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Trump Is Doubling Down On Economic Politics That Destroyed The Us Economy. Differences Between Neoliberalism And Free Market Capitalism Vs Socialism.
This speech accidentally exposed the truth about the US
US Vice President JD Vance gave a speech about globalization that inadvertently revealed the truth about the US empire, the goal behind the new cold war on China, the economics of imperialism, and how the Trump administration is serving billionaire Big Tech oligarchs in Silicon Valley at the expense of the working class.
I wanted to write again about ideology and how it is used to manipulate people. However, in my recent post, I had a discussion in the comments regarding socialism, and I realized that many people do not fully understand this subject. There are still numerous misconceptions about it, which is why I wanted to address this topic. I found a video that serves as a solid basis for discussing socialism.
I will also discuss neoliberalism – cancer promoted by the U.S. and opponents of socialism, which the U.S. is attempting to export to Europe. Neoliberalism is represented by policies like Reaganomics and Thatcherism, which I have written about before. I previously warned that Thatcherism was making its way into Europe, and we can now see this happening through plans to dismantle social welfare systems to increase military spending. This trend reflects the Americanization and “Nazification” of Europe, which I have previously warned about.
I also want to point out that I referred to the author of this video, Ben Norton, as a mouthpiece for China, and I still hold that view. While I agree with most of what he says – certainly more than with most Western sources – I dislike that he omits China’s economic issues. I almost fully support his analysis, but for him to be truly objective, he would need to acknowledge not only Western economic issues but also China’s. However, he does not do this.
Ironically, China’s economic issues stem from liberalization and its private sector. I recently listened to an analysis of China and Xi Jinping, where it was mentioned that Xi believes Deng Xiaoping’s liberalization policies were, at least partially, a mistake. I agree with this perspective because China’s current economic problems originate from those very policies. This realization surprised me, as I find myself agreeing with Xi Jinping’s analysis, given that China’s economic difficulties largely stem from the private sector – especially private banking and real estate companies.
Free Market Capitalism = Monopoly: “Competition Is for Losers”
First, I would like to point out the irony of so-called supporters of free-market capitalism who claim that “competition is for losers” while praising monopolies. Monopolies are harmful to markets, as they create economic rent and contribute to the formation of a rentier class, which Marx spoke about. I will use an explanation I recently wrote in the comments of my previous post to elaborate on this subject.
I came across a great analogy regarding capitalism and free markets that summarizes one of Marx’s criticisms of capitalism:
“Capitalism and free markets are like giving every person in the world a single coin and letting them play coin toss infinitely. In the end, one person will have all the coins.”
This issue, which Marx identified, highlights how capitalism naturally leads to capital accumulation. In capitalism, capital generates more capital, meaning that those who already own capital will continue to accumulate more, while those who do not will fall further behind. As a result, capitalism and free markets inevitably lead to monopolies. Many people argue that monopolies are anti-capitalist and anti-free market, but in reality, monopoly is the final stage of capitalism and free markets. Due to the fact that capital generates more capital, combined with the effects of economies of scale, capitalism will always trend toward monopoly.
I have previously explained why monopolies are harmful, and Marx also described monopoly as a form of rent-seeking. Rent-seeking occurs when prices increase without any corresponding improvement in quality or consumer satisfaction. One of the benefits of a free market is that competition forces companies to improve quality and customer satisfaction, which justifies higher prices. However, in a monopoly, prices increase simply because there is no competition – not because products or services have improved. This is what Marx and socialists sought to combat as economic rent.
The goal should be to eliminate as much economic rent as possible – any factor that raises prices without improving quality or consumer satisfaction. Because of capitalism’s inherent tendency toward capital accumulation, there must be progressive taxation: taxing the wealthy more and reducing taxes for the poor to counterbalance this effect. The same principle applies to corporations: higher taxes on large corporations and lower taxes for small businesses help prevent the formation of monopolies.
Capitalism is based on so-called free markets, but it is also responsible for destroying markets due to capital accumulation. While capitalism is the best system we currently have, it requires socialist intervention to prevent free markets – the foundation of capitalism – from being eroded by capitalism itself. Capitalism contains internal contradictions that, if left unchecked, lead to self-destruction. Marx understood this dynamic and explained it in depth. If we truly want free markets, we need socialist policies to regulate them and prevent capitalism from cannibalizing itself and turning into monopolies.
Now, here is a short video from Last Week Tonight from some time ago – back when the show was still good and before it sold out. Nowadays, Last Week Tonight has been neutered by corporate influence, likely through advertising. However, the older episodes were insightful and effectively highlighted the issues I am discussing.
