This is not the fault of Capitalism alone. In a healthy democracy, the people vote in the Government, who can impose fines, tariffs, penalties and such on companies and business practices that the people (via the people they elect) deem to be working against them. Sadly, as you point out, this creates a direct incentive to lobby or otherwise attempt to control Government by large and powerful companies. The only way to prevent this is to impose fines, tariffs and penalties on businesses undertaking this behaviour (effectively disincentivising it financially), since it fundamentally unbalances the power dynamic between Government and business. However if you've got nobody left to elect who will fight that corner for you, you're kinda stuck.
Pure free market Capitalism is playing a game of Monopoly where after each time anyone passes go, the player with the most money gets to create a new rule. Guess what? The game is gonna get pretty skewed, pretty darn fast.
Consolidated money is power. The only way that capitalism can work long term is if there are rules actively countering/fighting using that power to change the rules.
Money is power and capitalism consolidates money. So capitalism consolidates power. Consolidated power can change the rules in its favor to consolidate more.
The only options are prevent entities from consolidating money (which means you're risking losing capitalism), Or prevent entities from using money and power to change the rules (which, if you think of all the ways gratuitous money could be used to influence, is the social equivalent of solving the halting problem).
> Pure free market Capitalism is playing a game of Monopoly where after each time anyone passes go, the player with the most money gets to create a new rule. Guess what? The game is gonna get pretty skewed, pretty darn fast.
I think you've misunderstood the free in free market. If anyone is allowed to make rules like that, it is not a free market, not superlatively, not normally, not even slightly.
The problem here is that you have a government apparatus which has outgrown its mandate in ways that were not adequately accounted for, which makes it ripe for the picking.
I'm not sure why you're being downvoted, you actually make a great point. If there exists a Govt. which has the power to impose certain rules which change the markets, its by definition not "free". If there was no Govt. to create and enforce these rules, corporations could not influence said Govt. to create unfair rules (since it does not exist).
But I don't agree with your conclusion. If there were truly no Govt. creating and enforcing rules, there would be Guilds/Cartels that would (e.g. see how criminal gangs behave and operate). Which is why we do need an overarching authority that has the power to create, change and enforce rules that make the market less free, but potentially more beneficial to more rather than a few.
The problem isn't that the government apparatus has outgrown its mandate. Its that its become more easily influenced by money. Reduce that influence and you will have a Govt. that works for the general interests of its people.
> Reduce that influence and you will have a Govt. that works for the general interests of its people.
I recently found out about an old solution that would achieve that goal: Sortition. Instead of having elections every few years, we could randomly pick a hundred people from the population and task them with creating a law. After an initial preparation, they would deliberate like a jury and their decisions would be written as law. After a single task, they should disband and new groups should be selected for new tasks. With a country of hundreds of millions of people, it would be a light burden on the population to serve from time to time.
The benefits are: 1. by random selection, every social category is represented equally, 2. there is no need to have elections, so no lobbying and money in politics, and 3. because the legislative group only works on a single task, once, they can't grasp power, like politicians do.
I believe a group of 100 random people would make more heartfelt and wise decisions than a parliament full of professional liars. Regular population is more in touch with reality. Regular population needs to be heard directly because politics sucks, and this is a way to do it.
>1. by random selection, every social category is represented equally
No, every social category would be represented similar to their ratio in the rest of society. This wouldn't line up well with many groups that want much stronger support for minorities.
Take Native American concerns for example. With just over 1% of the population being Native American they will probably only end up with a few representatives out of the 100. The remaining ~98 people are going to be spending a bunch of time concerned about their own problems and won't put effort into making sure Native Americans get equitable treatment due to past issues.
In other words, by cutting out the ability to lobby for rich people to help themselves, you also cut out the ability to lobby for legitimate issues as well. Lobbying has (rightfully) been seen as a terrible thing, but it does have the legitimate purpose of bringing issues to a representative's attention that he/she would never even think about otherwise.
There's also the point that 100 random people won't have any background on the topic in question. Who's going to help them understand it? Most likely the same vested interests that today lobby the government.
It's a fun solution to consider, but I'm also concerned in that lobbying for this solution already exists - mass marketing, which has already been mastered.
My parents had me at 17 and had no idea how to raise kids. They see a commercial of kids eating cereal and poptarts, so they feed me cereal and poptarts under the false assumption that that is a healthy meal, and that plus other factors led to me growing up fat and unhealthy.
