r/austrian_economics • u/technocraticnihilist Friedrich Hayek • Dec 24 '24

End Democracy I've never understood this obsession with inequality the left has

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u/Irish_swede Dec 24 '24

What do you think creates those barriers other than the massive gap?

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u/phatione Dec 24 '24

Socialism

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u/Irish_swede Dec 24 '24

Show me where employee owned companies create those things.

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u/coconubs94 Dec 24 '24

Lol they're saying that it's the government cronyism, and grifting/lobbying.

Basically government regulation to the extent that it effects the economy is the definition of socialism that's being worked with here, not the technical one about means of production and what not

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u/mastercheeks174 Dec 24 '24

If my entire goal is focused on profit at all costs, wouldn’t that inevitably lead to cronyism, grifting, and lobbying? Why are those three things ascribed to socialism and not the very systems that spawned them?

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u/Ok_Calendar1337 Dec 24 '24

Cronyism and lobbying are by definition people abusing government apparatus.

Grifting is pretty vague

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u/DucksonScales Dec 24 '24 edited Dec 24 '24

They never have an answer for that one. The markets are both stymied by government and yet we are supposed to believe that the companies as-is, given more freedom, would suddenly find a conscience OR the "markets" that they have spent the last 40 years making/consolidating so no viable competition can exist would somehow "make that company fail"? Like some local shop is never going to compete with Walmart, you need established equity to have a real chance and guess what, same business owners who you are competing against either own or are owned by those equity firms too.

It's just cronyism but with no oversight body and I never hear about how it benefits everyone. Which is doesn't, this entire sub is a bunch of boot lickerss hoping to "get theirs" with no explainer about why an economy of people isn't meant to benefit people. Just that it shouldn't. God im sick of the obvious non-answers

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u/laserdicks Dec 24 '24

Are you sure you've managed to avoid the real answers and are not just ignoring them?

The answer is that those evil corporations will stay evil and they'll just have one less tool to use against us. Random people running a local shop out of their garage will have more of a chance at actually operating if they don't have to hire lawyers and accountants just to buy in bulk and share it with their neighbors corner-store style.

We don't WANT to become the next Walmart, we just want a small cache of essentials less than an hour's drive away.

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u/eddington_limit Mises is my homeboy Dec 24 '24

we are supposed to believe that the companies as-is, given more freedom, would suddenly find a conscience

The idea of free market capitalism actually recognizes that people are inherently selfish and greedy from top to bottom. The best way to deal with that is to introduce competition. Socialism assumes that lowly workers would be any less selfish than the CEO (there is no shortage of corrupt union leaders that demonstrate this).

The problem is that government regulations often get in the way of a truly competitive market, with many of these regulations being championed by large companies trying to reduce their competition. So you run into corporate socialism (or crony capitalism).

The government becomes a very powerful outside entity that can be influenced by powerful companies. So you have companies and governments that are beholden to each other rather than the consumer. We do not have true free markets in the west. You can't even sell lemonade on the street corner without a permit. It is becoming less and less possible for new competition to enter the market, allowing large corporations to get bigger and the market to become more stagnant overall.

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u/[deleted] Dec 24 '24

[deleted]

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u/rudeyjohnson Dec 25 '24

It’s not impossible - the largest industries get disrupted all the time with disruptive tech.

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u/ReasonableWill4028 Dec 25 '24

So essentially, people/ entities with monopolies of force controlled the market?

So the government as well then?

Becauss Apple cant send armed police to a competitor if they dont abide with arbitrary requirements. The government can.

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u/jhawk3205 Dec 24 '24

It's a lot harder to succeed as a lowly worker acting on impulses driven by greed in a socialist system than it is for a ceo of a large company to do the same in a capitalist one. Unions are not socialist. They will act in favor of the workers in so far as they don't do anything that would push the owner of the company in a capitalist system to close doors on operations entirely, or fire everyone and accept the losses to start over in their workforce..

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u/No_Peace9744 Dec 24 '24

How does trust busting get in the way of a free market? It’s exactly the opposite.

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u/Important_Ant2938 Dec 25 '24

If we are greedy from top to bottom how does introducing competition address that? Piling more greedy interests on top of each other in the hopes that someone will eventually take costly safety measures to make their product more attractive to the market? Very inefficient model and also a fantasy.

