One of the things that a great many people (especially socialists trying to argue against a capitalist and the empirical evidence that is micro-economics) get confused is the difference between Capitalism and Corporatism.
Put simply: Capitalism is the way the universe works. Newton put it thusly: For every action there is an equal and opposite reaction. Rand put it this way: You can’t have something for nothing. Simple example: A baseball can’t move through the air without someone/thing exerting force on it. Effort went in and you reap the result.
This applies to everything. Someone somewhere is paying the price for charity. Only in a society that you get out what you put in, where there is no such thing as a free ride will you see long term positive growth, and improvement of the standards of living. Futher only a capitalist society is sustainable because only a capitalist society demands that the reality of the universe be acknowledged and doesn’t expect something for nothing. Or worse, expect someone else to pay my bill. I’ve gone over why a society that sacrifices its best people is doomed many times, so if you’re interested, read some of my other blog posts.
Corporatism on the other hand is a direct result of socialism. Corrupt corporatism al-la Enron is the direct result of “the 3rd way”. Basically socialism feeds off of the producers in society. It is human nature to try and protect one’s self from those that steal from you. In the business world, any business that allows others to steal from them is doomed in a hurry, thus when faced with socialist governments taking what the businesses had earned something had to be done. Given that the people running the companies were innately very capitalist, the end result is understandable, if not acceptable. When you believe that the ends justify the means and that you can’t fight something such as socialism it becomes OK to give in and use the very tactics of socialism against the socialists that are stealing your money.
The end result is that someone somewhere along the line realized that minority groups that were being represented and marketed effectively were being phenomenally well rewarded by socialist governments for their efforts. Specifically the highly powerful lobby groups were able to harvest pork and other concessions from socialist governments like crazy. They simply played a game of “I’m more pathetic than you are” and as a result got what they wanted. (You can see this same thing in action on TV now with “Extreme Makeover: Home Edition” and the like.)
Now corporations couldn’t very well lobby based on the concept of being pathetic because it would come back against them in share valuations and share valuations are what CEOs get huge houses out of. So they TWISTED the game a little. They said “I want something. You want something (to be re-elected). I can get you that re-election because I have money. Now I want something in return.” Originally this was relatively harmless because the businesses just wanted loopholes in the draconian taxation system (try making over 1 million a year in Canada or the US, you pay > 75% income tax… makes it highly not worth it if you actually had to pay it because you could be a dentist and make more money after taxes.). Then someone got the bright idea…. “hey if those minority groups are doing so well at getting pork from the government, I bet we can do it too!” So instead of just tax cuts and loopholes they started trading re-election funds for all kinds of things.
Example: NASA. Each shuttle launch costs > $500,000,000.00. The shuttle is 30 years old. When it was originally designed it was meant to fly 100+ times a year at an average cost of $5 million per flight. And guess what? It could still easily be done for $5 million, except Boeing and Lockheed Martin get PORK. I mean awe-inspiring amounts of it. So instead of upgrading the shuttle fleet, which by any measure is about 25 years past retirement they have kept and are now run maybe 4 times a year costing > $2 billion. The only reason it costs so much? Pork to the businesses that pay for the senators on the NASA appropriations committee to be re-elected. What’s worse is that NASA just quietly announced that the next version of launch vehicle is going to be basically the same thing with a different skin on it thus continuing the PORK for the foreseeable future. This is socialism at its best. In a capitalist society the natural state is deflation. The cost of flights would be half what they were in the 70s now, and new launch vehicles would be coming out all of the time that were better, more efficient, safer, and a nicer ride into orbit. Corporatism ensures that this doesn’t happen.
Now the important part about corporatism: People see Blade Runner type scenarios and blame capitalism. The end result of corporatism is that businesses get more and more powerful and more and more above the law. They bribe and pay their way into having a different set of rules for them versus everyone else (i.e. the tobacco companies that are not only still in business but just got a huge reprieve and no one that hid the truth has ever gone to jail. If a normal person did anything even close to this, they would be put to death immediately.) (Yes, I know we don't call it a bribe, we call it campeign finance and we have John McCain trying to save us from it.. He's doomed to failure unless you actually change the system and get rid of the social programs... i.e. all of NASA is nothing more than a social program)
So yes, you’re right to fear a Blade Runner type world based on Corporatism. But make no mistake, Corporatism is an inevitable result of socialism. It has nothing to do with capitalism. In fact, the only way to defeat corporatism is to return to a capitalist society where there is no pork and there are no favours that can be done. Only when people get to keep what they earn and pay only for what they use does the threat of Blade Runner disappear… at least until the next time someone thinks that socialism is a good idea. (Just ask the Romans.)