Basically, if lobbying is a problem, disinformation through mass marketing is a MAJOR problem.
> The problem isn't that the government apparatus has outgrown its mandate. Its that its become more easily influenced by money. Reduce that influence and you will have a Govt. that works for the general interests of its people.
I think it's simpler than that: you need to have one entity which could ever possibly have the mandate, and then bind them eternally never to use it. The supreme court is supreme, but it also has rules. When the supreme court plays by its rules, it does not create a power vacuum for violations, it creates an assurance against them.
I think their point is that in a free market, the vacuum of power leads to organizations (with the means to) filling that vacuum and establishing rules that rationally favor themselves.
Which is why you have to constitute a power structure which is actively prohibited from the unwanted behaviours, while filling the void of an organization with said behaviours. This is partially accomplished by the U.S. constitution, but there are some holes either in the formulation or in the interpretation.
> each time anyone passes go, the player with the most money gets to create a new rule. Guess what? The game is gonna get pretty skewed, pretty darn fast.
We call that crony capitalism and it is very much the opposite of a free market. I do agree with you however that we don't have effective barriers between money and government (or other forms of) power and therefore the stable state for liberal democracies with capitalist markets is crony capitalism and regulatory capture.
>>Consolidated money is power. The only way that capitalism can work long term is if there are rules actively countering/fighting using that power to change the rules.
Yes. This is why I'm in favor of term limits, as well as a rule that outlaws "revolving doors"[1].
That sounds nice, but why don't proponents of term limits ever offer evidence for their claim? We already have term limits in California. The result? Politicians spend a lot of their time in office figuring out how to leapfrog up the political ladder - usually city/county school board, to supervisor, to state assembly, to state senate, to Congress. They are never in one place long enough to build stable networks of influence (superficially a good thing) but that just means they're easier for lobbyists to manipulate (definitely a bad thing).
I have an open mind on term limits, but since they exist in multiple jurisdictions why don't you show, with data, that they are leading to qualitatively different outcomes where they have been implemented?
Sad but true. In California the legislature is just a tool for the bureaucratic state to pander To itself. Legislators who fulfill the wishes of the state bureaucracy get favorable treatment on the career ladder. I often suggest we should have term limits on laws, not politicians. An absolute sunset on every law and regulation with up/down votes only, no debate, will do a lot to show whether elected public servants are on the job and who they are working for.
Elsewhere in this thread, the concept of lobbying is being questioned as well. Find a way to prevent this and that removes a huge chunk of the problem, in my mind. Not that I can figure out how to prevent it.
Stopping corporate donations to political campaigns would be another thing.
This is why I favor making our representatives an actual representative population using random selection.
Our current selection process overwhelmingly favors white male lawyers who are good at talking corporations into giving them money for their election campaigns.
It's a noble idea that government should exist to protect consumers from corporations. But it will never work unless there is some authority that could protect the governments from the corporations.
> The only way to prevent this is to impose fines, tariffs and penalties on businesses undertaking this behaviour (effectively disincentivising it financially), since it fundamentally unbalances the power dynamic between Government and business.
That is neither the only way, nor a particularly effective way. I think we should go back to having representatives who represent a reasonable number of people (~100-500), and who are not full time politicians. Then regulatory capture would be much more expensive and difficult.
>The only way to prevent this is to impose fines, tariffs and penalties
The ONLY solution to an abuse of power by government is more government exercise of power? How about limiting the powers of government to remove the "direct incentive to lobby"?
So they only players left are the large corporations? I don't think you can have thought this through, so I'll take you through it:
Nation states are social constructs, whereby some people collectively lay claim to some land, and have their claim recognised by all the other states. In order to be able to do this, a key thing you must be able to do is defend your patch of land. This requires some sort of military, who will need paying. You can further entrench your position and standing amongst the group of nation states by doing trade with them. The greater your economic output, the more likely the are to treat you well, be your ally, and do trade with you in return.
However, keeping a military, and generating power and providing infrastructure to enable economic activity (roads, ports, airports, healthcare(?), fire, police etc.) costs money, and to raise this money, the state charges people tax. All states raise money via taxes, and it's the predominant way they do raise money. So there's the question, who do you tax, and how much? Do you tax everyone the same (a poll tax), or do you tax people who have less money less? Or people who have more money less? The power to decide who pays is one of the key roles of Government, and one of the main expressions of Government power.