Corporate Consolidation: Last Week Tonight with John Oliver (HBO)
Big businesses are getting even bigger thanks to a rise in corporate mergers. John Oliver explains why that could make you want to physically destroy your cable box. Connect with Last Week Tonight online…
Tech Monopolies: Last Week Tonight with John Oliver (HBO)
John Oliver discusses tech monopolies, and how to address the hidden harm they can do. Connect with Last Week Tonight online…
Industrial capitalism so the golden age of capitalism, based on a planned economy and socialism.
I have touched on this subject many times in my posts, and in my opinion, the best sources and authorities on this topic include people like Michael Hudson. Another insightful person to listen to is Ha-Joon Chang, who wrote the book 23 Things They Don’t Tell You About Capitalism. Here is a short lecture of his as an example:
Ha-Joon Chang – 23 Things They Don’t Tell You About Capitalism
Development economics expert Ha-Joon Chang dispels the myths and prejudices that have come to dominate our understanding of how the world works in a lecture at the RSA.
4:20
“For example, in the 19th century, when social reformers were trying to introduce legislation in the British Parliament to regulate and partially ban child labor, there was a huge uproar among free market supporters. And believe me, this regulation was incredibly primitive. They banned factory work for children up to the age of nine. Children between the ages of 10 and 16 could work, but only up to 12 hours a day. Yes, I mean, they were really going soft on these kids, huh? And this was applied only to cotton factories, which were considered particularly harmful to workers’ health.Even then, free market supporters said, ‘No, this is absolutely outrageous. This is undermining the sanctity of the idea of freedom of contract, which is the foundation of a free market. You know, these children want to work, these people want to employ them. What is the problem?’ Today, even the most ardent supporters of the free market would not endorse this kind of idea.
And this example quite powerfully illustrates that, like beauty, freedom of the market is in the eye of the beholder. So, if you believe that children should have a childhood, receive an education, and shouldn’t have to work, then, of course, you will think nothing of regulating child labor. If you don’t believe that—like those 19th-century British free market supporters or many capitalists in developing countries today—you’d say that actually trying to regulate child labor is an infringement on the workings of the free market.
So actually, the very definition of the free market is political. Free market economists like to tell you that politics should be kept away from economics because it interferes with the market’s rationality and makes it inefficient. But in reality, the very definition of the boundaries of the market—who can participate, what can be sold and bought, and how they can be sold and bought—is politically determined. When free market economists say, ‘We are scientists, and those who want to intervene in the market are politically minded people,’ they are actually not telling you the truth. The truth is, the free market position is as political as any other position.”
I have used videos featuring Michael Hudson in many of my posts, and I also touched on this subject in one of my posts which touched on the subject of the Japanese economic miracle.
Now, let’s talk about the planned economy, as this subject is often misrepresented and misunderstood. We are not talking about a fully planned economy without markets. What I and people like Michael Hudson discuss is a planned economy with markets. Examples of this include America after World War II, Japan’s post-war economic miracle, as well as China and South Korea.
A planned economy is a market economy and it does not involve fixing prices or planning the entire economy. Instead, it focuses on planning credit and resource allocation. This means you still have markets and competition - key aspects of capitalism - but you place guardrails on capitalism to prevent the free market from devouring and ultimately destroying itself.
An example of this is free market capitalist consolidation, which occurs when capital earns capital, leading to capital accumulation. This accumulation results in the concentration of markets, which is further exacerbated by the economy of scale, ultimately leading to monopolies. While monopolies are bad for consumers, they are good for profit, so the natural profit-driven system strives to achieve them. As Peter Thiel famously stated, “Competition is for losers.”
This issue was also well explained in a Last Week Tonight segment, Corporate Consolidation: Last Week Tonight with John Oliver (HBO), which I have linked here is fragment with Jim Cramer:
5:53
“I always say competition, while great for you, the consumer, isn’t anathema in terms of profits. Sometimes, a business would prefer to be a total monopoly with no competition whatsoever, and while that's ideal, it's very rare to see a genuine monopoly—because, of course, it's against the law. Which brings us to the next best thing: an oligopoly, where a handful of companies control an entire industry, co-existing peacefully without much in the way of price competition.”
This explains why people like Peter Thiel say “Competition is for losers” and why companies strive to create monopolies - good for profits but bad for consumers.
Another issue is that in a profit-driven system, things beneficial to the economy are often less profitable than things that are harmful to it. Why would a capitalist in a profit-driven system invest in the steel industry, which yields only 1–2% returns, when financial speculation and monopoly creation can bring 5–6%? It doesn’t matter to the capitalist that improving the steel industry benefits the broader economy - these benefits are external and don’t directly enhance the company’s profits. In contrast, speculation and monopolies, while harmful to the economy, are more directly profitable.
This contradiction of free market capitalism leads to self-destruction because it prioritizes individual profit over the overall health of the economy.
