STAKEHOLDERS OVER EFFICIENCY AND PROFITS? FAMOUS CEOs SEEM QUITE CONFUSED ABOUT THEIR JOBS.

So today, Forbes editors published a work by a guy named Steve Denning titled Salesforce CEO Slams 'The World's Dumbest Idea': Maximizing Shareholder Value. In the work, Denning commits the fallacy of appeal to authority many times first by quoting popular CEOs who have expressed their silly beliefs in public and then by citing an impractical, academician theorist.

The CEOs quoted who include Jack Welsh (ex-GE), Jack Ma (Alibaba), John Mackey (Whole Foods), Mark Zuckerberg (Facebook) and others who reveal themselves to be quite wrong precisely because they don't know what the word value means. Value is a ratio that expresses a rate of exchange.

When one of those things is cash or credit denominated in cash, all should know that ratio by another name. All should know it as price.

When Denning writes, "led firms to pursue the extraction of value, rather than the creation of value" it seems clear that Denning himself is confused about what what value means. In short, no one nor any firm can extract exchange. Exchange arises because each of two parties believes he is getting the better end of the deal.

Likewise, no individual by himself nor any firm by itself can create value. Value requires two parties as all trade does. Value arises from exchange.

The purpose of a firm is to survive to perpetuate trade. Firms survive by at least breaking even.

The entirety of trade, also known as commerce or buying and selling, ties up with two words — property and profit. Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade.

At less than break even, anyone would stop trying to produce property. No one works at a loss.

Though most think of property as things possessed, property always has meant the right of ownership and never the thing owned. Only when property gets created can trade arise between two persons.

The name for property put to making stuff is called capital. The name for property put to purchase and sale for cash and credit is wealth.

Profit is the name of sales at prices set by winning bidders less the outlay spent to acquire property for those sales. Profit signals potential return to increasing capitalization to gain efficiency and thus higher profit, lest competitors come to the party with better capitalization.

So in the end, CEOs must be stewards of their firms' capital, which is property put to making stuff, so they can consistently produce wealth, which is property at the moment of actual purchase and sale, to perpetuate trade in pursuit of profit.

Should profit arise, firms then can return shares of that profit to shareholders in the form of dividends, which is the only reason why investors hold stocks — for the income. Stocks represent ownership in the capital structure of any firm.

Speculators buy or sell stock either going long or short because speculators play on price movements of stocks. Far too many conflate speculators with investors.

All proper, positive action by individuals or representatives of individuals, such as corporations, is enlightened self-interest. Only by acting for oneself in recognition of doing right by others can anyone thrive in the long-run.

For-profit corporations don't exist for philanthropy or do-gooder meddling or any other sentimental foolery expressed by some CEOs. The clue to anyone who needs it is right there — for-profit.

As well, corporations don't exist for the false concept of "stakeholders". Corporations don't exist for employees nor citizens and especially not legislators and their agencies of government.

Corporations exist for producing property to trade in pursuit of profit on behalf of shareholders. Corporations exist to work for the same reason every individual works — producing property, which is work sold to an employer or customer in pursuit of profit, which is income less outlays.

I invite those seeking a better understanding of trade and business to start here WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE right here on Bizarro Theater.

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THE WEALTHY PEOPLE EFFECT AND WHAT IT TRULY SHOULD MEAN TO YOU

As their neoclassical school brethren, those of the Austrian school get reality as wrong as the Keynesians and Monetarists do. The latter wrongly believe one side of the coin, spending, leads to a better state of trade. The Austrians wrongly believe its the other side of the coin, savings (see Chris Casey's attempt to justify savings over at the Austrian mouthpiece in the USA, Mises.org).

Neither spending nor savings increases the state of trade. It's profit. 

Savings are illusory. It's profit that must arise. If profit lays idle, then trade stops.

Whether Austrians, Keynesians or Monetarists, the Neoclassicists get it wrong because economics is fake, a false knowledge. As I explained in WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE, like the Keynesians, the Austrians wrongly believe that the basis of trade, or what they call, "the economy" is scarcity and utility. 

Yet, the whole of what humans do, which is trade, can be summed up in two words, property and profit. 

The "wealth effect" is badly named. It should be said as the "wealthy people effect." The "wealthy people effect" also is known as "trickle-down" economics. 