I would be interested to hear how you would see a limitation of the powers of Government, by which I assume you mean limiting their ability to set tax law would work.
Thanks for "taking me through that." Never thought about that before now.
Let me take you through your scenario.. you give government increasing power to censure corporations it doesn't like, effectively making it kingmaker of the economy. You end up with something like China where every company is state-sanctioned, and there is widespread graft and corruption.
My point is not about increasing or decreasing the power of Government (in a democracy, Government power cannot really be 'increased' or 'decreased', but it can be concentrated or spread out though). The Chinese Government is not a democracy, so not really relevant to this discussion.
I think most Irish people are aware that the primary appeal of the country to multinationals is as a tax-efficient English-speaking common law bridge into the EU, in approximately that order. The specific amounts flowing across the bridge, no, I don't think people are generally aware of the numbers.
But because it is a bridge, we Irish don't really have a strong claim on that money: the revenue was generated somewhere else, and it's going somewhere else, it's just resting in Ireland for a while.
There's a bunch of hypocritical talk from other EU countries criticising Irish tax rates, all the while having lots of carveouts and tax breaks of their own that reduce supposedly high rates to nearly nothing in various deals. For example, France has an effective rate of about 8% on profits for companies in the the CAC40. Luxembourg is much worse, it's practically a tax haven that avoids being listed as such somehow, probably down to location.
In principle I'm in favour of something like the common consolidated corporate tax base. The problem with taxing multinationals comes down to game theory: if there's a common market between countries, there's a race to the bottom in tax rates for hosting multinationals. So there needs to be a pact.
It's about 3,500 pages long, written in esoteric accountant speak. Considering that in the USA "32 million adults in the U.S. can’t read. That’s 14 percent of the population. 21 percent of adults in the U.S. read below a 5th grade level, and 19 percent of high school graduates can’t read," I think it's an unfair burden to place on a population.
I do agree that the tax code should be simplified, I would advocate for a flat tax with a high personal deduction and few other deductions. The voters seem to disagree with me and prefer the complicated system currently in place.
It would seem to me that with compulsory education everyone was afforded an opportunity to learn to read and write, if they choose ignorance I would not say it's an unfair burden. I managed to learn to read and write before my compulsory education began. Using this rare and mysterious ability I incurred about a dollar fifty in late fees at the library and became very well educated. I do find most people to be quite ignorant, but I must respect their choice to remain ignorant while surrounded by knowledge.
It's certainly an unfair burden if they were never afforded an opportunity to learn, however, in the United States I think you'd have to agree that if you don't know how to read and write it's a matter of personal choice rather than lack of opportunity.
I don't personally know the tax code as well as I'd like as it's not my area of expertise but I do consult with those much more well versed in it.
>I managed to learn to read and write before my compulsory education began.
>Using this rare and mysterious ability I incurred about a dollar fifty in late fees at the library and became very well educated.
>with compulsory education everyone was afforded an opportunity to learn to read and write,
I have enough respect for your intelligence that to expect if you're here, you're aware of the vast educational chasms between the privileged and unprivileged. Basically, I'm confident you're aware that your experience is not necessarily the norm for every American. With that in mind, I'm curious why you still maintain such high expectations for tax code knowledge, especially considering all the evidence to the contrary of American financial literacy.
> I think it's an unfair burden to place on a population.
If the population is unable to read the code that is used to relieve them of wealth, something is off--in both their own ignorance and in their inability to appoint people they trust to handle that for them.
That seems unsupported by the article, in 2015 Ireland changed its laws, Apple consulted a law firm on advice on how to proceed and sought assurances from the govts involved that it's understanding of the law was correct.
Of course there is, this is what tax evasion is about. There's a decent case to be made that the Apple and Ireland were wrong in Apple following Ireland's tax code, we'll see how the case turns out on appeal.
I would say that when the sovereign is in agreement the payment of taxes that it can't be construed as evasion, however, I'm not super well versed on how much of a sovereign Ireland really is given it's membership in the EU. Perhaps the EU is the real sovereign in this case and Apple has erred in consulting with the Irish government who lacks authority to set tax policy in its territory.
