What TikToK Saga Has Taught Us About The Erosion of Market Capitalism in America
We are heading in the wrong direction
America has long positioned itself as a global ambassador for democracy and capitalism, promoting these systems diplomatically and militarily worldwide. The promise was simple yet powerful: a free market economy coupled with democratic institutions would create equal opportunities for all, allowing anyone with determination to succeed through their efforts.
The reality, however, has diverged significantly from this ideal. While economists like Milton Friedman championed free markets and argued that companies should focus solely on maximizing shareholder value within legal boundaries, today's market dynamics reveal a concerning departure from true capitalist principles.
Two fundamental problems have emerged that undermine the core tenets of capitalism:
First, regulatory frameworks are increasingly applied unequally, creating an uneven playing field where certain players receive preferential treatment.
Second, we're witnessing the systematic modification of market rules to benefit some players at the expense of potential competitors.
These distortions strike at the heart of capitalism's promise. In a genuine capitalist system, markets should remain open to new entrants who can challenge incumbents through innovation and better solutions to customer needs. When customers are underserved, capitalism should enable new companies to enter and fill those gaps.
Elon and Zuckerburg
The actions of modern tech superstars like Elon Musk and Mark Zuckerberg highlight this problem with stark clarity. While anti-competitive behavior and cronyism aren't new to American capitalism, their brazen approach to market manipulation represents a concerning escalation. This raises a crucial question: What hope remains for new entrepreneurs to compete and succeed in a system where rules can be bent or rewritten to favor established players?
TikTok Saga
The recent TikTok saga perfectly exemplifies this dynamic of power and patronage. The platform's temporary blackout and subsequent restoration, credited to presidential intervention, reveal a troubling pattern: the same authority that initiated its removal now receives praise for its return. This cycle of threat and rescue demonstrates how modern success increasingly depends not on innovation or market forces but on political allegiance.
Today's version of capitalism has evolved into a system where conforming to power structures often matters more than creating value for customers. The promise of free market competition has given way to a reality in which political relationships and regulatory favoritism frequently determine winners and losers.
The Irony
As U.S. continues to advocate for global capitalism, it moves further from the principles it champions. This isn't just about abstract economic theory—it's about whether the American dream of entrepreneurial success remains viable in an increasingly rigged system.
Interesting read Dr. Abdullah, do you believe that political forces manipulating markets to increase barriers to entry is a global issue? If so, what strategies can be implemented to reduce such influences? Especially in countries where a small number of the general population control most industries
It is ironic. I will say that even in Texas it was not as easy as people think to open a business. We had to get the health department certified, ensure proper zoning, have a grease trap plan (for a cookie shop by the way), maintain certified labor requirements... the list went on and on. Thatvwas in Texas. I know someone trying to open a bakery in California and they have been dealing with it for 3 years. My wife constantly gets told she should open a bakery (like on Thursday this week), but we know the high quality product is not the only thing to consider. We will never have a customer facing business again due to the litany of odd and subjective things local governments do. This was a simple business to provide a place for my wife's baking talent. Not something like a redundancy reduction business or advancement in medical care. How many more talented people are simply doing things for themselves rather than advancing the market. Incentives matter.