Does liberal capitalism have enough vital energy to sustain itself?
A thing I like about Christianity is that some Christians really believe what they say. Some Christians, across history, and today, would die for their beliefs.
I am less sure of liberal capitalists. It seems that big companies have not really been willing to spend very much to maintain the system that gives them so much wealth. Where have we seen companies attempt to push back, even despite their huge wealth? Against Tariffs? Against Trump bullying law firms? Against decisions that happen on the basis of one’s personal interactions with Trump?
I wonder if this system has enough vital energy to sustain itself if with trillions in capital so few are willing to take a stand.
The relationship of “Christianity → Christians” is entirely different from the relationship of “Liberal capitalism → Big companies” or even “Liberal capitalism → Capitalists (meaning rich people who own a lot of capital)”.
The first is the connection between an idea and people who (claim to) share that idea. The second one is an idea and entities or people who visibly benefit from the system (*supposedly) based on that idea. However, even if they benefit from it there is no strict necessity for them to share the idea itself. In fact, as their wealth is generally concentrated in (a) particular sector(s) they are better off lobbying for special measures (e.g. subsidies, tariffs, preventing entry of competitors) that benefit their market position. This is actually what we see, e.g. Nvidia lobbying to be able to export their chips to China, Apple getting tarriff exemptions and so on.
The primary economic idea of liberal capitalism is that competition creates the most economic value, and thus elements decreasing that competition should be as few as possible, which is often the opposite of what a particular capitalist or corporation would want for itself. This is also what we see if we look at champions of the idea, who tend to be academics and intellectuals historically, rather than capitalists. In addition, if a capitalist or corporation would fight openly against all tariffs, being successful would benefit everyone equally, but failing and becoming the target of the vindictive administration would only hurt them in particular.
So we should expect academics and other public intellectuals to be the champions of liberalism, as it is very difficult to create legislation where they are the primary focus of benefits or harms without a bunch of unrelated people being equally affected.
*”Supposedly” as they themselves might not share the idea that their success is due to the system but may think it comes from some other factor (e.g. their own skills) independent from it
One naive quick response: it’s a coordination problem. Sticking your head above the parapet alone gets you shot. And you only collect a very small fraction of the public good. (Also, publicly genuflecting instead may get you favours.)
Meanwhile, quite rightly, coordination between firms and representatives of firms is seen as a big no-no in most sectors in a good liberal democracy, and this is enforced somewhat. It’d be market-distorting!
One of the main reasons to have a government at all is to do the coordinating in such cases, because markets can’t (be trusted to). Difficult when the government itself is the (ex hypothesi) problem.
That’s where checks and balances, and ideally ‘the wisdom of the people’ is meant to step in. (How is that going?)
Does liberal capitalism have enough vital energy to sustain itself?
A thing I like about Christianity is that some Christians really believe what they say. Some Christians, across history, and today, would die for their beliefs.
I am less sure of liberal capitalists. It seems that big companies have not really been willing to spend very much to maintain the system that gives them so much wealth. Where have we seen companies attempt to push back, even despite their huge wealth? Against Tariffs? Against Trump bullying law firms? Against decisions that happen on the basis of one’s personal interactions with Trump?
I wonder if this system has enough vital energy to sustain itself if with trillions in capital so few are willing to take a stand.
The relationship of “Christianity → Christians” is entirely different from the relationship of “Liberal capitalism → Big companies” or even “Liberal capitalism → Capitalists (meaning rich people who own a lot of capital)”.
The first is the connection between an idea and people who (claim to) share that idea. The second one is an idea and entities or people who visibly benefit from the system (*supposedly) based on that idea. However, even if they benefit from it there is no strict necessity for them to share the idea itself. In fact, as their wealth is generally concentrated in (a) particular sector(s) they are better off lobbying for special measures (e.g. subsidies, tariffs, preventing entry of competitors) that benefit their market position. This is actually what we see, e.g. Nvidia lobbying to be able to export their chips to China, Apple getting tarriff exemptions and so on.
The primary economic idea of liberal capitalism is that competition creates the most economic value, and thus elements decreasing that competition should be as few as possible, which is often the opposite of what a particular capitalist or corporation would want for itself. This is also what we see if we look at champions of the idea, who tend to be academics and intellectuals historically, rather than capitalists. In addition, if a capitalist or corporation would fight openly against all tariffs, being successful would benefit everyone equally, but failing and becoming the target of the vindictive administration would only hurt them in particular.
So we should expect academics and other public intellectuals to be the champions of liberalism, as it is very difficult to create legislation where they are the primary focus of benefits or harms without a bunch of unrelated people being equally affected.
*”Supposedly” as they themselves might not share the idea that their success is due to the system but may think it comes from some other factor (e.g. their own skills) independent from it
Sure but do you think the adherents of capitalism who are the correct relationship are better?
Yes, I think they are. For example:
Senator Rand Paul and representative Don Bacon directly opposed Trump on tariffs even though both being republicans
The Economist magazine did the same and even more generally (being openly classical liberal)
Bloggers/intellectuals such as Noah Smith, Matt Yglesias, Richard Hanania and Nassim Taleb are openly against these again
The econ department of George Mason university has been consistently anti-tariff before and after Trump
One naive quick response: it’s a coordination problem. Sticking your head above the parapet alone gets you shot. And you only collect a very small fraction of the public good. (Also, publicly genuflecting instead may get you favours.)
Meanwhile, quite rightly, coordination between firms and representatives of firms is seen as a big no-no in most sectors in a good liberal democracy, and this is enforced somewhat. It’d be market-distorting!
One of the main reasons to have a government at all is to do the coordinating in such cases, because markets can’t (be trusted to). Difficult when the government itself is the (ex hypothesi) problem.
That’s where checks and balances, and ideally ‘the wisdom of the people’ is meant to step in. (How is that going?)