Jun

11

 I have been considering the many symbiotic relationships that exist between capitalist enterprises and the welfare state. A common theme of many of these relationships is that their foundation is in encouraging consumers to pull their time preferences as far forward as possible, which of course creates room for others to capture as much of that person's income (from whatever source, including government subsidy) as possible.

What is interesting is that when this is done, it seems to create an entire mini-economy that in my mind represents a distortion. I say distortion because the ill effects are often subsidized, which further fuels the mini-economy's growth and turns off the self-correcting mechanism.

For example, we know that eating large quantities of junk food and processed food is bad for health. The consumer is satisfying a short term desire at the expense of long term health, which I consider a form of time preference shifting. And of course this is heavily encouraged by the system, to the extent that the a large % of the population considers a very unhealthy diet to be normal. This has become so normalized that many do not see why they are so fat, because everything they have known tells them that their choices are normal.

This creates health problems and obesity. What do you know? The treatment of all of these largely self-inflicted illnesses is a huge business. Now if costs for these diseases were borne by individual consumers in some way, the system would not become "supercharged" because there would be a self-correcting mechanism– the ability to pay for treatment.

However, with the shifting of medical bills to the state or to various insurance schemes that do not allow for risk-based pooling of similar risks, the system does become supercharged. The medical system can treat the self-inflicted medical problems at great cost, indeed that cost to the "system" is often privatized and converted into various profit streams. The self-correcting mechanism is now gone and has been replaced by an incentive to perpetuate the system, and even enhance it.

Every step of the way the unthinking person is pushed through the system and as a result feeds the system. For example, there is a massive interest in promoting large portion sizes. It is a business that wants to increase sales. Cereal bowls are 2X what they used to be but most people hardly notice, etc. Middle income shoppers feel size = value so portions have been super-sized.

The smart people continue to make real choices, but if you look around it is clear that many people don't actively make choices, they just respond to the environment and what is in front of them uncritically. When they develop medical problems the costs are then distributed and the profit is targeted.

At the extreme, the system seems to be creating an entire class of citizens who basically have zero control over their lives. They are steered the great majority of the time for the benefit of other people's profit, with zero awareness of this fact. It is an odd system. Since it will not be changing any time soon and indeed appears to be durable, the best thing for ones well being might be to accept it and profit from it, without undue moralizing. It could be that crony capitalism is not the distortion of capitalism that libertarians think it is, but is in fact the real capitalism– the version that has staying power vs. the one that is just transitory and dependent upon a liberty minded population.


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search