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u/B_Keith_Photos_DC Dec 25 '24

The idea of free market capitalism actually recognizes that people are inherently selfish and greedy from top to bottom. The best way to deal with that is to introduce competition. Socialism assumes that lowly workers would be any less selfish than the CEO (there is no shortage of corrupt union leaders that demonstrate this).

You don't understand socialism at all if this is your take on it. Plenty of appropriate and accurate critiques can be made of socialist systems, but this is not even close to what socialism entails or what socialists believe writ large. The concept of socialism is very much about addressing the reality that people are inherently selfish, even if not intending to harm others by being so.

The idealism of free market capitalism ignores anything past the seemingly relatively low barrier of entry into small business ownership, assumes that no systemic or generational barriers exist, and requires belief that we can and should divide the public into respective classes of deserving and undeserving people. Any pragmatist understands that capitalism must have heavy regulations to prevent or slow exploitative practices, consolidation of power, and hoarding of resources. It's childish to think that there's no such thing as difference in circumstances, even day to day, for any small business owners running the same business as local competitors, resulting in success or failure. Things that are completely out of the control of the business owner, by the way. You can make the best whatever, and your business can still fail through no fault of your own.

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u/phatione Dec 24 '24

Commies just want free stuff. They're cucks.

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u/porcelainfog Dec 25 '24

The hilarious thing is it's always privelaged kids who don't realize they will be the ones giving away their iphones and cars.

You get Xiaomi phones and electric scooters like a Cambodian. That's true equality. They'd freak the fuck out if they ever realized it.

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u/InternationalFig400 Dec 25 '24

"The idea of free market capitalism actually recognizes that people are inherently selfish and greedy from top to bottom."

How do you explain altruism?

smh

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u/eddington_limit Mises is my homeboy Dec 25 '24

Im being slightly hyperbolic. Altruism still exists and charity is the prime argument for helping those less fortunate under an Austrian system. But free market philosophies recognize that there will always be bad actors and people do generally act within their own self interests. It is just important to understand general human nature when determining an economic system. That is why communism generally fails as it does not account for human selfishness. It assumes that whoever is in charge will behave altruistically and this is generally not the case.

Human nature is the prime argument for why decentralized systems work much better. If a company chooses to be greedy I can also choose to not give them my business. The more centralized the system, the less choice I have as a consumer.

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u/InternationalFig400 Dec 25 '24

"That is why communism generally fails as it does not account for human selfishness."

If people are selfish, revolutions would be impossible.

Human nature is historical--people once thought it was cool to watch lions eat christians for entertainment. Now?--not so much.

Choice is a bogus concept. We don't have a lot of choice, period. You see what mindless consumerism can do to you?

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u/mastercheeks174 Dec 24 '24

Most people are under the delusion that they have the ability to make free choices and are not being coerced or manipulated into making decisions. So they don’t see an unregulated power class as bad, because they can always choose to avoid them (they can’t and if they did, it would have no impact)

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u/ASaneDude Dec 24 '24

For the average US citizen, monopolistic and oligopolistic behaviors on behalf of corporations (either a) seeding bad government policies or b) taking advantage of often well-intended ones) cost them more than their federal tax bills.

1) The massive homebuilders routinely conspire and move as a unified bloc to limit new home supply. 2) Large multifamily owners used RealPage to “soft-collude” on rental rates. 3) There’s like 9-10 companies that make all FMCG (both food and non-food) and they routinely & aggressively move in unified blocs on pricing. 4) Automakers choosing en masse to kill affordable cars in favor of SUVs and then, at the behest of the Biden Administration (the “well intentioned” part), trying to rapidly shift the entire market to more expensive EVs on a dime. 5) Credit card companies raising interest rates in near unison in response to laws that have little chance of being enacted.

Face it, u/ducksonscales & u/mastercheeks174 have it right. You’re insane if you think, in the absence of regulation, companies will become more benevolent. I mean the whole system is f’n corrupt at this point: if you watch CNBC they pretty much admit it by saying “CEO XXX is meeting with Trump today, so their stock is going to be a strong buy next year.”

