Definition
of classical capitalism:
1. Transparency in markets,
including pricing, information on quality and reliability of
products, sellers and buyers, and of rules of conduct and rights
governing all participants.
2. Risk is tightly bound to
reward, i.e. everyone has skin in the game, those who lose are forced
to absorb the entire loss.
3. Open competition, i.e. no
monopolies or cartels limiting supply or setting prices.
4.
Free flow of capital and labor.
5. Everyone pays the same
rates of taxes, duties and fees on every transaction.
Needless
to say, what is presented as "capitalism" in America today
is not actually capitalism; it is monopoly-state-socialism for the
wealthy, a kleptocracy incompetently cloaked by a rigged simulacrum
market in which risk and losses are transferred to the debt-serfs and
tax donkeys and the "socialism for the rich and powerful"
is enforced by a pay-to-play simulacrum democracy and kleptocratic,
totalitarian central bank, the Federal Reserve.
In this
winner take most, anything goes if you're a rich casino, the weaker
players are ruthlessly stripmined and exploited and those enterprises
without political protection are cannibalized by rapacious, predatory
monopolies and cartels.
Parasitic elites take a skim from
every table: student loans over here, state junk fees over there;
everyone gets clipped by self-serving insiders and entrenched interests.
Transparency is an illusion. Complexity thickets protect
monopolies and cartels, and the fine print... try getting a set price
for healthcare services. (You must be joking.) Sign the form for the
$30 oil change and come back to an $800 bill for "work you
authorized." (You didn't read the fine print? Too bad.)
Quality has gone downhill across the board but there's no
recourse or competition. All the items regardless of brand come from
the same factory in China. The once-proud American brand's warranty
is only one year, so tough luck, bucko, the repair bill for the
defective $5 sensor will cost you as much as a new range.
In
American "capitalism”, the name of the game is scale up with
cheap debt supplied by the Federal Reserve, use the "Fed free
money" to buy up any potential competitors and then start buying
back your own shares, jacking your share price even as sales and
profits stagnate.
Once
you're too big to fail or jail, then you can gamble to your heart's
content because all the winnings will be yours to keep and if you
lose big, the Fed or the Treasury will step in and transfer the
losses to the debt-serfs and tax donkeys.
In America, as
Warren Buffett jacks up the price of some stock to maximize his
profits and add more billions to his net worth, and Amazon uses its
quasi-monopoly power to relentlessly jack up the price of Prime
membership, nobody asks Warren or Jeff "don't you have enough
already?"
The answer is "no". It's never
enough, because as long as the Fed and federal government enforce,
enable or allow your monopoly, quasi-monopoly or cartel to kill
transparency and competition, and offer you limitless "Fed free
money" while students pay 8% on their loans, then why not add
another $10 billion to your personal wealth?
Go ahead and
lie, cheat, embezzle, rig markets, commit fraud, and collude -
everything is allowed if you're a powerful corporation because all
your execs have get out of jail free cards from the Department of
Justice. Nobody in Corporate America ever goes to prison no matter
how egregious the fraud or theft. And you get to keep all the loot,
other than a wrist-slap fine if you're caught. But that's just a
modest cost of doing business in American "capitalism."
If this "capitalism" was actually attractive to
capitalists, why would everyone pile into the same six Big Tech
monopolies? Is that really the only opportunity left to "create
shareholder value," to pour hundreds of billions of dollars in
"Fed free money" into a handful of Big Tech monopolies?
Paraphrasing the late Immanuel Wallerstein, "Capitalism"
is no longer attractive to capitalists. This "capitalism"
is only attractive to parasites, predators, kleptocrats, legalized
looters, embezzlers, fraudsters and all those insiders whose palms
get greased along the way.
If you think this "capitalism" is sustainable, the near future holds a big surprise. The Fed is now under federal control and will no longer support debt schemes. Donald Trump is heretofore the Fed Chairman, essentially. As the Central Banking System is brought down in the next couple of years, a return to classic capitalism will return with a shift to the new Quantum Financial System.
Adapted from blog of Charles Hugh Smith, October 30, 2020, in oftwominds.com
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