Capitalism and the State

Three news items in yesterday’s paper bring to mind the ever-present question of the relationship of capitalism to the state.

One is the decision of the U.S. Department of Justice, in line with the Biden Administration’s concern for the concentration of market power in fewer and fewer hands, to prevent Penguin Random House from buying Simon & Schuster publishers.  The resulting merged company would have unprecedented control and outsized influence on what books would be published and how much authors would get paid for their works.

The market power of such a merged company would limit the ability of authors to get books published and bargain for their share of sales revenue.  The limitation of competition could also bring about censorship of works which the publishing staff did not like and so limit public understandings and discussions.

Of course, with the advent of new technologies for self-publishing on Amazon and the use of social media to promote books, there still is some room for authors disfavored by a major house to sell their books.  But self-publishing is a lonely enterprise, with no marketing support to attract buyers or place printed books in bookstores.

Secondly, the Dow index closed at over 36,000 for the first time.

Now, please ask yourself if that could have happened without governments creating trillions of dollars of liquidity in the global economy in recent years.

Thirdly, Yahoo is pulling out of China, leaving a huge market and customers, foregoing profits because of obstacles in serving customers created by the Chinese Communist Party and its government with policies and laws regulating social media.  Microsoft’s LinkedIn had previously ceased business operations in China.