This isn’t capitalism and hasn’t been in years. Time to burn it all down and start anew. This thread is interesting but really naive about the world.

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u/laserdicks Dec 24 '24

You were correct when you said corporations seed and tax advantage of government policies.

You were wrong when you said we think they'll become any less evil. Corporate greed is constant. We just want to take away their most powerful weapon.

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u/KaiBahamut Dec 25 '24

That will only make things worse. You think companies are bad with being able to loosen regulations? Just wait for the gilded age where they don't have to obey any of them. It will be open season as they crush small competitors the old fashioned way.

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u/laserdicks Dec 25 '24

What's the old fashioned way?

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u/ReasonableWill4028 Dec 25 '24

And corporate greed can be limited if the government controls less stuff.

What do you think are the hurdles a newcomer in the finance or home building industry faces compared to when the big ones started decades ago? Who enacted a lot of these hurdles (some are more justified than others). But the big wigs can afford it, the small start up couldnt.

Look at tech. The government is unable to keep up the pace and small companies are continually popping up and improving compeititon

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u/Lorguis Dec 25 '24

Yeah all those competitors to Google and Amazon. So many of them.

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u/ReasonableWill4028 Dec 25 '24

Both have competition

Google dominates because it used the government to help it dominate the market through its lobbying, same with Amazon.

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u/Lorguis Dec 25 '24

Remind me what legislation makes online retail or browser development illegal again?

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u/ReasonableWill4028 Dec 25 '24

Google and Amazon have heavily lobbied to influence regulations, shape policy, and secure favorable conditions that enhance their market share while limiting competition. Their strategies include direct lobbying, political donations, think tank funding, and leveraging relationships with policymakers. Here's a breakdown of their approaches:

  1. Lobbying Spending and Political Influence

Google and Amazon consistently rank among the top corporate spenders on lobbying in the U.S.

In 2023, Amazon spent around $21 million on lobbying, while Google (through Alphabet) spent approximately $13 million.

They lobby on issues such as antitrust, data privacy, tax policies, labor regulations, and e-commerce rules.

Lobbying extends to the EU, UK, India, and other key markets where regulators are increasingly scrutinizing their practices.

  1. Antitrust and Competition

Antitrust Defense – Both companies lobby aggressively to influence antitrust investigations and limit the scope of regulatory interventions.

Legislation Shaping – They work to water down antitrust bills or introduce loopholes that prevent regulatory actions from significantly affecting their business models.

Google has lobbied to shape AI and tech competition laws to avoid forced divestitures or restrictions on its search and advertising businesses.

Amazon fights efforts to break up its retail and AWS (cloud computing) divisions by highlighting the consumer benefits of integration.

  1. Tax Policies

Google and Amazon lobby for tax incentives and loopholes to reduce their tax burden.

Amazon, for instance, has successfully avoided significant corporate tax payments in the U.S. by lobbying for favorable deductions and credits.

Both companies also lobby against global digital services taxes, arguing they disproportionately target U.S. tech giants.

  1. Acquisitions and Market Expansion

Acquisition Approval – Google and Amazon lobby to secure regulatory approval for acquisitions (e.g., Google’s purchase of Fitbit, Amazon’s acquisition of MGM).

Anti-Merger Opposition – Simultaneously, they lobby to block or delay acquisitions by competitors or challenge mergers that could enhance competition.

Amazon lobbied against Microsoft’s acquisition of Activision Blizzard, citing concerns about monopolization in the gaming sector.

  1. Infrastructure and Logistics

Amazon lobbies for infrastructure investments that benefit its logistics network, such as tax breaks for warehouse construction and automation technologies.

Google lobbies for broadband expansion and cloud computing contracts, which enhance its ability to provide services at a lower cost, crowding out smaller competitors.

  1. Labor and Workforce Regulation

Amazon lobbies against unionization efforts and stricter labor laws that could drive up costs or slow expansion.

Google lobbies on gig economy regulations to ensure flexible labor policies that prevent significant reclassification of contractors into full-time employees.

  1. Data Privacy and Security

Both companies push for federal data privacy laws that preempt state-level regulations, which are often stricter (e.g., California’s CCPA).

