NSmolenskiFan on Nostr: Entrepreneurial capitalism has completely different social effects from crony ...
Entrepreneurial capitalism has completely different social effects from crony capitalism. Entrepreneurial capitalism rewards entrepreneurs for disrupting existing technologies, goods, and services—that is, for taking risks. By contrast, crony capitalism is when companies who have temporarily “won” in the market try to lock down their leading position by preventing others from competing with them. Crony capitalists hate risk and try to eliminate it wherever they can. There is a great book by Clayton Christensen called “The Innovator’s Dilemma” that goes into detail about how entrepreneurs can become crony capitalists.
Most of the industries where we’ve seen the kind of decline in quality and service you describe are industries where large companies have used the state—either through regulatory agencies or the legislature—to pass laws and regulations that make it easier for them to keep winning and harder for others to compete.
This is why it’s not just any capitalism that creates a rising tide that lifts all boats—it’s specifically entrepreneurial capitalism. Small government tends to be a friend of entrepreneurial capitalism but not of crony capitalism. This is a key distinction few make on the right or the left.
Most of the industries where we’ve seen the kind of decline in quality and service you describe are industries where large companies have used the state—either through regulatory agencies or the legislature—to pass laws and regulations that make it easier for them to keep winning and harder for others to compete.
This is why it’s not just any capitalism that creates a rising tide that lifts all boats—it’s specifically entrepreneurial capitalism. Small government tends to be a friend of entrepreneurial capitalism but not of crony capitalism. This is a key distinction few make on the right or the left.