The author of the attached article, the former CEO of Office Depot Steve Odland, is right on the money. In the face of a deeply crony economic and political system, one which walls off opportunity for many while unfairly rigging the game for the few, it is natural for relatively politically unsophisticated young people to bend their ears to the siren song of socialism. That crony capitalism is itself a form of socialism in many regards is lost unfortunately on many. That the current activist government, one which has grown nearly unchecked for 85 years, is the reason one has a hard time getting ahead is often not understood. GE, Goldman Sachs, Boeing, Caterpillar, Berkshire Hathaway, General Motors, Daimler Chrysler, Google, Citibank, Dow Chemical, Monsanto, ADM, are all partners with big government. Government feeds these entities. It doesn’t keep them in check. The marketplace does that. Government, for all its regulators, and laws, and Dodd-Frank, and the Community Reinvestment Act, and the EPA, and the FDA, etc. FACILITATES cronyism and insulates the incumbent players. It is the market which creates new opportunities. Not government. Socialism is more of the same.
But socialism is about giving people “free” stuff, so as we said it is an easy sell to the politically unsophisticated.
Crony capitalism creates an uneven playing field and benefits the few over the many. It could be a favor in the regulatory code, or a tax exemption that gives a company or industry – almost inevitably incumbents who already are successful – a leg up. Cronyism also diminishes innovation. When a company can prosper on a subsidy rather than by winning in the marketplace, complacency sets in and breakthroughs plummet. All this places limits on our quality of life.
In a free-market, capitalist system, businesses should compete unassisted, and be rewarded only if their goods and services successfully meet consumer demands. Merit and fairness triumph over favoritism. But crony capitalism distorts this arrangement, often driven by our money-lubricated political campaigns. It erodes trust in our economic system, our government, and our businesses. A sustainable capitalism – one that fosters equal opportunity and rewards risk-taking and innovation – is what we all should seek. Fortunately, it is within reach.