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Don’t confuse capitalism with corporatism

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Populist movements are rising up, decrying the “danger and destruction” of capitalism. This false populist sentiment is perpetuated by four groups: politicians manipulating the “us vs them” mentality, the ultra-rich who wish to see others not succeed, university professors who have either never worked in the real world or have spent so much time in academia they forgot what the real world was like and blindly idealistic college students that also embrace “microaggressions” and “trigger warnings.”

It is an easy argument to make: the rich were made rich by a rotten capitalist system that oppresses those noble, hardworking innocents who do the actual labor. They want the system to be more fair, or slanted in their favor, even to cap earnings and opportunities. They witness a capitalist system that controls their lives, is in bed with government, can buy all the influence it wants, randomly destroys communities and cold-bloodedly lays off thousands of workers, simply to save money or increase stock prices.

Capitalism, however, is not the culprit though. It is corporatism, the collective mentality of the corporation that views workers as interchangeable and customers as lacking options. We do not live in a free market: we live in a market controlled by the interrelation between monolithic corporations, Wall Street and the Government. These three entities are what control our economic and professional opportunities, not capitalism.

Capitalism, specifically small business/entrepreneurial capitalism, is the antidote to this. Small business/entrepreneurial capitalism is a structure that allows anyone to achieve their goals inside the system or outside of it. It’s a system that is not rigged to the highest bidder. If the United States operated in a pure free market system, then the bailouts to Wall Street, the auto unions and the auto industry would not have happened. Those who engaged in reckless business practices would have been eaten up by the market, and the void created by these organizations would have been filled with new entrants.

It is corporatism that has created the pathway for GE, Goldman Sachs, Hollywood and GM among others to have incredible access to the White House and Congress, not to mention access to bailout money. It is corporatism that has allowed tech companies such as Google, Facebook, Apple, and Microsoft to partner with the NSA, providing data on millions of their users to the shadowy government agency. They are able to act with impudence because there is no real structure for new organizations to challenge them. Government works to protect its friends and prevent new entrants from becoming major players in any industry.

The system in play now is designed to provide the illusion of opportunity, when in reality the opportunity is there only for a selected few. Corporatism is the economic partner of communism and totalitarianism, seeking to decrease opportunity and force allegiance and servitude. It is corporatism that creates the rules of industry and barriers to entry and it is corporations that purchase votes in their favor and prevent start-ups from challenging them. It is corporations that control the media, determining what we hear, see and how our opinions are formed.

No one in power is willing to give it up. It is far easier to buy the protection needed from the government or simply buy those businesses that could challenge it. A pure small business/entrepreneurial capitalist system is the antidote to this rigged structure.

Opening up the fields to innovation and market access would create greater wealth and opportunities for millions across the country and the world. This system would also create access to greater education and freedom. A true capitalist system would put the burden of responsibility and accountability on the individual and force people to work harder, take chances and own their success or failure. With the control structure that is in place now, there is an incredible disincentive on personal responsibility or initiative.

It is small business and entrepreneurial capitalism that will solve the problems of poverty and corruption around the world. For decades, we have seen government and corporate actions yield no progress yet fools think the answer is more of this, not less. This is why corporations and government oppose a true capitalist system. It challenges their power. Oligarchs are not needed; that is what they fear the most.

About Matt Rogers

Matt Rogers is a passionate believer in the power of small business capitalism and opportunity creation. Through his experiences in banking, international business and academia, as well as living internationally, Matt possesses a unique view of entrepreneurship, innovation, and culture and how these forces can benefit a society. Matt currently teaches entrepreneurship and innovation in Bogota, Colombia and writes about the importance of entrepreneurship and innovation in an era of growing government regulation and corporate power. He can be reached at matt.f.rogers@gmail.com

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