Free Markets Vs America
Move over fakeohs, the Capitalists are coming
You may have noticed some extra-ordinary events in the world and the great scramble as to how to react to them. If you haven’t, lucky old you.
There is an argument that what we are seeing is capitalism unbounded and our response must be some other ideology - some mimsy form of socialism is the most popular option, presented half-heartedly.
The ideological core of socialism is the direct state control of the commanding heights of the economy, and the problem is that nobody believes in that any more. If you had asked a left-wing meeting in 1948 who in the audience was willing to step up and run a coal mine or a steel plant, a forest of hands would go up. Ask the same now about Britter, or a state-run online retail and video outfit called what, Thames I guess, given the UK’s chronic centralism, not so much.
Fundamentally, at the end of this crisis, the commanding heights of the economy will still remain wrapped in limited liability companies. It’s going to be capitalism all the way down.
What makes capitalism a more effective economic organisational form than state run industry is every ecosystem’s great gardener, death. And competition is what brings death. And competition runs on free markets.
There is a cottage misinformation industry dedicated to promoting the hokum that a free market is a market free of regulation. It is in fact free of information asymmetry, abuse of market power, lies and deceit. The free market does not exist outside of, or above the state. It doesn’t exist absent the state. One of life’s quiet pleasures this 30 years past has been asking Silicon Valley libertarians when they are relocating to Liberia (substitute your favourite poor country in civil war of choice here - Syria? DRC?).
The same misinformation gang spout conspiracy economics based around a sinister cult figure called the Rational Economic Man. In this voodoo economics profit margins tend to zero, supply chains spontaneously form, civil servants are stake- and crucifix-wielding golems conjured from garlic whose touch kills entrepreneurs (Peace Be Upon Them).
Well, them as actually run US companies are weeping, beating their breasts and rending their garments as the Trumpnado sweeps their supply chains away.
And profit margins ain’t tending to zero. Everything they learn ya at Silicon Valley Hoodlum High is about network effects, moats, market protection and margin increase. Increase, make ‘em go up. Apple takes 50% of money spent in apps on its phones.
Rational Economic Man is not a moral exemplar and people who run capitalist companies are strongly motivated to make money. Their job is to optimise the firm, and that’s ok. If they can offload costs to the state or someone else, they will always do that. The job of a liberal democratic government is to optimise the country, and the world.
I don’t want to disappoint long term readers who are expecting me to recommend Abby Innes’s Late Soviet Britain, Why Materialist Utopias Fail here, and there I have.
There is a direct clash between “optimise my firm by firing carbon up the lum for cheap energy” and “optimise the world by going to net-Zero”. That is not an ideological difference, that’s how it’s supposed to work.
The fantasy of cultists like Marc Andreeson, Peter Thiel and Balaij Srinivasan is that their big boy brains negate the power of the state. Well son, the state has clubs and bayonets, and if you don’t like the liberal democratic state with its checks and balances, rule of law and controlled monopoly of violence, let me introduce you to your new master, Johnny Warlord, he’s the one over in the next room raping your family while his pals beat you with hammers.
The US has upturned the global order and a new one must be built. Let us begin by dismantling American control of the internet and digital industries. And by us I mean the European Union which Scotland, and preferably the rUK also, should rejoin.
Regulate play stores to cut Apple’s margins, stop Amazon being both a retailer and marketplace, split Android from Google, free AWS and break Google Ad Brokerage out from its search division. And more. Lets have some competition, Free Markets are back, baybeee.