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4/11/11

Economic, Social and Geopolitical

Are Free Markets possible with Big Business?...

It strikes me that long ago Big Business and Big Government created a peaceful co-existence arrangement along with Big Labor Unions out of mutual co-dependence, that a truly free market doesn't exist or is even possible under today's conditions. Our country is a big country and that in itself seems endemic to the nature of it, since we whitewashed our regional differences with pervasive look-alike fast food joints, big box stores and regional offices that serve only the headquarters in New York or Los Angeles. The completion of wiping out of all but the smallest differences in sections of our country occurred in the last 30 to 40 years. Regional variations were a valuable component of free enterprise, since they spurred innovation to meet common demands, adapting variations in providing products and services to suit local needs.

In a 1959 TV interview with an intellectually inferior Mike Wallace, Ayn Rand points out that the Industrialists of the late 1800s and early 1900s were the original collectivists, since they conspired with elected officials and government to elect laws and regulations in their favor. In doing so they began the distortion of markets, making them no longer actually free markets, instead closed ones. Workers in reaction to industrial labor laws in turn created labor unions to conspire with government to enact laws in their favor against the robber barons. The end result has been over decades markets have been altered to resemble more as agreements among large businesses and labor unions operating as collectives.

Businesses operate in their own self-interest to monopolize markets, fending off competition by securing laws in their favor, contracts that shut out potential competitors and broad copyright and patent laws that allow them to over exert rights over potential business adversaries. This has gone on so long it is now accepted as normal practice in commercial enterprise when it is not. Large corporations are experts at this, swallowing up anyone who has a better idea that doesn't violate contract law or a patent. If the potential competitor does not give in, they are harassed and become mired in expensive marketing wars and litigation. Unions are complicit with this because they are now part of the status quo and it is in their favor.

Established business leaders no longer seek to create products in the spirit of improving our lives and making things better. Their co-conspirators are business schools who churn out MBA graduates with uniform thinking of how a business should function with specific marketing mindsets. The marketing mindsets serves only their employers, to sell consumers goods they may or may not need. The quality, innovation, improvement and relevance of goods is not a consideration, they are concerned only with selling the idea of a product and not the worth and value of them in real life application. They are the enemies of free market capitalism.

In turn, their enemy is any change or disruption in the marketplace that may shift the balance out of their favor. Technological change such as the internet and scientific products, such as new medicine, that can easily be produced is an example of this. It is also the cause of the current shift in the economic, social and political in markets and why existing entities are filing lawsuits and counterclaims on new products. The result is Big Business and corporations are doing everything they can, with their government counterparts, to preserve the structure they have spent over a century developing. Due to the laws and regulations they have conspired to distort the bazaars we refer to as markets, they are sometimes temporarily winning. Apple still produces an idea and product and then tightly controls it, suing everyone in sight who has even a vaguely similar idea or product.

The question then is will the mutual aiding and abetting by current dominating large business entities, that contain tacit agreements among themselves, that keep markets under the control of a handful of large companies continue? Will the pharmaceutical industry, with the innovation of science and industry, be able to maintain control within a small group of mega-corporations that allegedly "compete" with each other with a wink and a nod? In order to avoid pure collectivism as promulgated by progressives and unionists, breaking down the lobbies of any existing industry that works to close markets must occur.

When Corporate Republicans talk about being for "free markets" it is as much a joke on the American people as when Democrats state they are for the "common man." The same is true when AT&T says they welcome competition and Non-Governmental Organizations say "let the best social service agency win" when competing for the same government grant money. Disassembling this legacy will be piece by piece at first and will seem both painstakingly frustrating and impossible in the beginning.

Just as the Civil War was followed by a more disrupting Industrial Revolution, shook up the economy and way of life of America, the current economic disruption caused by technological and scientific innovation has the potential to do the same. Our challenge is to bust down the walls built by entrenched business and government. Chipping away the bricks and mortar will be slow at first. We are in the beginning stages of a second wave of a current downturn, which has every signs of being an economic earthquake of epic proportions that in a day, the business and political walls will tumble down. The weakness will be from systemic structural problems, new disruptive technology and scientific entrepreneurs chipping away, culminating in a long period of regrouping of markets. At that time we need to ensure that markets are decentralized again, similar to the way business was once conducted regionally, but on a new and different scale. Small to medium sized businesses must then learn again to compete on an even surface, not comprised by government intervention, to reinvigorate the core of American ideals.

Ayn Rand "Destroying Capitalism from Within" 

http://www.youtube.com/watch?v=A-lptr_0Xck&feature=channel_video_title