The "wealthy people effect" is the belief that if street prices rise of extant property (right of ownership) that can be held as collateral, wealthy people will trade that property as wealth held in collateral letting them sell rights of action against themselves to buy bank credits in a purchase and sale. With these bank credits, these wealthy ones then will buy luxury goods (e.g., through HELOCs) or to expand business. In either case, it is believed that employment should rise either to produce more of these goods or to fulfill work in expanding business.

The idea of savings is rather silly. There is no such thing as savings. Beyond break-even, individuals and firms gain profit. In trade, there are only purchases and sales. Individuals for themselves or their firms through purchases and sales buy property in bank credits by selling cash, bank credits or debt, or buy property in other things by selling selling cash, bank credits or debt instruments.

Only through profit for workers (wages less living expenses) or firms (sales less outlays) can individuals and firms call for more goods. It is from confidence in expectation of profit that bankers enter into purchases and sales of bank credits for both cash and debt at discount. 

Back in 2010, then chairman of the Federal Reserve, Ben Bernanke said, "Higher equity prices will boost consumer wealth and help increase confidence, which can spur spending." Deciphering, Bernanke said, when stock prices rise, those who hold stock have collateral with increased liquidation prices, which instills confidence in bankers, who will sell bank credits to those seeking it with such collateral.

As I explained in YOU LIVE AT THE MERCY OF A CLOWN-CAR DRIVEN BY MEN AND WOMEN OF THE FEDERAL RESERVE, guys like Bernanke believe prices make people behave rather than increases in their buying power owing to increasing profits, whether by wages less living expenses for individuals or sales less outlays for firms.

Prices aren't wealth, whether rising or not. Only property which can be traded at the moment of trade is wealth. Once trade ceases, that which was traded no longer is wealth, but merely potential wealth. A used bicycle with flat tires and bent handle bars on offer at a garage sale no one buys isn't wealth, yet the seller has property in it.

The foolish believe the key lies in prices. For them, higher prices means worthier collateral. However, ever increasing prices leads to the profit squeeze, when at some point of ever rising prices, outlays outstrip sales and wages fail to rise with living expenses thus pushing people to below break-even loss. It is from then that collapse follows and debt reckoning begins.

Even the phrase "paradox of thrift" is badly named. Thrift means prosperity, not savings.

The word savings enters English in 1737 meaning "money saved," in turn from the Old French "save" meaning to "keep safe," which came into English around 1200. By 1300 save was being said to mean "keep possession, hold back." 

In the days of money, and money only ever can be coined metal by weight and fineness, some would sell their gold or silver to bankers in purchases and sales for shares of future profits of those bankers. The rhetoric around doing such became "Save your money with us," and "We'll keep your money safe with us."

Yet, nothing ever was saved. Bankers didn't keep anyone's money separated from all others in a warehouse, keeping anyone's money for safe. Instead, bankers lent money in which they had property, property acquired in purchases and sales of claims against profit, which gets called interest, for money.


The word thrift is a Middle English word from about 1300 meaning "thriving, prosperity" and comes from the Old Norse meaning the same.

In prosperity, anyone who wants to work can find work. Profit abounds. Wages increase faster than living expenses. Sales increase faster than outlays. The creation of property grows at an increasing rate.


Under false-belief faux prosperity, little creation of property of wealth happens. Instead, increases in the estimates of street prices for extant property of potential wealth swells false beliefs leading to credit inflation and speculative promotion (2002-2008 Residential Realty Bubble, 1997-2000 Dot Com Bubble) .

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BUT I SPENT 150 HOURS HANDCRAFTING THAT OIL ON CANVAS! OR THE LABORER'S SILLY THEORY OF VALUE.

The story shown in the picture below is typical of most who, though, constrained by reality, fail to see reality. Thus, they suffer. Their faces emote their anguish much like the old woman painted by the Dutch master, Rembrandt.

Though the story is touching, it's fallacy. The fallacy is Ricardo's labor causes value theory, which foolish socialists like Marx took up. The fallacy was put to bed more than 160 years ago.

Labor has nothing to do with prices. Prices get set by winning bidders. 

Take two people. One can spend one million dollars buying equipment and mining rights to mine for gold and after all that effort only find an ounce of gold. Another could find gold while walking spending exactly nothing. 

Is the ounce of gold worth a million because that is what the miner paid, what it cost him to get? No!

Right now, both the miner and the finder could get $1242.80 (as of 2014.Jan.30) for selling that ounce and that much alone. Why? The price gets set by winning bidders against all gold on offer for sale right now.

The miner put in time, effort, dedication, smarts, training, and much more. The finder put in nothing.

