>Regulation is the pretense which enables cronyism.
Sort of, if you narrowly define cronyism as government favoritism. But it would be more accurate to say that capitalism itself encourages cronyism---in the absence of regulation, there is no need to rope in government officials and so the cronyism stays in the private sector. But it is no less cronyism. The article misses the real problem, which is that the over-concentration of capital that develops naturally in unregulated capitalism starves the general population of economic opportunities that they would otherwise have if the capital were more decentralized. It's also corrosive to democracy, which depends on the assumption that people are more or less equally empowered politically, at least within a few orders of magnitude.
>the over-concentration of capital that develops naturally in unregulated capitalism...
In such an unregulated capitalism system the producer would only obtain wealth by freely trading. It is the state intervention which creates the conditions for the centralization of wealth.
We're living in a time where interest rates (set by appointed technocrats) don't keep pace with the rate of inflation. Inflation as it is originally defined means literally to inflate the money supply. Again, the money supply is determined by unelected appointees. These same experts form a "plunge protection team" determined to protect financial markets, at the expense of all other participants in the economy. So yeah, we're seeing a large amount of wealth inequality currently.
We could turn to the historical cases as well. Railroad monopolies and government bailouts of these essential industries owned and controlled by blue blood families.
What I have a hard time turning to and finding empirical evidence for, would be this mythical unregulated capitialist economy which produced so much of the the inequality critics of laissez-faire capitalism ceaselessly cite.
>In such an unregulated capitalism system the producer would only obtain wealth by freely trading. It is the state intervention which creates the conditions for the centralization of wealth.
No. You can concentrate massive amounts of wealth simply by freely trading. As you get wealthier, it gets easier to accumulate additional wealth. This is the essential feedback loop of capitalism. It's a feature, not a bug, and it is readily modeled (see, eg, https://www.wealthinequality.info/). But it causes significant social problems if left unchecked, as we are seeing today.
Not only is modeling ridiculous in the context of human action, the model itself is loaded. It only allows individuals to receive payments which are a fraction of their existing balance. Therefore, under this model individuals wouldn't be able to receive a paycheck greater than their bank balance. So much for the rhetoric of living "paycheck to paycheck".
>1. All people (or, in model-speak, “agents”) start with equal wealth.
2. For each transaction, choose two agents at random.
3. Calculate a percentage of the poorer agent’s wealth. This percentage will be the amount exchanged. (If they have the same wealth, it doesn’t matter which you choose. This will be the amount exchanged.)
4. Randomly choose which of the two agents will receive the exchanged wealth and which will lose it.
While inequality is a symptom of a dysfunctional financial system, equality isn't a good unto itself. Systems which institutionalize inequality through cronyism are the problem. Not surprisingly, these half-baked economic models are used to double down on interventionism, resulting in further cronyism.
Sort of, if you narrowly define cronyism as government favoritism. But it would be more accurate to say that capitalism itself encourages cronyism---in the absence of regulation, there is no need to rope in government officials and so the cronyism stays in the private sector. But it is no less cronyism. The article misses the real problem, which is that the over-concentration of capital that develops naturally in unregulated capitalism starves the general population of economic opportunities that they would otherwise have if the capital were more decentralized. It's also corrosive to democracy, which depends on the assumption that people are more or less equally empowered politically, at least within a few orders of magnitude.