When I was growing up in the 1970s, my band director told my class a story about touring a margarine factory. He saw the equipment churning our the stuff, and found out the product was sold under about 20 different labels at different prices. The advice: “buy the cheapest stuff you can, because it’s all the same.”
Conspiracies like this give capitalism a bad name. I wonder how often the rhetoric of free markets are invoked to defend the real practice of “crony capitalism”, where management and government conspire to run the market. In this model, laws can be vague, and enforced only to drive out new competitors: only those legally approved to do business can. Prices are generally the same no matter what the brand, and the product is generally another package for the same margarine. The public has to buy what’s being sold, because either it’s a basic need, or it’s been created for the marketers to supply, and alternatives to the product that would kill a market are blocked by all means possible. Areas of control are also laid out, and various subtle ways to enforce them, or at least, limit competition within boundaries. Laws are written to benefit the marketers, limiting liability and increasing the marketer’s share. The industries resist oversight, and as much as they can, public opinion. Another word for this kind of operation might be Monopoly.
If this sounds familiar, it should. I’m not going to mark every industry in America that fits this description, for it would be too easy. They come from both ends of the political spectrum: in many ways, Hollywood and the entertainment industry is just as much a monopoly as the oil industry. When there is a real dispute among crony capitalists, it’s the consumers that pay the price, much like the grass suffers when elephants fight. Crony capitalists don’t answer to the market, or anything else, only to themselves. Since crony capitalists really can’t be saints (by definition), it’s hard to grasp how satisfying them serves any common good.
Free market capitalism, provided it is truly free, does everything it promises, to an extent. It’s not a guide for morality, because people make choices that are bad for them, and suppliers tend to give people what they want no matter what it is rather than what they need. The fact smoking causes cancer hasn’t led any tobacco producer (that I know of) to publicly leave the business in horror. It’s also not good for essentials, public services. In late 19th Century London, the growth of the cholera epidemic could be traced to the different sources of water, supplied by different companies who took their drinking water from different places in the Thames. In ancient Rome, homeowners had to negotiate with fire departments about putting out their blazing property while the fire was burning. What’s popular isn’t necessarily good: if popularity is the infallible indicator of quality, then the best place for nutrition is McDonald’s.
The biggest problem with absolutely free market capitalism, is that an near infinity of choices, without any means to evaluate the merits of any choice, isn’t really freedom, it’s a gamble. How can you know the quality of any professional or service from the phone book, or Internet ads? With no guarantee of the product and no information, we have to choose blindly time and time again. There’s also the drive to sign away freedom: buy one service and you’re stuck with them for everything, such as cell phone plans, and they want to lump as much as possible into the irrevocable deal. Different people want to buy a piece of your soul.
The other side exists in our culture as well. Choosing between a variety of competitors who provide pretty much the same thing isn’t really a choice, other than who gets to make money off your choice (in which case you’re really judging a beauty pageant). It also means you’re not encouraged to produce something yourself that someone else wants to sell you. This could be called Bait and Switch: we’re offered the vision of a free choice, but we’re really getting the same thing for different prices, like the tub margarine of my youth.
The irony of Crony Capitalism is one of the patron saints they invoke, Ayn Rand, would call them Looters. In Atlas Shrugged, these are the businessmen who manipulate the government to provide them business, while they themselves stifle every new initiative (and product) they can’t share in and every new competitor that’s not part of the conspiracy. Even when seen through the eyes of someone I nominated as the AntiChrist, Crony Capitalists are hypocrites.
Figuring out what need’s best served by which model, market or public service, is an ongoing discussion. The hopeful thing about Crony Capitalism is that no such system is perfect, foolproof, or lasts forever. At one time, the railroads conspired to run the country, determine where the wealth went through access to rail lines. Their rule was never complete and when other means of transport cut into their shares, their power diminished.
I know, some of you will say this is an argument against socialism, and you wouldn’t be very wrong. Tell me how many American markets are truly free, how many only present an illusion of free choice, and how many essentially regulate themselves for their own benefit. Just because a species of socialism is able to mask itself with the rhetoric of free market capitalism, and share wealth across a particular class arbitrarily without merit, doesn’t mean it’s good for everyone. In some ways, private corporate attitude today isn’t that much different from Soviet state corporations, only dressed in different clothing.
You may wonder where religion fits in all of this. Crony Capitalism is dehumanizing, setting up an elite that treats everyone else as chattel. Pope Francis has called reducing human beings to numbers, and to units who primarily consume goods, evil. Christ is about restoring humanity for all equally. That doesn’t mean we should become Christian Socialists, but we should give up the idolatry of money.