What is Political Capitalism?

A week ago, I wrote a response to a Marginal Revolution post about "political capitalism". I wrote:

"Political capitalism" is yet another far-right think tank spawned pile of crap. Every few years, the right needs new, less boring clubs with which to beat their opponents. We've seen a number of them in the past: trickle down, Laffer curve, etc. Austrianism is required to believe in this one, according to the author.

You need only look at the biography of the author to see just how pathetic this is. His PhD was under Murray Rothbard at the now-defunct International College in Los Angeles, and pretty much all of his work has been based on Austrianism.

The author, Rob Bradley, responded.

Sorry to see that one participant has turned the discussion into argument against the person.

Two comments: One, a review of my dissertation, published as Oil, Gas, and Government: The U.S. Experience, was published in the Southern Economic Journal by Tyler Cowen.

Two, a major endorsement of my "political capitalism" theme comes from Gabriel Kolko, a New Left historian out of the Marxist tradition, who stated on the back cover of my new book, Capitalism at Work: "Fascinating, comprehensive ... far surpassing my own history of political capitalism done in the 1960s."

I tried to respond again, but my post was supposedly filtered for too many links (no other responses appeared.)

So rather than waste my efforts, I'll post here so that I have them for reference....



Bradley criticizes me for "argument against the person", and defends himself with appeal to authority.

Take a look at Tyler's review of his published thesis which is as fine an example of damning with faint praise as I've ever seen.

Yet another review says "it is ironic that the main criticism one can direct against him relates to his ideological a priori attachment to the belief that any form of government intervention in the market economy must always and everywhere be pernicious and counterproductive."

If you check the Gabriel Kolko wikipedia page, it points out that "political capitalism" is a term Kolko used for corporatism, but hardly anybody else adopted it in the subsequent 40+ years. There isn't even a wikipedia page for "political capitalism", nor does it redirect to corporatism.

Yet he totally ignores my first paragraph where I point out that two other giant negatives for his credibility: that he is a tool of the right wing think tanks, and that he relies on Austrian economics.

A little reading of his introduction tells the full story. Shorter Rob Bradley: "Enron and Ken Lay failed because they were victims of a mixed economy even though every other corporation that fails or succeeds is in a mixed economy. Fairytale pure capitalism, as fantasized by Ayn Rand, would be free of these problems."

Comic quotations:

"Adam Smith, Samuel Smiles, and Ayn Rand elucidated the character traits, mental models, and interpersonal conditions behind success and failure, while differentiating sharply between free-market entrepreneurship and political rent-seeking."
Right. Female industrialists swooning before the economic might of mighty male industrialists, as in Atlas Shrugged.

"In the twentieth century (chapter 3), the philosophy of Objectivism, formulated by Ayn Rand, explains how Enron’s financial bankruptcy was at root a philosophic one."
Shorter Rob Bradley: It's only because Ken Lay was not an Objectivist cultist, unlike every successful CEO.

"Smith, Smiles, and Rand did much to frame what can be called heroic capitalism"
Most of us outgrow moralistic stories of heroes by the end of our teens. And Smith was much more sensible than Smiles or Rand: he showed good and bad in capitalism. Not simple heroism.

"But why did inferior thinking in the social sciences and humanities prevail? [...] The answer is the by now familiar one: arrogance."
Ah, the classic crank explanation for why everybody else is wrong, and he's right. How humble of him to proclaim that they're arrogant, every one!

There are so many stupid things in this introduction that it beggars description. Essentially, he wordily describes the Enron/Lay problems as hubris, but attributes the hubris to the mixed economy. Sorry, jack, but hubris doesn't need mixed economy to occur.

He also declares that he worked at Enron (and for Lay) for years. That's honest, but it sure points out that he has an incentive to find somebody else to blame. Was he the one point of light at Enron who wasn't suffering from the moral flaws that brought Enron and Lay down? Somehow, I doubt it.

I guess I'll finish by quoting my Libertarianism in One Lesson and Libertarianism in One Lesson; The Second Lesson, because Rob Bradley embodies these caricatures:

Government is the Great Satan. All Evil comes from Government, and all Good from the Market, according to the Ayatollah Rand.

Require perfection as the only applicable standard to judge government: libertarianism, being imaginary, cannot be fairly judged to have flaws.

Government causes pollution, crime, discrimination, slavery, poverty, and all the other evils of the world. Businesses and individuals only produce wealth: they are not involved and not responsible for any of those problems.

There are no market failures, only government failures. Which is why we should abolish corporations, patents, copyright and other intellectual property; they are established by government interference with free markets.