Tag Archives: cartels

Monopolies and Cartels Are “Communism for the Rich”, by Charles Hugh Smith

Posted on December 13, 2022 | Leave a comment

It’s almost impossible for businesses to maintain monopolies or cartels without the helping hand of government. From Charles Hugh Smith at oftwominds.com:

What’s unfettered in America is “Communism for the Rich” and the normalization of corruption that results from the auctioning of political power to protect monopolies and cartels.

The irony of constantly being accused of being a communist is rather rich. When I point out that “free market capitalism” in America is neither a real market nor real capitalism, those who equate any criticism of “capitalism” as proof of communist leanings are triggered.

Noting that Marx got monopoly capitalism and alienation right triggers another group who equate any favorable mention of Marx as proof of communist leanings.

There are two ironies in these accusations of being a communist. One is that I’ve spent 17 years tirelessly critiquing centralized wealth and power–the acme of communism–as the source of our moral, social and economic decay.

The other irony is that Communism is absolutely thriving in America in broad daylight: the monopolies, quasi-monopolies and cartels that dominate the American economy and governance are Communism for the Rich.

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The Benefits of a Profoundly Shattering Recession, by Charles Hugh Smith

Posted on August 26, 2019 | Leave a comment

Sometimes you have to take a system down completely to have any hope of coming up with anything better. From Charles Hugh Smith at oftwominds.com:

Does anyone really think The Everything Bubble can just keep inflating forever?

What do I mean by a profoundly shattering recession? I mean, a systemic, crushing recession that can’t be reversed with central bank magic, a recession that only deepens with time. The last real recession was roughly two generations ago in 1981; younger generations have no experience of a profound recession, and perhaps older folks have forgotten the shock, angst and bitterness.

A profoundly shattering recession leaves tremendous damage and pain in its wake. Millions of people who reckoned their position was secure get laid off, businesses that looked solid melt into air, large corporations flip from hiring thousands to firing thousands, and everyone on the edge of insolvency gets a hard push over the cliff.

Profoundly shattering recessions feed on themselves in a self-reinforcing dynamic: the first domino could be a supply-shock, or a decline in demand due to credit exhaustion. Since businesses have cut everything to the bone in the past decade, there are no buffers left: layoffs begin immediately, and those layoffs further reduce demand as households have to tighten their belts to survive as even those who escape the first round of layoffs find bonuses and overtime have been slashed.

Since the problem isn’t high interest rates, central banks reducing rates or pushing them into negative territory only reveals their impotence. If negative interest rates boosted the real economy, Europe and Japan would be experiencing rapid expansion instead of stagnation.

Layoffs, the failure of central banks and soaring fiscal deficits trigger a drop in consumer and investor sentiment which feeds back into declining sales and profits, which then trigger more layoffs as businesses must cut expenses as revenues crater.

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Posted in Banking, Business, Collapse, Debt, Economy, Government

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Those Systems That Aren’t Busy Being Born Are Busy Dying, by Charles Hugh Smith

Posted on February 27, 2017 | Leave a comment

Mixed economies stagnate and deteriorate. From Charles Hugh Smith at oftwominds.com:

What we have is a bunch of sclerotic, dying institutions and systems resisting anything and everything that threatens to disrupt the status quo.

One way to understand the rising sense of disintegration and discord around the globe is to realize that those systems that aren’t busy being born are busy dying–and virtually none of our primary systems are busy being born.

The line is from Bob Dylan’s song It’s Alright, Ma (I’m Only Bleeding): “he not busy being born is busy dying.”

What does busy being born mean? For both individuals and systems, it means adapting by advancing understanding, flexibility and capabilities.

Systems that are dying are rigid, mal-adapted, resistant to change, obsessed with obscuring their failure and retaining their grip on cronyist privilege and power. Big Pharma: dying. Banking: dying. Governance, a.k.a. political processes: dying. Enforced consensus: dying.

Those slices of the economy that are exposed to competition and innovation have a choice: adapt or die. Everything that is protected by monopoly–private-sector cartels, government, government-managed sectors such as Big Ag, Big Pharma, Military-Industrial Complex, Higher Education and the entire intelligence agency alphabet soup–are focused on maintaining their grip on power.

“Adaptation” for those systems busy dying has been reduced to limiting transparency, PR campaigns aimed at diverting attention from their rackets, devoting resources to protecting their cronyist skims, desperately clinging to the status quo and fighting off innovation that threatens to disrupt their rackets.

What we have is a bunch of sclerotic, dying institutions and systems resisting anything and everything that threatens to disrupt the status quo, and a much smaller, agile ecosystem that is busy being born: crypto-currencies, peer-to-peer networks, automation, software that’s eating the world, decentralized governance processes, localized production and more.

To continue reading: Those Systems That Aren’t Busy Being Born Are Busy Dying

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