End the Unholy Alliance of Anti-market Intellectuals and Political Rents-seeking Business

As Schumpeter stated,

The expansion of the market has not only spurred economic growth, it has also lifted more people out of poverty, with increasing freedom, than any system in history. Nonetheless Capitalism has failed to gain popular legitimacy and has constantly been under attack.

The “third-way”, “managed capitalism” or “capitalism with a human face” they have all been tried and comprehensively failed. The fatal conceit of many social democratic intellectuals, wish to  use some managed socialism, is their belief that they can direct social change for the benefit of mankind. These intellectuals develop a social narrative to explain changes in society. Their storyline: changes is disruptive, yet ignore the immense wealth-creating capacity. The economy evolves and creative destruction is a necessary element. Social democratic intellectuals somehow believe that they can act like the schoolmaster handing out benefits to the deserving students, who are under rewarded in the marketplace. They argue that benefits diffuse too slowly, that not all benefit equally and that capitalism should be modified to better address poverty, public health and other social problems. They subsequently increase the size of the state substantially. In many European countries the state spends more than half of GDP (of what the country produces).  The additional regulation needed to “manage capitalism” have resulted in substantial corporate interest. Vested interest protect their positions by undermining competition through wielding political power. The anti-capitalist media academia and arts constantly cry that capitalism creates monopolies, threatens freedom and rewards greed. Yet we must conclude that no monopoly has ever existed without the support of government and that “crony-capitalism” has shown how greedy the social democratic intellectuals themselves really are. This unholy alliance of anti-market intellectuals and rents-seeking business must end!

Entrepreneurs are the drivers of economic and technological growth. They are heroes of our society.  Henry Ford, Steve Jobs and Anton Philips, they all thrived to make our life easier, more productive and pleasant. Entrepreneurs, unfortunately, too seem to believe the “politically correct” narrative and doubt their own morality. When current CEO of a petrochemical company is asked if he is doing enough to counter AIDS, poverty or global warming. He is quick to appease his critics.

Schumpeter for saw, the outcome of this cultural biasin the trend towards socialism:

The entrepreneur should educate the world and state that by providing more and better petrochemical products he is helping society. The Entrepreneur needs help. This will come in an age in which the dynamic properties of the entrepreneur will be valued to an increasing extent. I am more optimistic that Schumpeter and  and believe that capitalism, which is process increasing personal freedom will gain popularity. A move to freedom cannot be stopped, only slowed with increasing friction. Like the pyramids of Egypt, the Corporative Welfare State too will crumble. The evolution of the digital age will bring a larger demand for personal liberty and political accountability, and much smaller, more local and direct democratic states with it. They will only be able to survive if they have economies which are permitted to adapt to a more open world. The social democratic rising in Europe are hopefully the last flawed attempts at socialism. The winds are changing. The age of the entrepreneur is coming.

• Schumpeter, J. A.: 1943, Capitalism, Socialism and Democracy, Routedges 2010,
• Fred L. Smith Jr., Countering the Assault on Capitalism, Economic Affairs, 32.1.