The Fallacy of Competition in an Unregulated Capitalist System

Conservatives like to claim that “it’s corporatism, not capitalism” that’s to blame for our many economic and fiscal woes, but that’s a specious dodge. The fact is, corporatism is an inevitable result of capitalism, if necessary regulations and restrictions aren’t imposed to prevent it.

See, there’s this myth built up around the idea of competition that ignores the realities in favor of a fantasy about Gentlemen Trying To Be Their Best. It’s an appealing thought — everyone wants to work hard and try their damnedest and be judged on the quality and merit of their output. It’s nice to think that we can all join in the race and feel that camaraderie of entrepreneurship as we push and work and get out what we put in. I’d love that!

Sadly, that’s not what capitalism is. The reality is much harsher, and involves things like entrenchment that give extremely unfair advantages to businesses that have been around longer. The reality is that the barrier for entry is constantly rising, preventing the competition utopia that conservatives keep promising “if only we deregulate.” The reality is that lack of regulation decreases the ability to compete, at least for average folk like you and me.

See, businesses don’t compete merely by trying to provide the best product or service at the lowest cost to themselves. If allowed, they compete by manipulating things outside of the realm of the marketplace in order to give themselves unfair advantages. Patent trolling, lawsuits, no-bid government contracts, favors from friendly politicians — it’s all part of the competition, if there aren’t laws in place to prevent that from happening. And when everyone else is already doing it, you have to as well, or you’re operating with a handicap.

Corporatism isn’t just some unexpected fluke — it’s a feature. The system is designed that way, and kept that way by the people who stand to profit the most from it. It baffles me when libertarians claim that the only way to stop corporatism is to deregulate capitalism. That’s like saying the only way to stop robbery is to make it legal.

And this tendency isn’t limited to just business. Take a look at gerrymandering: Instead of competing by offering the best ideas and platforms and policies and plans, they — typically conservative politicians — “compete” by changing the voting districts to favorably benefit their parties, virtually guaranteeing the election of a given candidate. It’s the very same kind of cheating.

The trick is that most of us have a particular picture in mind when we think about “competition”, especially with regard to “The Market”: a simple, heartwarming image of our grandpa going out and buying a store in a small town and working hard and putting his heart and soul into his offerings. Maybe he didn’t make much, but he raised his family, and did his best, and had a friendly rivalry with the guy across town. But that’s a fantasy, an oversimplified and outdated narrative that’s been bound to the word “competition”, a word they then use like a hypnosis trigger phrase to warm our emotions and get us to sit complacently by while they manipulate and contort our government and our marketplace to ensure that they can continue to do what they do. They sell us the fantasy of “competition” in order to strip away our actual ability to compete.

All that happens when you take away government oversight is create a power vacuum. And the businesses that ooze into those vacuums and exert their authority (in much the same way that a government can exert its authority, funny that) are only ever going to act in their own self-interests.

Meaning not yours.

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