Or say someone has inherited purported fine-crafted gold jewelry from a dear lost relative and melted that jewelry down to support a meth habit, the gold in that jewelry would fetch at the same rate of all gold, $1242.80 an ounce. Once again, no outlay was made for that gold coming into the methhead's possession as property.

All prices adhere to the one and only true law of trade, the Law of Price — the winning bids of purchase and sale in the face of what is on offer sets the price. Prices get set by winning bidders who possess the means — these days legal tender cash or credit — in the face of what is on offer.

If no one bids for anything made, no matter how skillfully done, it's worthless. If bids are below cost, oh well. That is an signal that most everyone in a society of property deem the work worthless and a waste of resources. The artist should find other work.

Labor is the poor man's capital. The expression of skills through time, which is called work, is a product.  Labor is the outlay to turn something into property and nothing more. Only things of property can be bought and sold in purchase and sale for cash or credit.

Trade is predicated on property and profits and not effort and skill. Anyone must gain property, which is the right of ownership and never the thing owned, before enjoying or possessing a thing. If anyone fails to buy something to gain property in it, but instead takes it, that is called stealing. 

Anyone can buy stuff because that one has produced profit (earnings) in past and has been rewarded or others expect another shall produce profit in future, which we call confidence, and thus give credit to another. 

Profit arises because of property others want to possess under the constraint of the great Axiom of Profit —  the sum of sales must at least equal the cost of production, otherwise the producer goes to ruin. And of course, the sum of sales arises from the quantity of things sold times price. And price gets set by winning bidders of purchase and sale in the face of what is on offer.

So the whole trick of producing property in pursuit of profits is to produce what others want, to be in service to others. And that is what being in society of property is all about,  the only society in which strangers can live, even when government has grown to take control of that society and has distorted all relationships of man with man in society of property.

If labor were what caused price, then why can Apple earn a premium on iPhones relative to all other touch screen phones? Why aren't Apple execs accepting bids ( charging ) for what it cost them to get the phones made? 

If labor set prices because cost were to be the cause of price, then why does anyone go out of business? Labor has nothing to with price. Prices get set by winning bidders who must first gain property in something before they can use it.

No one works at a loss (Wages - Living Expenses or Sales - Outlay) unless politicians swoop in and subsidize that one with Section 8, SNAP and the like. When politicians give  workers welfare to subsidize their living, in effect, politicians subsidize firms that can pay wages precisely because of welfare given to workers (see: GREEDY CAPITALIST COMPLAINS ABOUT UNEMPLOYMENT INSURANCE EXPENSE AND QUITS HIS BUSINESS and Wile E. Coyote, Campground Businessman Super Genius).

Any worker gets paid to produce. His or her wage arises against the lack of willingness of another slightly better and smarter, who absent what she or he is doing, could bid lower than the worker being more efficient at living or could bid higher than the worker being able to produce more in any time span.

All the same, prices get set by those willing to cough up the cash or credit to buy. Sellers must accept those bids to get sales. Would-be sellers can refuse those bids and earn nothing. They can hold back inventory in hopes of future bidders bidding up prices.

People fail to appreciate the role of marketers and those in advertising who help to present products to those who most willingly can appreciate how a product can fit within their lives.

Marketers are quite like commodities speculators in the respect of pushing prices along to keep prices high enough so that manufacturers, be that automated or hand-crafted, can live to make another day, and yet against each other, low enough so that many can enjoy the fruits of others.

It's too bad that many perceive, wrongly, that marketers are "middlemen" who are little more than tricksters and knaves. Marketers keep people in business.

The successful stick to their knitting as it were and hire marketers to get them the best price possible. The reward for doing so is a share of the increase.

To savages, a Rembrandt likely would be worthless compared to spears. The savage wouldn't know he could sell the Rembrandt to someone who would esteem it and buy thousands of spears.

Yet, where art gets esteemed by others, it is the winning bidder who sets the price for a Rembrandt as nothing in trade ever can violate the Law of Price, the same as nothing can violate the Laws of Thermodynamics or the Law of Gravity. So even a one-off like a famous artwork sells, not because of purported scarcity, but because someone else has property (right of ownership) in it.

The price of a Rembrandt arises not because it is rare (scarce), but because of rivalry of bidders, only one of whom can win with the highest bid precisely because that one has the most cash or credit, which he is willing to sell in a purchase and sale, to buy a Rembrandt. 

