Socialism: System where politicians become the wealthiest members of society
Capitalism: System where financiers become the most politically powerful members of societyFrom Dizzynomics:
The tendency towards cartelisation
When capitalism isn’t frequently saved from itself by socialism, it inevitably leads to the ‘cartel-isation’ and monopolisation of everything.
And once a monopoly is established nothing stops it from becoming as tyrannical as any “oppressive” government.
In short, both socialism and capitalism have the capacity to lead to tyranny. (A point well expressed by George Orwell’s Animal Farm).
The whole thing is a loop.
And it all comes down to the fact that there is no such thing as perfect competition in a world where information asymmetries can be purposefully created, where entry costs can be made prohibitive and where incumbents can manipulate the market clearing price thanks to inventories or excess capacity.
All wonderfully summarised by Lord Keynes on his Social Democracy blog on Friday:...MUCH MORE
Secondly, the glaring problem with the Austrian view of competition – with its emphasis on opposing alleged government obstacles to competition – is that mark-up pricing industries themselves, not only through the mark-up price but also through effective use of excess capacity and inventories, create severe market barriers to entry and destroys the Austrian view of market “freedom of entry.”
For, if a mark-up price remains generally fixed in relation to demand changes, and does not even rise when demand rises, how can there even exist any effective market signals to businesses to enter a new market with high prices when those high prices do not even appear in the first place? The answer is obviously that these “market signals” do not appear, and that the Austrian theory has already collapsed because most markets (which are mark-up/administered pricing markets) do not set prices in the way required by the theory....