Monday, January 24, 2011

Monopoly!

Economist:

The elite are most likely to do harm when they rely on the coercive power of the state: for example, when they persuade it to grant them special favours. In autocratic countries such as China and Russia the most influential people devote a disproportionate amount of energy to such rent-seeking. In liberal democracies ordinary folk are better defended. Elections force politicians to take the public’s wishes into account every few years. Competitive markets force business leaders to heed their customers’ demands all the time. And the law applies to rich and poor alike, even if the rich can afford better lawyers.

Here The Economist holds liberal democracy in contrast to "autocratic countries such as China and Russia," where elites "devote a disproportionate amount of energy" to furthering their interests through "the coercive power of the state."

The line being drawn, in Edward Thompson's words, is not between "the monopolists and the people," but instead between monopolists of two different stripes: Governments that enjoy a monopoly on everything, including commerce, on one hand; and commercial interests that enjoy a monopoly on everything, including government, on the other. Both varieties are happy to reside within the political and economic continuum known as "state capitalism."

As a publication, The Economist takes a principled stand against one while excusing the other. We see how persuasive this can be when discussion is restricted to the first model; I wouldn't want to be writing this blog in Russia or China, in other words.

On the other hand, monopolies which arise out of commercial enterprise, and which also rely, ipso facto, on "the coercive power of the state" bring with them their own customary brand of harm to "ordinary folk." If our champions of "market competition" are more comfortable with these outcomes, it is no doubt because a more "proportionate" amount of energy has been spent designing them in the interest of their designers!

4 comments:

Justin said...

Almost every sentence in that editorial could inspire a separate post!
In liberal democracies ordinary folk are better defended.
The hardest to discuss, most discussions about this subject reduce/ignore each nations historical context and place undue blame or credit on their current political climate. Take the worst or most obvious case, Soviet Russia, an agrarian country that industrialized rapidly after suffering a political revolution and series of invasions, the worst being Nazi Germany, that made the American Civil War look like a minor skirmish.

Elections force politicians to take the public’s wishes into account every few years.
No, they don't. Arguing from reality this is obvious, arguing from ideology, not so obvious.

Competitive markets force business leaders to heed their customers’ demands all the time.
Business propaganda and horribly simplistic/reductive.

My favorite in unattributed Orwellian double speak,
And the law applies to rich and poor alike, even if the rich can afford better lawyers.Yes, of course, all people are equal, but some are more equal than others.

Brian M said...

Is it mere propaganda, or do editorial pontificators really believe the piffle they rewrite? The self congratulatory tone is what gets me.

A Chinese editorialist, writing from a country with a mountain of amassed foreign reserves and 6% per annum economic growth, could as easily write a post skewering western perceptions. (Not that their economic model is perect or sustainable or just, either...but)

Salty said...

"Elections force politicians to take the public’s wishes into account every few years."

Actually, even at face value, that's still a hilarious line. Every few years, as opposed to, you know, all the time.

Charles F. Oxtrot said...

If our champions of "market competition" are more comfortable with these outcomes, it is no doubt because a more "proportionate" amount of energy has been spent designing them in the interest of their designers!

Yes indeed.

Because the designers reap an unequal unearned profit, and care not one whit for anyone or anything but their own profit. Paying attention to deeds and not words would suggest that they prefer when the profit is disproportionate and the victims of the unequal "profits" suffer greatly.

Great point on the cramping of the discssion by The Economist, how one can seem detached and critical of one aspect of capitalism, while still being a strong, staunch cheerleader for capitalism.

That's essentially the tack taken by the good ship Democrat in America.