the expense of overall economic opportunity.

It reveals the truth about free markets to be fundamentally opposite of current conservative dogma.  The most powerful and wealthy capitalists are the biggest enemies of a free market, i.e., “capitalism” because a free market is fundamentally against their interests to maintain power and fend off competition.

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