Has the goverment put its hands so deeply into the economic matters of the country that they have literally twisted rational economic calculations? This market disruption by the goverment has made men like Warren Buffett and Charlie Munger billionares. Even though these men talk about the estate tax like it was a good thing, that the income tax is nothing to cry about, that the federal reserve provides a fantastic monetary support system, that gold is literally (in their words) "useless", that trade barriers are great things, and finally that they are "happy to write uncle sam a check every year". These two individuals are the best investment duo of the last century and they are not anywhere near a free market philosophy!
The same can be said for Peter "economics is a waste" Lynch, Monish "Gold isn't good for anything but bracelets" Pabrai, or any other great investor. They are all either benefiting directly from the regulation structure in the country or are getting the new money created by the FED first and are therefor obtaining money at the expense of fixed incomers.
Has anyone else noticed this phenomenon? That most business men/ entreprenuers/ investors sound more like politicians than profit seekers?
People often think in the equation big_business = free_market / free enterprise.
Instead they have actually often a vested interest in high taxes and many regulations. Since this makes economic calculation and entry more difficult for new smaller competitors.
There may be other reasons as well.
Torsten:People often think in the equation big_business = free_market / free enterprise. Instead they have actually often a vested interest in high taxes and many regulations. Since this makes economic calculation and entry more difficult for new smaller competitors. There may be other reasons as well.
Torsten has hit a good note here. Big business benifits greatly from various forms of protectionism. Subsidies protect its profits and take away risk from investment. Tariffs allow them to compete in domestic markets they otherwise could not, without sacraficing large profit.
Many other policies also quell competition that would invariably arise on a free market. Licensing inhibits anyone from entering business without first a large sum of money to gain a license to do business in that market. Then over regulation makes the cost of doing business once the license is obtained so high that many smaller competitors who operate on the margin will have to drop out of the market. We could call these practices some form of backhanded monopoly.
Except of course, also investors are children of the educational system. I'm not familiar with the people being mentioned, but I estimate them below 60 or even 50. So they went through schools and universities, while lots of ideological changes went on within Western countries. Part of this was putting more onus on state activity and of course this went hand in hand with an anti-free-enterprise mentality. The entrepreneur being a synonym for the goal-achieving White male.
joecochran:Big business benifits greatly from various forms of protectionism. Subsidies protect its profits and take away risk from investment. Tariffs allow them to compete in domestic markets they otherwise could not, without sacraficing large profit.