Washington Times - RAHN: You lose, Soros wins

Washington Times - RAHN: You lose, Soros wins

This article is one of the best reasons to argue against Socialism/Communism.

The biggest advantage of SoCo (why refer to them separately?) is that its marketing is killer: equality for all, using the power of the State.

The biggest disadvantage of SoCo is it is merely a system for getting power and wealth to the biggest players. In the USSR, this was easy to watch and measure. Politburo members were dukes of their fiefdoms. The king, the Party Secretary, had no power without the consent of his Politburo/Privy Council.

As a business attorney, any small business needs to have a business plan. The best and most likely to create wealth for its owner are business plans that are based on "barriers to entry." This is a term of art that means that there is so technological, geographical, or -- most powerfully -- regulatory barrier to allowing competitors to enter the market. One local, highly successful, serial entrepreneur makes no bones about his preferred business plan: one that has high barriers to entry.

He likes radio stations, banks, etc. These two examples have severe requirements to get started. For radio stations, he need a broadcasting license from the FCC. Since these licenses control the number of stations in a market and the range of the signal (as measured by the broadcast signal's power), the FCC licenses are highly sought after.

For banks, to start a new bank, you need to comply with piles of paperwork and raise a lot of capital. In the current banking crisis, these needs become easier to understand the motivations: paperwork to prove investors' honesty, intended business practices, ability to manager crises, experience with money management; the capital to allow the bank to avoid accepting deposits and on the first rumor of bad news, facing a run on the bank.

These businesses have traditionally generated huge profits by limiting competition.

People like George Soros not only like barriers to entry, but strive to create them in more places. If you have a Politburo member in your pocket, you can make money by the truckload by keeping all other competitors out.

By pushing SoCo, Soros is able to prevent other players on his turf and claiming the moral high ground at the same time. He is able to claim the mantel of Robin Hood while truly being the evil Prince John, the usurper to the long crusading King Richard the Lion-Hearted.

Soros may not have created the crisis, but he benefits and thrives in this environment. It is in his best interest for the Bush Treasury to nationalize whatever it can, then get a committed Marxist elected president.

The secret of capitalism is competition and low barriers to entry. This creates both equalities of opportunity and of result. Most of the wealthiest men (and women) are in businesses with high barriers to entry. Consider that.