While catching up on my reading over the New Year’s weekend, I stumbled upon this gem via Cafe Hayek:
Adding yet more interventions and taxes which discourage the formation of new fortunes will simply provide additional opportunities for the current elite to avoid the ‘creative destruction’ characteristic of unfettered market competition.
One of my main disagreements with the OWS movement is their general assertion that greater regulation and onerous taxation will unseat the current financial and political elite. Pennington is absolutely correct in recognizing that any increase in regulation and taxation brought about by the OWS movement will likely fall victim to the same rent seeking that created the mess we are currently in.
There is no doubt that our current system is corrupt and broken. A culture of privatized gains and socialized losses continues to pervade our entire financial system. Giants like GE use their lobbying pull to avoid paying a single penny in corporate income tax, even as the regulatory burden for startups and small businesses becomes worse every year.
There is nothing the current elite fears more than the ability of creative destruction to wreak havoc on their political and economic power. Only by removing the barriers America’s entrepreneurs face in the “formation of new fortunes” can we hope to bring about true change to the system we are all so dissatisfied with.