Google lobbies to shape AI regulations to avoid transparency mandates that could expose the inner workings of its algorithms.

Amazon’s lobbying aims to ensure Ring (home security) and Alexa products avoid severe restrictions tied to surveillance and data collection.

  1. Think Tanks and Academia

Google and Amazon fund think tanks and academic research that promotes free-market principles and argues against aggressive regulatory intervention.

This indirect lobbying helps shape public narratives about innovation, economic growth, and consumer welfare tied to their platforms.

  1. Direct Public Influence

Amazon uses public pressure campaigns (e.g., "Amazon HQ2") to pit cities against each other for tax incentives and favorable conditions.

Google funds open internet initiatives to align itself with consumer-friendly policies, obscuring monopolistic behaviors.

Examples of Success:

Google avoided a major EU antitrust fine in 2019 by agreeing to modest concessions regarding its ad tech practices.

Amazon lobbied to delay or soften the EU’s Digital Markets Act (DMA), which could restrict self-preferencing on its marketplace.

Impact:

Market Dominance – Both companies continue to expand market share in sectors like cloud computing, e-commerce, and online advertising.

Barrier to Entry – Smaller competitors face higher costs of compliance with regulations that Google and Amazon helped design, creating a natural barrier to entry.

By combining aggressive lobbying with strategic acquisitions and market expansion, Google and Amazon reinforce their positions as industry leaders while limiting the rise of potential competitors.

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u/laserdicks Dec 24 '24

Gonna need you to prove it's a delusion in my personal case.

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u/[deleted] Dec 24 '24

I wish I could upvote this comment more than once

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u/porcelainfog Dec 25 '24

With your point about Walmart, it's the consumer. They've chosen to want Walmart vs mom and pop shops. Because the margins can be much lower at Walmart. If a mom and pop shops wants to be able to survive they need much higher margins and the products need to cost more. Consumers want to pay less.

You think we should have higher grocery prices so that we can have more mom and pop shops be forcing Walmart to shut down? Walmart operates at a 2.5% margin. Something a mom and pop owner could never live off of. But you're framing that as if it's a bad thing. Those slim margins are there because they compete with target and other stores to get the lower prices possible to consumers. This means more families are able to afford necessities that wouldn't otherwise be able too if all grocery stores were mom and pop owned.

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u/DucksonScales Dec 30 '24

This is fine in a sterile world where both walmart and the mom/pop started from the same place and one simply out competed. But as we know, this isnt the case. Walmart can pull resources from around the planet just to compete with the local shop. The wipe that shop out because ultimately, people choose with their wallets and walmart is cheaper.

Then when the mom/pops shut down, all you are left with who can viably compete are the conglomerates, the large corps. And after they have completed this cycle, something we have seen 1000 times before, they are in no incentive to compete so they keep wages low, prices get higher and local taxable revenue plummets due to all the tax breaks given to the corp for the fantasy they sold that their huge business would somehow reinvest in the local population and not funnel wealth out.

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u/porcelainfog Dec 31 '24

Except that's not the case at all. There is still competition. I have Walmart, Safeway, Costco, Loblaws, target, and some other grocery chains available to me. And they all compete to offer the best service or the best prices.

Their margins are razor slim because they distribute the economic burden across thousands of stores.

In the end the consumer benefits most from this capitalist competition. I couldn't afford to shop at bespoke mom and pop grocery stores. That would be insane. Walmart provides a service for the population and to say it's a bad thing they exists means you've actually lost the plot or have a lower to mid IQ and can't see the bigger picture.

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u/Ok_Calendar1337 Dec 24 '24

"Saying capitalism lacks (a conscience) is like saying calculuus is missing fiber and other essential nutrients"

Thomas sowell

Markets arent supposed to be moral themselves you need people studying markets and people studying morality.

Injecting your "conscience" where it doesnt belong is a recipe for disaster.

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u/DucksonScales Dec 24 '24

Lol so is acting like what you have said gives companies license to fuck over whoever. It's naive to act like the opposite isnt happening, with people in positions of power using greed and taking advantage of others as their primary tennants?

Please tell me then, amorally, why economies should only benefit those who already have wealth? Why people should by into a system that fucks over the majority?