Egghead Ph.D. academicians, who call themselves economists, long ago realized the error of Ricardo. Rightly, they came to see that labor is not the source of value (price). Yet, the next round of economists decided to commit their own fallacy and from which they base their entire myth of economics, that of scarcity and utility cause value (price). See my work WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE to discover in less than 3 minutes, why economics is bogus, a myth, a b.s. story.

Utility as a source of price (value) is quite false as it imbues into things intrinsic value. Scarcity as a source of price also is quite false. 

The earth is awash in water, but men are successful sellers of bottled water right next to giant lakes and rivers. Why can do they do so? Bottling creates property. 

Many would believe that a Rembrandt is worth much because he is dead and thus can not make any more. So any Rembrandt is a one-off. Yet, millions have watched and learn to paint from Bob Ross, each creating their own one-offs. Each one being unique makes each one scarce. Each Joe Blow also is a one-off. 

Yet, no one trawls garage sales bidding outrageous sums for the one-offs of the Joe Blows of our world. 

And so, because economists believe from false premises, their conclusions are false, necessarily so, even when remaining logically consistent from false premises to false conclusions. It doesn't matter if that neoclassical school is the Keynesian school or the Austrian school. 

There is no escaping reality. Anyone can only deny reality. 

Enjoy some Rembrandt!

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WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE.

FIRST, THE REAL

Trade, or Commerce, or Buying and Selling, or Real Economics, which is what I teach, is all relevant matters of mankind regarding the purchase and sale of property. Said another way, it's the theory of trading property for profit. 

The entirety of trade, or commerce, or real economics ties up with two words — property and profit. Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. 

At less than break even, anyone would stop trying to produce property. No one works at a loss.

In trade, or commerce, or real economics, there is but one law and one axiom, the Law of Prices and the Axiom of Profit. The Law of Prices holds the winning bids of purchase and sale in the face of what is on offer sets the price. The Axiom of Profit holds the sum of sales must at least equal the cost of production otherwise a producer goes to ruin.


Though most think of property as things possessed, property always has meant the right of ownership and never the thing owned. Only when property gets created, can trade arise between two persons. 

The name for property put to making stuff is called capital. The name for property put to purchase and sale for cash and credit is wealth. The name for property that can be sold to satisfy debts is asset. The name for property pledged against a debt is collateral.

Profit is the name of sales at prices set by winning bidders less the outlay spent to acquire property for those sales. Profit signals potential return to increasing capitalization to gain efficiency and thus higher profit, lest competitors come to the party with better capitalization.

Trade, or commerce, or real economics is about acquisition of rights to own stuff. No one can derive satisfaction until that one owns. All talk about pleasure, pain, satiation, utility and the like is irrelevant until acquisition.

A trade is a purchase and sale for cash or credit, which can be settled by cash. Today, because of the legal tender designation for cash, cash lets anyone settle contracts straightaway. 

Cash is printed, circulating bank credits. Cash consists of banknotes issued by a centralized authority. Cash represents deposits circulating in perpetuity. 

Anyone who possesses cash has bearer negotiability, also said as currency. Bearer negotiability means the right of ownership in a thing gets passed along with honest possession in every sale or every exchange. The property and the possession are inseparable.

Cash stands as a money substitute. Cash exists as a money substitute precisely because politicians have decreed legal tender status for cash. Gresham's Law reveals why cash has crowded out money.

Money is coined metal by weight and fineness. Each coin by weight gets a unique name called denomination.

Money does not exist anymore and hasn't for decades. In the days of money, money extinguished both cash and credit.

Today, Americans, Canadians, Australians, Europeans, Japanese, and all others have cash and token coins. Any token coin has denomination higher than the sum of street prices of the metals which constitute it.

In spite of shopworn fallacies, never was money "a medium of exchange" or "a store of value". Instruments of banking are the media of exchange. It is bankers who do the exchanging, today, buying cash and debt through discount and selling credit, transmuting property of lesser saleability into property with more saleability.


Without doubt, doing the work of money does not make something money. Credit does the work of money and no one would ever say credit is money.

Price is an objective ratio that expresses a rate of trade of an economic quantity for cash or credit denominated in cash. Value is an objective ratio of exchange in swap, which most know as barter. Price and value arise from the same concept, except one has cash as one economic quantity for another. Both are rates of trade, of exchange.

By objective, we mean that someone not a party to a trade can observe the swap. There isn't anything subjective about it. 