To illustrate this, let’s use an analogy. Imagine I am a venture capitalist who profits from dismantling failing companies. If I had the ability to cause economic crises, which would destroy companies and make them fail, I would actually increase my market and profits. While this would be disastrous for the overall economy, it would benefit me financially.
Even if I were a good person leading a company, if my company were publicly traded and had investors, I would be pressured to cause economic crises and make companies fail. If I refused, I could be fired or even sued by my investors due to fiduciary duty, which legally obligates me to maximize their profits.
This creates an absurd situation: if I have the ability to benefit from causing an economic crisis and don’t do it, I could be sued for not acting in my investors' best interests. This is the problem Marx described regarding the dysfunction of free market capitalism - it destroys itself because it prioritizes individual profit over the economy's overall health.
This is why American industrial capitalism - the golden age of capitalism - was based on a planned economy and state intervention in free market capitalism. The same system created the Japanese economic miracle and transformed South Korea and China from poor, backward countries into economic powerhouses.
Interestingly, the only two countries that built strong economies with advanced industries from scratch - South Korea and China - both had planned economies with five-year plans. No country with so-called free market capitalism has been able to achieve the same or even similar levels of development.
Again, a planned economy does not mean eliminating markets or competition. On the contrary, a planned economy is what saves markets from the free market system itself, which inevitably leads to monopolies and perverse incentives that weaken or even destroy the economy. This happens because capitalism is driven by the profits of particular sectors, rather than the overall health of the economy. In such a system, certain industries can benefit from destroying the broader economy if doing so increases their profits - an inherent contradiction of free market capitalism.
Socialism = Market and Competition
As I explained, free market capitalism is actually against markets and competition, as its final stage leads to monopolies. Monopolies destroy markets and competition, so ironically, free market capitalism ends up undermining the very markets it claims to support. This means that if you value markets and competition, you should support socialism rather than free market capitalism.
Socialism does not destroy markets; instead, it places guardrails on the market and economy to ensure that markets and competition are preserved. Another advantage of socialism is that it addresses the contradictions of capitalism, which ultimately causes its own destruction. As I previously explained, in free market capitalism, certain sectors can benefit from harming the overall health of the economy. Companies are often forced to do so because if they don’t, their competitors will.
This problem is further exacerbated by fiduciary duty - if a company is publicly traded and has investors, it is legally obligated to prioritize profits, even if that means damaging the broader economy. In other words, a company could be legally required to harm the economy if doing so increases profits. This demonstrates how free market capitalism creates incentives that lead to its own self-destruction. Is this really the best and most efficient system - one that prioritizes individual profits over the overall health of the economy?
A planned economy helps address some of these problems by guiding resource allocation, such as directing credit where it is needed. In free market capitalism, external costs and benefits - such as the broader impact on the economy - are not considered because the system is based on individual profits rather than collective well-being.
For example, consider the steel industry. Suppose the steel industry generates as I indicated above 1–2% profit, while financial speculation and monopolies yield 5–6%. In a system driven purely by individual profits, no capitalist would invest in steel when they could earn far greater returns elsewhere. Free market capitalism does not take into account that speculation and monopolies are harmful to the economy as a whole. The negative effects of speculation are externalized and absorbed by society, while individual investors reap the benefits.
Likewise, in a free market system, investors do not care that the steel industry - while less profitable in the short term - provides long-term external benefits by strengthening and stabilizing the economy. Since these benefits do not directly increase investors' profits, they are disregarded. In other words, what is good for the overall economy is not necessarily the most profitable choice for individual investors. In fact, something that is harmful to the economy may be the most profitable option for investors.
Since investors in free market capitalism only focus on their own profits rather than the health of the economy, they will always choose the more profitable but damaging option over the less profitable but beneficial one. This issue becomes even more extreme due to fiduciary duty, which legally obligates companies to maximize profits - even if doing so is harmful to the broader economy.
External Profit and Costs
I have explained the issue of external profit and cost earlier, showing that, in fact, some investments that are profitable and healthy for the economy will not be taken, while investments that are unhealthy for the economy but more profitable for individual investors will be taken instead. This touches on the case where economically beneficial investments that are less profitable will not be pursued, while economically harmful investments that are more profitable will be. However, there is also the issue of economically beneficial investments that are unprofitable for individual investors. I have touched on this subject before in one of my comments under my post, using an example of public transport.
Let’s use the example of public transport again, which relates to the subject of private and national parts of the economy. This topic is often oversimplified, and people tend to think about it in a very simplistic way, leading them to ask, “Why would a state run a national company that incurs losses?” Looking at it simplistically, people ask this question because they assume that all enterprises, including state-owned companies, should be profitable and that operating companies that incur losses is inefficient.