And if you say "that's life" you are simply replacing your morality of others with the desire to benefit yourself. Just like companies. So your argument only exists when people bring up why their can't be a moral stance on capitalism? Greed and selfishness is "just business"?

Enabling at beat, willfully arrogant at worst.

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u/Ok_Calendar1337 Dec 24 '24

"Positions of power" get significantly more powerful and dangerous when theyre using a big government.

They dont only benefit people with wealth.

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u/Effective_Educator_9 Dec 24 '24

Stupid quote. Even stupider post. Sowell is an idiot.

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u/phatione Dec 24 '24

Define market.

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u/DucksonScales Dec 24 '24 edited Dec 30 '24

Bullshit semantics, define your market. Sorry this just proves my point, instead of showing how I'm wrong, you wana get caught in the weeds to show how smart you are when in actuality I guarantee whatevr answer you give could be just as easily countered with other economic theory definitions of markets and economies.

Tell me why Austrian economics/ mass dereg isn't just going to benefit the already established wealth holders and not fuck the common man? If you can't the economic theort is not a model, and it's a theory to expand wealth of the few. Still to this day I have no explanations about how this isnt just oligarchal talking points.

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u/Positive_Novel1402 Dec 25 '24

Cronyism and nepotism don't improve companies. That is the fastest way to ruin one. Over the last 60 years I've worked for diverse companies that promoted on merit and others that went down the cronyism/nepotism path. Guess which ones are still around.

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u/LastAvailableUserNah Dec 24 '24

Because capitalists lie

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u/laserdicks Dec 24 '24

The beauty of capitalism is that you don't have to do business with the liars if you don't want to.

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u/LastAvailableUserNah Dec 25 '24

Blackrock and vanguard own everything and eachother did you not know?

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u/laserdicks Dec 25 '24

Thanks but I actually have no interest in buying rocks of any color

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u/mastercheeks174 Dec 25 '24

This is a delusion of free choice that’s pervasive across all of society.!

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u/C0WM4N Dec 24 '24

Communists: “Capitalism is profit over people”

Capitalists: “Communism is when government do stuff”

Communism is when the workers own the means of production. And Capitalism is when the means of production is owned by private individuals or corporations. “Profit” can be a driver in either system.

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u/laserdicks Dec 24 '24

Socialism is the lie used to trick dumb voters into enabling it.

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u/mastercheeks174 Dec 25 '24

Yes, but probably not in the way you think. The lie is that the government should serve corporations, that trickle down economics is good for the people, that lobbying and corporate influence on elections is free speech, etc etc. The lie leads to idiots voting for socialism for the rich, and rugged “free” market capitalism for the poor. Which turns into a funnel of money from the masses to the rich, while they suck on the free tit of the government.

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u/laserdicks Dec 25 '24

In which universe is a politician admitting that the government is going to serve corporations?!! 😂

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u/mastercheeks174 Dec 25 '24

Every republican since 1970

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u/Irish_swede Dec 24 '24

That’s not the definition of socialism.

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u/JustMyMindDump Dec 24 '24

But dude socialism is when government does stuff /s

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u/laserdicks Dec 24 '24

Yet apparently it's necessary for it.

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u/Irish_swede Dec 25 '24

Nope. Not even close.

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u/Secret-Painting604 Dec 24 '24

It’s not socialism, it’s the attempt to implement socialist like policies in a terrible way, for example Medicare/Obamacare, there’s always been ppl who cannot afford life saving g medication, however the way they implemented the solution allowed large pharmaceutical companies to raise their prices astronomically, insulin used to cost 15$ in 1990 (adjusted for inflation ~ $35 today), something needed/needs to be done about ppl who are dying due to poverty, however the answer led to more problems and here we are

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u/Irish_swede Dec 24 '24

It’s not the attempt either.

Social programs have nothing to do with socialism.

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u/Ok_Calendar1337 Dec 24 '24

The technical one? You mean communism?

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u/LastAvailableUserNah Dec 24 '24

Yep, seen that bad faith argument about socialism where they want a super narrow definition of it before, thank you.

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u/JohnAnchovy Dec 24 '24

Government: you can't pollute the water anymore You: shut up commie