Prices get set by double auctions. In most job markets, inter-employer competition has employers engage in English auctions (highest bidder wins) for workers, while inter-worker competition has workers engage in Dutch auctions (lowest bidder wins) for jobs.

Where the winning bidders of employers and winning bidders of work seekers intersect, that is the clearing price, which, when it involves work, we call it a wage.

In credit-as-capital markets, inter-lender competition has lenders engage in Dutch auctions (lowest bidder wins) for borrowers, while inter-borrower competition has borrowers engage in English auctions (highest bidder wins) for jobs.

Where the winning bidders of lending and winning bidders of borrowing intersect, that is the clearing price, which, when it involves credit, we call it a interest.

Labor absent capital is living at bare subsistence. It is to capital that profit can arise owing to efficiency of surplus output. 

Both rent and interest to the capitalist are shares of profit paid in parts as a hedge against loss. 

Trade, or commerce, or real economics has correspondence with both practical and theoretical civil jurisprudence as well as accounting.

Occam's razor is on my side. 

AND NOW, THE FAKE

Academia economics is wrong, thoroughly wrong. Neo-classical economics is fraught with fallacy. It's a sham. It doesn't matter if it is preaching from the Austrian School or the Keynesian School. Being logically consistent against wrong premises still leads to wrong conclusions. 

Everyone who lives in the real world knows this. If academic economics were correct, the political policies based upon it wouldn't lead to banking, and credit crises and high unemployment.

Academicians preach a false dogma surrounding scarcity and utility (usefulness), often calling economics the science of scarcity. 

Academicians cite examples to justify their false beliefs. They say that though useful, air is abundant and thus can't be an economic good. They say that though useful, water is abundant and thus can't be an economic good. They say that in the desert though, where it is scarce, water becomes an economic good. 

Yet, anyone who puts air into cans turns abundant air into potential wealth and thus an economic good. Anyone who puts water into bottles, turns abundant water into potential wealth and thus an economic good, whether in a desert or in a big city surrounded by aquifers. Putting air into cans and water into bottles creates property. 

And what of monopoly patents, seemingly which are useful and scarce to have the right to be exclusive producer? Many firms buy monopoly patent not to produce, making such not useful, but to exclude competitors from doing the same. 

The firm which buys monopoly patents gains property in those patents and restricts trade by control of property. Such action reveals that property, or right of ownership, is what counts.

Thus, neither scarcity nor utility gives rise to economic goods. It's property. Until one gains property, one can't do anything, including experience satisfaction.

Since neo-classical economics is predicated on scarcity and utility rather than property, academia economics begins with false premises. Thus, all conclusions arising from the alleged faux science must be rejected as false.

Neoclassical clowns preach that value arises from utility. Value is not a quality, that is, it is not an aspect of a thing residing absolutely within it. Nor does value arise from utility, nor the cost of production, nor any other claimed intrinsic quality, nor scarcity.

It's a specious claim that utility stands as the cause of value. Holding that utility makes the cause of value forces the belief in intrinsic, absolute value owing to some quality inherent in a thing. While the qualities of a thing remain the same, such a thing can be useful during some times and yet not during others. 

Contemporary economists believe that the amount of utility derived from consumption of a good declines with each additional unit; and thus, a person maximizes his utility when he distributes his income among various goods so that he obtains the same amount of satisfaction from the last unit of each good.

The idea of marginal utility is the pseudo-scientific claim that one derives 100% satisfaction from the first unit of a thing and less than 100% satisfaction from each subsequent unit.  It is from the foregoing that economists claim what gives rise to value and hence prices.

Academia economists would have the world believe that if someone sold a house for $400,000 but only spent $300,000 from the proceeds and never touched the $100,000, then the buyer overspent by that $100,000 and the seller should have sold for only $300,000. Yet, never in the real world would find the seller years later sending back to the buyer $100,000.

Marginalism is a crock, bunk, hokum. Utility does not impute value. Marginalism is pseudo-scientific psychology. Academician economists have assumed marginal utility as true without any proof, taking it as axiom and have built sandcastles of mischievous theory upon it. 

The bogus concept of marginal utility deals with satisfaction, and specifically with satiation. Marginal utility is pseudo-science satiation psychology never proven through the scientific method in psychology much less for economics. Academicians enter the realm of conjectural, pseudo-scientific psychology when they attribute motives and cognitive processes to prices. 

Cournot was right when he said: 

"... accessory ideas of utility, scarcity, and suitability to the needs and enjoyments of mankind ... are variable and by nature indeterminate, and consequently ill suited for the foundation of a scientific theory." 

