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Corporatism Is Not Capitalism And Capitalism Is Not Corporatism

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capitalism vs corporatism

Few people are well educated in economics and that ignorance shows in the policies and politicians the general public supports. Millions of people eat up anti-capitalist propaganda spewed out by the left without a second thought. They think that it’s capitalism’s fault for the Housing Bubble, the recession, wealth inequality, and soaring healthcare and education prices. Worst of all, these people want the government to pass laws and regulations as a solution – which in reality only makes it all much worse. This all stems from a misunderstanding of what capitalism truly is. In reality, the problems they have identified are caused by corporatism, not capitalism.

This confusion between capitalism and corporatism starts with the misconception that we have capitalism in the United States – we don’t. Capitalism would mean a deregulated economy with near perfect competition which is clearly not what exists today. Instead, it is corporatism that exists in America today and that has been the system for some time now. Corporatism is what’s to blame for all of those problems listed above – not capitalism.

Corporatism is the merger of state and corporate power with each side helping the other grow larger. Governments own, invest in, or heavily regulate every single company in this country and have enormous influence in business. Politicians and bureaucrats have their own friends and cronies in those firms as well. It’s the same for corporations as they have lobbyists in government to make sure that all those investments and regulations benefit them. Both are intertwined to form a government-corporate state that prevents the capitalism from functioning efficiently.

That marriage has grown big government and big corporations at the expense of individuals, their small businesses, and the the free market. The corporatists’ dual manipulation of the economy is what caused the Housing Bubble and subsequent recession as well as the ever growing Student Loan Bubble.

Under capitalism the regulations that caused the Housing Bubble never would have existed nor would any of the policies that hand out taxpayer dollars to corporations. The bubbles that the government creates would never come to pass.

Corporatism is even to blame for healthcare costs rising after Obamacare was passed. The insurance industry lobbyists are the ones who wrote the bill and they did so to benefit themselves. Under Obamacare everyone is forced to buy insurance and regulations ensure it will be more expensive than before. Of course, the law never even addressed any of the underlying problems with why healthcare is so expensive in the first place: government regulation.

In a capitalist system the healthcare market would be free from those burdensome regulations and government subsidy that make it overpriced. There would be thousands of healthcare companies competing across state lines offering thousands of options for everyone.

Corporatism has also created a class of rich cronies who live off of corporate welfare and government contracts. Those super rich D.C. insiders contribute greatly to the wealth inequality in this country. They’re the true fat cats living off the backs of the poor.

To fix these problems we need less government not more. Government power was what created these problems in the first place. Demanding more laws and regulations to fix these problems would be like asking an arsonist to put out a fire with more gasoline. It’s only going to get worse every time. People have to understand that the larger government grows the worse corporatism gets.

In order to dismantle corporatism we have to end the regulations that give these cronies their power and end their corporate welfare. Only in a deregulated free economy will bubbles become a thing of the past, wealth inequality lessen, and healthcare and education prices fall. That can only happen if we go back to capitalism and get away from corporatism.


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