Saturday, October 13, 2012

Ready for this one? It's called "Inclusive Capitalism"

By, Chris Rossini
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Not long ago, we covered Richard Branson's "Plan B" For Capitalism; and just yesterday, we talked about the Government / CEO tag team who are acting as "revenue raisers" by calling for higher taxes.

Well, the hits just keep on coming.

Hot out of the oven, and launched just two days ago, comes The Henry Jackson Initiative; and it's yet another crony (government + business) endeavor to mold our society by pushing an idea known as "Inclusive Capitalism."

Their website talks about the leadership of this initiative:
The Task Force is co-chaired by Dominic Barton, Global Managing Director of McKinsey, and Lady Lynn Forester de Rothschild, CEO of EL Rothschild, and is made up of business leaders, academics and senior policy makers.
You can't have a central planning party without a Rothschild, right?

So there you go, now it's a party.

BloombergBusinessweek acts as a mouthpiece in announcing the launch of this initiative. And boy do they start off with a whopper:
Capitalism can get a bum rap these days: If free markets are so great, why are there so few jobs, a shrinking middle class, and so many companies that still put profits ahead of the common good?
Are they trying to tell us that the U.S. is a free market?

Sounds like it to me.

I guess when half of the population is receiving government assistance and close to 50 million live on food stamps, they can get away with calling the outside world a free market.

I quickly took a mental tally of the small circle of friends that I have, and here's what I came up with:
  • I know an anesthesiologist, and he tells me that most of his day is spent filling out government paperwork.
  • I know several people in real estate that have told me about the minutia of regulations...from what they can say on the phone, to what size the print in their advertisements can be.
  • I work for a tech startup, and the process of taking the idea into an actual business required a mind-numbing amount of form after form.
  • Right here on The Robert Wenzel Show, Peter Schiff described how regulations have forced him to open up brokerages outside of the U.S.
  • In my town, you can't even sell your junk to other people without first paying $15 for a yard sale permit. And you're only allowed to do it twice per year.
The idea of a free market waved bye-bye to the U.S. a long time ago. We live in a managed economy petri dish.

BloombergBusinessweek also has no idea what the function of profits and losses are. 

They are signals!

In our world of limited resources, profits & losses serve entrepreneurs by letting them know if they are allocating resources efficiently. That is, are they creating things that people urgently desire, or not?

Apple just closed down their music social network, called Ping. Why? It wasn't profitable. Customers didn't want it.

Google shuts down services very often...I can recall many former services that they provided that no longer exist. People didn't desire them urgently enough.

In the marketplace, you must satisfy the urgent desires of customers. This isn't The Garden of Eden. Land, Labor, and Capital are not in infinite supply. They must be allocated, and profit & losses are the signals that light the way.

Government is not concerned with such things. It doesn't care much for profits and losses. If The Postal Service losses $10 billion in one year, it doesn't shut down. If Solyndra blows through billions, so what?

Just turn the faucet...the taxpayer dollars never stop flowing. And that's what government does. Without profits & losses, government is at all times throwing darts into a pitch black room.

The consequences are what we see around us. The constant misallocation of resources come at a price. The economy keeps getting twisted into a bigger and bigger Gordian Knot.

Then BloombergBusinessweek has the guts to call this a free market, and featuring a story on another central planning initiative seeking a more "Inclusive Capitalism." A capitalism, which, of course, means siphoning off even more resources to be wasted:
As former Treasury Secretary Larry Summers, another task force member, argued to the group, real inclusion can only come if the top tier takes on a higher burden in taxes to help fund investments that promote greater opportunities.
Removing capital from private hands, and giving it to government and its "partner" businesses only tightens the noose.

We're quickly running out of air, and the only thing that can cut this rope is for enough people to understand what a free market really is.


  1. I would like to suggest one simple axiom for defining capitalism(that would be a test as well):

    Capitalism(and free markets) has NOTHING to do with government, and vice versa.

    It is a simple axiom/test. You cant call it capitalism or a free market if government is involved on any level. I am pretty sure it holds in all cases if you stop and think about it and test apply it to a variety of scenarios.

  2. Great post. I've come to the conclusion that the world is about PR, Marketing, creating illusionary stories. This is what politics is about, it is not about what is rational or makes sense to most.

    Unlike pre-1913, and in particular post 1935, America (and now the world) has become a tightly controlled, scripted, non-free place. The masses allow, and many applaud as they receive transfers from the central authority. Many do not understand the freedoms they have lost(or accept for fear of losing their transfers). Many do not understand the transfers at present are from phony money that will go bye bye soon enough.

    German Chancellor Angela Merkel is booed continuosly for over 13 minutes in Stuttgart Germany
    This would have been unthinkable in staid German society in years past.

    Perhaps the world is beginning to wake up to how bad it really has gotten.

    Will America ever wake up, demand a downsizing of govt., no more bailouts for the banks and corporations controlling Washington, states, localities, an end to out of control dollar debasement by the U.S. Federal Reserve, cutting the welfare state too?

    Only then will true freedom return.

    For now, I am not holding my breath, but 'circumstances' may force a reset at some juncture.

  3. I'm sure the Idiocracy Tards will just love it!

  4. Call this what it is. It isn't just crony capitalism, this is fascism with a nice name.