Now, we return to the concept of external losses and benefits, which I touched on before. Just as some companies and parts of the economy are less profitable but still beneficial for the economy, there are also examples of companies that may operate at a loss but still contribute positively to the economy and the state overall. This may seem contradictory - how can running a company at a loss be good for the state? The best example of this is public transport, so let's discuss this topic using train companies.
Let’s say we have a state-owned train company that builds a new railway or station that is not profitable. The immediate reaction, based on simplistic analysis, would be to ask, “Why would a train company build and operate new railways or stations that are not profitable, even if it is state-owned?”
This is a simplistic analysis that considers only the individual profits of the company and does not take into account the concept of external costs and benefits. This new railway or station may not be profitable for the company itself because ticket sales generate too little profit. However, there are external benefits from this new railway or station, such as:
- Increased economic development in the area
- Construction of new factories, housing, and small businesses like local shops
- Job creation and better accessibility for workers
All these factors contribute to economic growth and increase state revenue through taxes. Those new factories, homes, and businesses pay taxes, which are external benefits that do not directly benefit the state-owned train company but benefit the state itself.
So, while the state-owned train company operates the new railway or station at a loss due to insufficient ticket revenue, the external benefits - such as increased economic growth and higher tax revenues - can outweigh the company’s losses. In this way, a state-owned railway company that operates at a loss can still contribute positively to economic growth, making it beneficial for the state in the long run.
If we look at this from this perspective, an unprofitable railway or station may seem like a bad decision at first, but in reality, it is a smart investment for the economy and the state. However, a simplistic analysis would argue that the state-owned train company is causing losses, making it a bad investment - yet a deeper analysis proves that this reasoning is flawed.
Now, a privately owned train company would not build and operate this new railway or station at a loss because it only considers its own profits and does not take into account the overall effect on the economy, including external costs and benefits.
This demonstrates that privatization is not always better, despite what we are often told. I am not claiming to be the ultimate authority on this matter, and I do not know exactly which parts of the economy should be private and which should be state-owned. There are smarter and more informed people who should make these decisions. However, the example of the train company shows that private profit-driven companies are not always the best option and that, sometimes, even companies that operate at a loss can be beneficial.
Individual profit-based analysis does not consider external costs and benefits. This, in turn, challenges the common misconceptions that “private is always better” and that “only profitable companies are good.” These ideas are myths that oversimplify the complexities of economic decision-making.
Conclusions
I hope this provides a broader, more advanced perspective on the economy and socialism while also dispelling some myths and misconceptions. We are often told that socialism goes against the market and competition, while in reality, socialism is what protects, supports, and defends markets and competition. In contrast, so-called free-market capitalism is what ultimately destroys markets and competition. So, if you value markets and competition, you should support socialism rather than free-market capitalism.
Some try to oversimplify these issues by claiming that, since socialism is based on intervention, it must inherently go against markets and competition. However, in reality, the lack of socialist interventions is what kills markets and competition, leading to monopolies, economic rent, and the rise of the rentier class - an issue that Karl Marx spoke about extensively.
This post is quite long, but concepts like these cannot be explained in a short and simple way. The tendency to oversimplify economic discussions is a form of manipulation that helps sustain myths and misconceptions.
I want to thank everyone who stuck with me until the end of this post, and I hope it has helped you understand why I am a socialist and what socialism truly is. My goal is to dispel myths, challenge misconceptions, and inform people, because I genuinely want to help make the world better for all of us and for our future generations. I feel a deep responsibility to do so, and in some way, I see this as doing God’s work and giving thanks to Him for what He has given me.
God has blessed me with health, wonderful parents, and a good life. He has also given me intelligence, and I believe I should use it to contribute something positive to this world. I do not get paid for writing this, and I understood pretty early that the truth is not profitable. As Buckminster Fuller once said:
“You have to decide whether you want to make money or make sense, because the two are mutually exclusive.”
And, as one of my heroes, Albert Einstein, said:
“Those who have the privilege to know have the duty to act, and in that action are the seeds of new knowledge.”
― Albert Einstein
And, as always…
“Knowledge will make you be free.”
― Socrates
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“Knowledge isn’t free. You have to pay attention.”
― Richard P. Feynman
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“Freedom is not free, you need to pay attention.”
― Grzegorz Ochman
Please pay enough attention, or we will all be screwed. God bless you all.
“Sometimes I dream of saving the world. Saving everyone from the invisible hand, the one that brands us with an employee badge, the one the forces us to work for them, the one that controls us every day without us knowing it. But I can't stop it. I'm not that special. I'm just anonymous. I'm just alone.” ―Elliot Alderson(Mr. Robot)
Michael Parenti - Free Market Mythology
Uploaded by Nicolas on 2018-04-03.
