Security firm G4S's failure to honor its Olympics contract shows just how silly and deficient crony-capitalism really is.
G4S were originally drafted by the government to provide security personnel on $444 million-worth of a contract, 10 times inflated from the original price. Of course the astonishing incompetence of this firm was revealed when it transpired that they were unable to recruit the necessary number of security guards needed to fulfil their contract. At a time of mass unemployment. This of course has forced the army and the police to stretch their already overburdened resources to fill the gap. Meanwhile, despite their failure, G4S get to keep $89 million as a "management fee."
The greatest weakness of the right and the left is their mutual inability to distinguish the difference between capitalism and crony-capitalism. On the right, there is a fallacious preference for the so-called "free market," defined as using taxpayer money to outsource labor to sub-standard companies that would have never survived in an actual free market. Thatcher fell into this trap, the trap of having an "aura" of support for free markets while holding on with the kind of iron fist that would have made Mussolini proud.
Meanwhile, on the left, where acts of capitalism are deemed immoral and borderline anti-social, the malarkey of G4S has been derided as "market failure" and the "failure of capitalism."
One should recognize that free enterprise and state services are as different as chalk and cheese. It may be argued that chalk and cheese are useful in their own individual spheres, but mixing them tends to self detonate the useful aspects of both. A chalk-cheese hybrid can be neither eaten nor used to do algebra on a blackboard. So it is when Tories allow "private-sector" contract companies to latch on to taxpayer money while missing the whole point of how the market actually works.
As a whole, it could be very persuasively argued that the Olympics itself is nothing but a giant exercise in crony capitalism. On the one hand, politicians and ministers are in charge of managing it. Nations compete to host it. Its completion is undertaken with the kind of hype, jingoism and bureaucratic inefficiency that only government can bring to any project.
Meanwhile, certain mega-corporations are hand-picked by politicians to make up some of the lost taxpayer revenue from the whole affair (and make no mistake, it is a loss). These are usually the mega corporations like Samsung, Coca Cola, McDonald's, Cadbury's. The usual.
In fact, the government have gone to such an extent to protect their cronies they even passed legislation banning the display of small business ads in shop windows and public spaces. Selling piano lessons or history grinds? No public boards for you! With all the extra traffic, one might have an unfair advantage!
Does that sound like a free market to you? Does that sound like the kind of level playing field where a plucky entrepreneur with the right ideas can start and grow a business from the ground up?
The Olympics would not exist in a free market. It would be just too much of a liability. That's not to say there wouldn't be major sporting events, perhaps far outstripping the Olympics if allowed. It's just they would be better run, cheaper and more profitable. In other words, they would add to the economy, and provide gainful rather than parasitic jobs.
As much as it pains me to say, if you have chalk and cheese before you, just pick one. Either go for the whole statist hog, bring in the bureaucrats, bring in the army, bring in the whole silly pack of government hyenas to conjure up your little fuzzy feeling of national pride ... otherwise stay out of sport altogether.
I know which one I would prefer. The same could be said for other areas which are subject to cronyism, such as health care. Either have your totalitarian single-payer NHS, or you have total laissez-faire. When you start getting into state contracting, protectionism and fixing up the insurance industry, the distortions happen which only makes everything worse.
Mixing capitalism and statism is like like eating chalk on crackers. You can have one or the other, but you can't have both. I highly recommend the other.
This post originally appeared on barry-lyndon.com