Wednesday, April 27, 2016

State Capitalism Is 
The Enemy Of Real Free Markets
"State capitalism is very different from real, tooth in claw free market capitalism: it involves public bodies that dress up as private sector actors but which, at the end of the day, maintain a core public sector mindset, or private firms that begin to rely and depend so much on the government for their success that they forget what real competition and markets look like. Other members of this 'third sector' hybrid include sovereign wealth funds, as well as a bevy of semi-private companies that are in fact controlled or heavily influenced by politicians. Increasingly, central banks also qualify: they are also becoming more active in capital markets, snapping up corporate bonds (and not just government IOUs) as part of quantitative easing and thus directly subsidizing some businesses .. Investors and the public should beware state capitalism. It’s not the real thing, it doesn’t work and it is a recipe for capital destruction."
- Allister Heath, The Telegraph
LINK HERE to the article
[Cliff Note: This is part of our theme point. When the State (government) gets itself in the position of creating money from nothing, you no longer have capitalism & you no longer have free markets. It is like playing football, but the referees are disguised to appear to be impartial. They are actually members of one of the teams.]

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