Why Corporatism and Capitalism are Different
Recently I wrote about the odd relationship between Millenials, modern socialists, and capitalism. Despite loving all of the goods that capitalism provides, they absolutely hate capitalism. I think the reason for that is that they don’t know that corporatism and capitalism are different.
Corporatism is when the economy is controlled by large corporations. Instead of encouraging innovation, those companies collude to control the market and limit competitors. They use their size and lobbying power to prevent competition. Millennials hate that, and rightly so; it leads to higher prices and limited growth. The problem is that they wrongly associate capitalism with corporatism; they don’t understand that corporatism and capitalism are different systems.
Capitalism is very different than corporatism. In a true capitalist system, companies don’t collude or curry special favor with the government. Instead, they compete to outdo each other in terms of offering better products or lower prices (or, ideally, both). That is the type of system that Milton Friedman was defending in Capitalism and Freedom.
Unfortunately, most Millenials don’t seem to understand that distinction. They blindly associate the two and do little to try to understand the distinction between the two very different systems. Instead, they just view socialism as the solution to all their problems and disregard the fact that socialism leads to lost freedoms. They also have a very rose-colored view of how wealth redistribution works. It’s as sad as it is stupid.
And it would be utterly devastating to our republic if they were allowed to have their way on issues. Just imagine, if you will, what would happen if Democrats, who do not seem to understand that corporatism and capitalism are different, were to come into power.
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The Big Tech companies that are the enemies of freedom because of how they stifle opposition (read: “conservative”) opinions in their attempts to silence anyone whose opinions they disagree with would have a free hand to do whatever they want. They could swing elections, as Twitter is now trying to do, determine what ideas are allowed into the public square, and perhaps become even more powerful than the federal government in some circumstances.
Furthermore, because of their power and the Democrat’s refusal to punish companies that toe the party line and attack conservatives, no competitors could arise to challenge those Big Tech companies, just as we now see no real competitors to companies like Twitter, Facebook, and Google.
That is not capitalism. At all. In any way whatsoever. Corporatism and capitalism are different. Very different. Corporatism is the situation I just described, the situation that Americans of all stripes have seen during the Covid crisis. It is a situation where companies, namely large corporations with ties to the government, sink their hooks into society and use their power to solidify their market position. Corporatism and capitalism are different because while there is little competition in a corporatist economy, capitalist economies are quite competitive. With capitalism there is constant innovation: once might companies fall, as GE recently has, and smaller, much more innovative companies rise up in their place. That would never happen with corporatism.
There are many more examples that show that corporatism and capitalism are different. But, I think, the competition one and the relationship with the government one are the main ones. Competition is the difference between prosperity and stagnation. The power aspect is the difference between the free market and corruption. Choose competition and the free market. Choose capitalism.
Always remember that corporatism and capitalism are different. Recognizing that distinction is crucial to the survival of capitalism. Once it is recognized, we can start to defend capitalism in America and root out the corporatist elements of our current economic system. Once we do that, socialists will have nothing to attack because capitalism will be making their lives better without seeming like crony capitalism.
By: Gen Z Conservative
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