Corporatism vs. Capitalism

This image makes excellent and foundational points about why increased regulations rarely solve problems.  Why?  Because when you peel back the layers, the large corporations turn out to be the authors and the beneficiaries of the regulations.

There are many ways to do that.  Even in business, requests for goods and services are often subtly tailored to steer purchases towards certain vendors.  The same thing happens in government.  The IRS exceptions or language for certain laws may not mention a corporation by name, but it just so “happens” that the preferred corporation is the only one meeting the criteria.

The winners are the large corporations and the politicians that they essentially pay off during the process.  The losers are the smaller businesses, the consumers and the taxpayers (of course those three overlap in places).

And once regulations are in place then two things are nearly certain: They will never disappear and they will continue to grow.

This also applies to the bailout / “too big to fail” nonsense.  What do you think would happen if you could go to Vegas knowing that you would get to keep any winnings but that taxpayers would pay for any losses?

When in doubt, always go with less government and less regulations.

5 thoughts on “Corporatism vs. Capitalism”

  1. I’m thinking that hate is the pathway to deception. It deceives terrorists, that’s easy to see. But it also deceives those who hate large corporations into believing that the corporation’s buddies in government are taking a stand for us “regular folk”. It would be laughable if it were not so tragic.

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  2. An excerpt from the book “Regulation, A Primer”.

    Large biotechnology companies join with food safety activists to encourage stricter regulation of new foods involving genetic engineering, thus putting smaller competitors who cannot afford the regulatory compliance costs at a disadvantage. Tobacco companies supported legislation that would have required cigarettes to receive FDA premarketing approval, which would make it harder for new brands to enter the market. Solar power manufacturers support regulation that inhibits the production of conventional, competing sources of power (oil, coal, and gas).

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  3. Defenders of regulation would have us believe it’s all about protecting us from being poisoned and such. That’s what is brought up when any talk of reforming regulatory policy in order to stimulate the economy.

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  4. It’s really too bad that no one saw this coming and designed a foolproof way to prevent companies from using the federal government to get their competition out of business. Oh, wait, that would have been the much-maligned and gutted Commerce Clause and the doctrine of enumerated powers.

    I’ll also point out that super-high corporate tax rates encourage this as well: companies that might pay $9 million in corporate taxes will ferociously lobby to get out of paying $35 million in federal taxes.

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    1. I don’t think businesses should be taxed. At all. It’s nothing but a big shell game. People wind up paying those taxes – employees and officers, shareholders, and most of all, the company’s customers. Socking it to The Man only results in higher prices on goods and services. The company must pass on these added costs or else risk going under completely.

      A corporation is not a person, but simply a business concept that truly exists only in the abstract. It requires human beings to make decisions and otherwise act on its behalf. Why then, would you try to levy taxes on a business concept instead of the people who actually profit?

      Heck, when I was looking at setting up a small corporation for my friends and I to use on a business venture, I learned a quick accounting technique that eliminates taxation anyway – but I never got the chance to try it out and it probably wouldn’t work for large corporations anyway, just little dinky ones with relatively modest earnings.

      I think all the taxation that the business pays should be levied solely on the people drawing a salary from its operations, and even that should be kept to a minimum – meaning those persons (from CEO down to janitor) should pay no greater a percentage than anyone else.

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