The Trouble With Capitalism

An oft repeated warning is: The trouble with socialism is socialism.  The trouble with capitalism is capitalists.  Here WFB cites Willi Schlamm as the source.  That is, socialism does not work as we see in Venezuela, the Soviet Union, and elsewhere.  Capitalism does work but capitalist work to undermine it.

Dave Kong is president and CEO of Best Western Hotels & Resorts.  He would seem to qualify as a capitalist and his recent article shows why they are the trouble with capitalism.  The title of the piece is, “Dear U.S. Presidential Candidates, Here Is Why The Country Needs A Secretary Of Travel.”  It is on LinkedIn and it appears to be serious.  If it is a spoof it is really well done!  Here is part of his argument:

We currently have 15 separate Secretaries reporting to our President, covering everything from Agriculture to Defense to Energy and Education. But where’s travel? As it stands now, our interests are marginally served by the Department of Commerce, and we rub up against the Departments of Transportation and State, and others too. However, we have no true champion in the White House and it’s time ─ we’re a two trillion dollar economic engine. By contrast, the Department of Agriculture operates 266 subsidy programs and employs more than 91,000 people across 7,000 offices, and in total the agriculture and agriculture-related industries contributed $789 billion to the U.S. Gross Domestic Product in 2013.

Do we think that the Department of Agriculture is what we want to emulate?  It does seem clear that he wants money and favors from the government.  He needs to remember that the money and the favors come at a cost.

We might look at Uber and local governments [we know he is making a federal government argument] to see how they encourage innovation.  Austin Texas has banned Uber.  You could also look at the challenges AirB&B has had as well.  Unless you are looking for handouts or protection from innovation the government doesn’t have much to offer you.  A more interesting question is: why haven’t more governments outsourced transportation to Uber?

We all want protection.  The government will give it to us for a little of our freedom.  Capitalists are often happy to make a deal with the government and that is how we end up with crony capitalism and the related problems.

Both of the presidential candidates have crony problems but in the Wisconsin Senate race, Ron has a strong record for competition while Russ does not.

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