There can not be a "Law of Supply and Demand" because exceptions need elasticity to explain why such exceptions exist. A law of science governs the relation of phenomena, of all facts. If exception must be made, there can't be a law. 

Academicians preach the fallacy that producers sit on supply, offering up supply only through an imaginary supply schedule. They spin an alike bogus story about a demand schedule.

Yet, in the real world, inventory gets to the shelves once produced and gets put on offer. It's winning bidders who set the price, regardless of cost of production. If some producers sell at loss, those producers either get forced into efficiency, reducing costs or those producers must exit. Winning bidders must bid higher to gain the remaining inventory of sellers who can at least break even on costs. 

While guys like Paul Krugman might understand academic economics, be expert even, they do not get trade, or commerce, or buying and selling, or real economics, you know, the actual economics that exists from manifest phenomena of the real world.

Krugman's brand of academia economics is built on all of the fallacies of Adam Smith, David Ricardo, Thomas Malthus, J.S. Mill and Jeremy Bentham, while rejecting the few lucid thoughts those foregoing had. And then their brand doubles down with more jokers like Stanley Jevons, Leon Walras, Francis Edgeworth, Alfred Marshall, all of whom accepted pseudo-scientific psychology never proven and totally unneeded. Jevons was so crazy that he claimed that sun spot activity created the cycles from boom to bust, from depression to prosperity.

Inauthentic, false, academia economics continues the parade of errors by adding erroneous thought of Throstein Veblen, Irving Fisher, John Maynard Keynes, John Kenneth Galbraith, Paul Sameulson, Kenneth Arrow, Robert Solow and Robert Mundell.

Economic theory espoused by all of the major universities suffers from significant flaws, even though there are kernels of truth is some thought here and there. Like all academicians, academic economists join a priesthood, receiving Ph.Ds, and became anointed to sermon on academic economics. Every Ph.D conferred in economics has been given to someone who has learned a false doctrine.

Even the Nobel Prize in Economics is little more than back slapping to the guy or gal who can remain logically consistent with the illogical house of cards that is academic economics.

Academic economics exists to justify political action of one kind or another, which means action against individuals and their respective property. Scarcity and utility are chimera faux concepts to justify political action of confiscation of output and redistribution to those of favored groups. Those who parrot the false belief that economics has anything to do with scarcity and utility have accepted rhetoric and have become indoctrinated.

 Every law crafted from economic theories of academia is a bad law. Every law that interferes with profits and impairs someone's property is a bad law. 

Full Disclosure

I earned a degree in economics from what was once a highly selective university. All my profs who taught me their false doctrine earned their Ph.Ds from Harvard, Yale, UC Berkeley and the like. 

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For those seeking a slightly more formal treatise, enjoy The Theory Of Trading Property For Profit.

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TRY CRONY POLITICS, CRONY GOVERNANCE AND CRONY REGULATORY CAPTURE BECAUSE THERE IS NO SUCH THING AS CRONY CAPITALISM.

Capitalism means living by using products that yield goods during production to produce a surplus of another product and hoping to sell that surplus for a price such that the sum of sales exceeds the cost to gain those sales. Said another way, capitalism means living by using capital in pursuit of ongoing exchange of buying power.

Capitalists pursue profits through production surplus derived from efficiency, producing what others want.

All of trade, or commerce or authentic economics is governed by one true, great, infrangible law, the Law of Prices. The Law of Prices holds the winning bidders of purchase and sale in the face of what is on offer set the price. In every market, always, the winning bidders of demand set the price. The Law of Prices holds regardless of whether political intervention of subsidy or buying power transference exists or not.

All producers are held in check by the great Axiom of Profit. The sum of sales must at least equal the cost of production, otherwise a producer goes to ruin. Those sum of sales derive from the prices set by winning bidders.

If politicians subsidize producers, politicians let inefficient producers operate, producers who would otherwise go to ruin at the prices set by winning bidders.

If politicians give economic quantities of purchasing to buyers, prices get buttressed higher than otherwise would be. That either yields unearned profits for producers or pushes prices high enough for inefficient producers to break even.

Crony Politics determine whether or not unearned profits can get gained or whether a producer can stay in production, inefficiently producing what not enough winning bidders would be willing to pay to acquire absent intervention.

There is no such thing as Crony Capitalism. It is always Crony Politics, Crony Governance and Crony Regulatory Capture rather than “crony capitalism”, which not only does not exist but never could exist.

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