There's No Such Thing As Crony Capitalism

While there are a few avowed full-blown socialists who want the government to control pretty much everything, with the only freedom being the right to kill your unborn child, most anti-capitalists are more insidious. While the average American is no fan of capitalism, they do not attack capitalism honestly, but pretend to be for capitalism and only against what they refer to as "crony capitalism." Crony capitalism is where profits are privatized and losses are socialized. Does such cronyism exist? Sure, but why call it capitalism? If crony "capitalism" is where certain corporations succeed as a result of subsidies, bailouts, and regulatory capture, why not refer to such STATE interventions as crony socialism? If the only way a business can succeed is with the help of the state, what is capitalistic about this?

Capitalism means private ownership over the means of production. Socialism is government ownership over the means of production. Syndicalism is worker ownership over the means of production. The means of production is the resource needed to produce the good, but not the good itself. There are essentially two types of goods: 1) Consumption goods, where the good is consumed and not meant to be sold to anyone for a profit or used for investment, but simply to be destroyed (aka consumed) by the owner, and 2) Capital goods which are goods which are not to be consumed but used as a means to an end for further profit. Savings, investment, labor, and machinery are all examples of capital goods. Money is not a good at all, but simply a medium of exchange used to reduce transaction costs and solve the double coincidence of wants problem found in barter. Something is a good if increasing the amount increases people's living standards. Something is a bad if increasing it decreases people's living standards. And something is neither a good or a bad if increasing it has no effect on people's living standards. Increasing the amount of consumption goods in existence makes people better off by having more goods available to consume. Increasing the amount of capital goods in existence makes people better off by having more labor or capital in which to invest, save, and produce more consumption goods. Increasing the amount of money in existence does not make people better off, but only reduces money's purchasing power. Money is a medium of exchange. Money is the thing used to get a good, but is not the good itself. Think of money like a ticket needed to give to the dry-cleaner before getting your clothes, or the ticket needed to be called in order to get in line at the bakery. Increasing the number of such tickets does not increase the number of clothes you get or the number of cakes and bread you consume. Increasing such tickets makes no one better off. The amount of money in existence is immaterial. There is no such thing as a shortage of money or running out of money. Such statements are nonsensical. If the amount of money in existence increases then more money is needed to buy the same product as before (the purchasing power decreases), and if the amount of money in existence decreases then less money is needed to buy the same product as before (the purchasing power increases). Therefore, the idea that adding money increases wealth is nonsensical. Increasing the amount of money does not make people richer and decreasing the amount of money does not make people poorer. The only effect of an increase in the amount of money has is changing one's purchasing power. It doesn't increase the amount of goods or services in existence. It's more goods and services that people value that makes a society richer, not artificially increasing the medium needed to get the goods.

 Anyway, the point of the above is to explain that the means of production are essentially both the consumption and capital (though mainly capital) goods. Labor is one such capital good. Therefore private ownership of the means of production includes owning yourself and what you produce. Any rivalrous good you produce (except for another person) you own. Therefore private ownership of the means of production means that an individual owns himself and get sell his services (aka labor) to others. His pay for selling his labor is known as wages. The benefit the employer gets from selling the goods the labor produces are known as profit. Therefore private ownership means that individuals own themselves and their property, as opposed to some abstract collective being able to own the means of production. The state owning the means of production involves owning another person's labor and the goods and services that labor produces (against the will of the actual, concrete, individual owner). Therefore, when the government nationalizes a factory that is claiming ownership over the means of production. When the government drafts people into an army that is claiming ownership over the means of production. When the government deprives someone of a portion of their wages or profit that is claiming ownership over the means of production. In fact, any violation over another person and their property is anti-capitalistic and socialistic.

A capitalist says that only the individual thinks, acts, and has rights. An individual is a concrete flesh and blood person one can point to. Capitalism is where an individual owns himself and other people around him respect such a right and any violations against a person or property, the owner has a right to seek out reparations against any individuals which destroy, maim, or use his property (including his body) without his consent. Socialism on the other hand says that only the group has rights. Abstractions such as "society," "community," "government," or "the people" take precedence over the rights of concrete flesh and blood individuals. Socialists convince useful idiots to support such violence by talking about the common (or greater) good, a meaningless abstraction that is never clearly defined. The common good is just another way of saying, "My wants take precedence over your rights. If I feel I need something more than you, I have a right to seize it from you, especially when you have more than I do."

When the government claims to own you or your property they are engaging in socialism by saying that the individual belongs to the group and not himself. When the government taxes individuals they are saying that part of your income belongs to other people. When the government provides a subsidy to certain businesses that means taxing some people are "redistributing" it to another person (the business). When the government bailouts a firm they are doing the same thing by stealing from one group of people and giving that money to another group. All such market interventions violate the property rights of some by giving the property to another group of people to whom it does not belong. Therefore, when the collective (the state, government, society, or any other abstraction) steals from one person to give to their cronies they are engaging in a form of socialism by saying the individual does not own the means of production but it belongs to society and such intervention in the market is needed for the common good. Therefore, since such crony subsidies, bailouts, regulatory capture, and any other form of rent-seeking is a result of state action and is not part of the market, to call this crony capitalism is intellectually dishonest. It would be akin to calling gang rape, crony lovemaking. 

In short, since government bailouts, subsidies, regulations, and "the rich" buying up politicians" are all example of non-market government interference, and not part of capitalism, the only honest term to refer to such intrusions is to call them by their proper name: crony socialism.