It is fashionable in academia . . . that is, among people who have never run a business, or at least not a large-scale business – to decry capitalism as the root of all evils, and to suggest that worker-owned communes would solve all the problems of the world.
Well, there’s a wee problem. Even socialists must make decisions about capital allocation; somebody has got to be the capitalist. Consider this story about IBM, which is abandoning its chip-making facilities and paying $500 million per year, for the next three years, to Globalfoundries to produce the next generation of 14 nm chips. Globalfoundries will be spending about $10 billion to build the new chip fabs. If a company as big as IBM needs help to create a chip fab facility, is this something which a worker commune wants to take on?
Somebody has to decide how to allocate capital. Chip fabs don’t build themselves; neither do steel mills, auto plants, or any of a host of other large-scale enterprises needed to make the stuff that makes the stuff that makes the stuff which we consume. These decisions are best informed by market prices, not by diktats, not by squabbling among workers’ collectives. They are best driven by profit, not by politics.
There are many failures of Western crony capitalism indeed – wherever politics has inserted itself. A small example would be Chiquita, which mulcted a $20 million incentive package from Charlotte, NC, and a few years later, is moving on to some other locality. A larger example would be the entire Military Industrial Complex, which enriches war profiteers at the expense of taxpayers, while encouraging endless vast, expensive, and murderous wars in the Middle East.
We need to kick the politics out; take out the cronyism; let the consumers be the main drivers.