Capitalism and Free Markets

The distinction that Republicans don't seem to understand is that free markets are not the same thing as unregulated capitalism. Unregulated capitalism often tends to stifle competition. It is usually in the interest of shareholders of a large corporation to have fewer competitors and for them to offer a fewer number of products that return high profit margins. The reason is that as a company gets larger, it gets more and more expensive to innovate so it is more cost effective to get rid of competitors and discourage competition than to innovate. It is usually in the interest of shareholders of a large corporation to get rid of products that have a low profit margin (even if they are the bestor the ones that consumers like the best). Almost every time that a large company buys a small company they do it to get rid of competition not to benefit their customers. Soon afterwards, the innovative product that caused the large company to purchase the small company is shut down. I can't tell you how many great laser gyros that I used to buy that have been removed from the market by Northrup Grummond and Lockheed. The consumer almost always ends up with less choice and inferior products that cost more after a large company buys another company. A few years ago there was a great little company that made fantastic small drone airplanes that were great to use in geophysical exploration. They were cheap, simple, and generally awesome. Guess what? You can't buy them anymore after they were purchased by a larger company.

Capitalism has a very narrow feedback mechanism, i.e. do anything to maximize shareholder value. Companies will even break the law if it is cheaper to pay the fines. The beauty is that companies are not really people and can't go to jail. Actually corporations now own our jails and even our supreme court.

Here are a few things that are often looked at in a negative way by a board of directors of a large corporation when trying to increase shareholder value: number of employees, employee salary, employee benefits, taking care of employees who have retired, been laid off, or who have become disabled, reducing pollution, increasing qualtiy of products without any increase in market price, new products that have lower profit margin and are competitive with high profit margin products (inside or outside the corporation) even if the new products are better for the consumer, research and development that does not lead to quick returns.

We don't even have the correct language to discuss the reality of "free markets" and Capitalism... it has been part of the general dumbing down of America (brought to you by the Heritage Foundation) that people now think they are the same thing.

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