Capitalism is showing its flaws if we're paying a million dollars per job just to bring the job to our soil, although I suppose it's better then just keeping Foxconn products (or products that integrate their components) out at ports (or tariff them, like Russia with phones without a GLONASS chipset).
Some would argue that this is exactly the point of the phrase.
Undue influence of individuals with power (via money or other mechanisms) is hardly unique to capitalist systems. Every socialist country has had the exact same problems with corruption and misuse of power. It's also pretty trivial to argue that such corruptions and abuses are far far more toxic under socialism because there is no "pressure relief valve" in the form of competition. Socialism is predicated on a monopsony, and over time a market with a monopsony will likely result in monopolies on the sell side. You eventually end up with no alternative to the corrupt choices.
"Late stage capitalism" is a political term that was likely created by someone that considers themselves a temporarily embarrassed bolshevik central planner.
The outsourcing and automation and optimizing away of blue collar American jobs was already capitalism working as intended. Somehow, Trump and the Republicans have sold middle America a bill of goods and convinced them that globalism and capitalism are opposed to one another, when they are the same.
What's happening here is very much anti-capitalist.
I think you agree with the OP?
From a capitalist point of view, blue collar jobs lost in the US to outsourcing and automation deserved to be lost. The market optimized for a better solution for consumers, and that solution was cheaper labor and automation.
A true pro-capitalist party would admit that, rather than pander to coal miners and steel workers, and would try to make the US more competitive in the modern, global marketplace rather than try to drag the entire world back into the tar pit of American industrial dominance.
A true pro-capitalist party would even embrace socialist programs like nationalized healthcare and education, if that would make it easier for displaced workers to re-educate themselves and re-enter the workplace, and compete more readily with labor throughout the world, and take the burden of healthcare off of employers. Invest in infrastructure and technology. There's probably even a capitalist argument for basic income allowing the repeal of the minimum wage.
But "write as big a check as necessary and party like it's 1949" is just pandering, it's not even a serious attempt at a solution for anything.
While not optimizing for the externality that those consumers are also the labor that's displaced thus destroying their ability to consume and thus not not a better solution for consumers after all.
The market is not magic, it fails often and it's very annoying to continually hear people brush off those failures with the no true Scottsman fallacy. If capitalism means to you only a perfect free market then it's a meaningless term because no such thing exists and more importantly that ivory tower definition is not what people are referring to when they use the word, capitalism as implemented in the real world is what they're referring to and jumping in and claiming "that's not capitalism" adds nothing to the conversation.
So yes, that is capitalism, because this kind of thing is exactly what capitalists do: they curry for favors from government to get into protected positions to avoid competition. Capitalism is what capitalists do, and this is exactly the shit they do. Crony capitalism is still capitalism.
FTFY. The problem you describe is a human problem that will happen in any system, capitalist, socialist or mix of the two. Power corrupts, absolute power corrupts absolutely. Capitalism simply provides power in a normal distribution proportional to wealth. Socialism provides power in a power law distribution and the head of that distributions constitutes absolute power.
You say "pay me 20% of your 100k job" netting you 19k, I refuse to pay that steep of a fee and counter with "take 10% or nothing" netting you 9k.
I don't believe its fair to say that you have lost 10k if you accept my terms as the alternative is receive nothing. You have increased your revenue by 9 thousand dollars as opposed to earning 0 dollars. The option you proposed is simply not on the table and can't really be considered.
It really is a choice between three outcomes. (1) No factory is built, no taxes collected. (2) Factory is built, company pays full sticker price on the taxes. (1) is unappealing because nothing is created. So we arrive at (3), where the company understandably wants to renegotiate the sticker price on the taxes and the taxing body doesn't want to end up in scenario (1), so they come to an agreement somewhere in the middle.
Why is this translated into the company received cash from the taxing entity?
They are exactly equivalent to cash payments without the special tax treatment, so, yes, they are very much the same.
Before: 0 jobs, $0 taxes (factory doesn't exist)
After: 13,000 jobs, $100M taxes (down from $300M if no tax concessions were given, as per article)
The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walker's office said.
Also the $3B is the cost over a decade, not in a single year.
That does not make the incentives any difference than a cash payment in exchange for building the factory.
> The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walker's office said
The relationship between “would” and “could” in that sentence is quite important.
Sure it does. A state writing a check for, say $100 million dollars requires spending $100 million dollars (possibly borrowing it to do so). Giving $100 million dollars in tax reductions requires spending $0. The former may not be feasible, while the latter generally is, so the two are not equivalent.
That people can fail to see this may explain why these deals are politically popular, though.
Now, if you wanted to complain about companies taking the tax break and not following through, I'd agree with that.
Let's create another scenario. We are family members. Whatever I earn, I give you half.
Scenario A: I never get a job, you end up with $0.
Scenario B: I get a job, but only if you agree to take 25%, not 50%. I take the job paying me $100 and you get $25.
It's not cash out of anyone's pocket.
Being bled less isn't the same as receiving a blood donation.
That's a complicated question in the case of generally applicable changes in tax policy, like a new tax credit available to anyone who posts on internet discussion boards.
It's a simple, straightforward “yes” when the change in tax policy only applies to me, and only for a specific action (post on HN about the Foxconn factory deal, and get $5000 of your federal income tax.)
The latter is more like a government contract (but without the competitive aspects and other controls designed to assure fairness and public value.)