Three Faces of American Capitalism: Buffett, Musk, and Trump

[Uncle Joe]

As the Sage of Omaha announces his retirement, the Trump family’s crypto ventures and Musk’s DOGE cuts illuminate darker aspects of the system.

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This contradiction illuminates the limits of using a century-old framework to interpret a new Gilded Age economy, in which industry, finance, and the government are so intertwined that it’s sometimes difficult to discern their boundaries. And yet there is still something powerful about Veblen’s taxonomy. When pecuniary capitalism comes to predominate, he pointed out in another book, “The Theory of Business Enterprise,” values such as “a sense of equity, fair dealing, and workmanlike integrity” get cast aside in favor of anything that facilitates quick scores. “This code of business ethics consists, after all, of mitigations of the maxim, Caveat emptor,” Veblen noted.

The maxim “buyer beware” certainly applies to some of the latest Trump-family crypto schemes, which have included partnering in World Liberty Financial, a new firm that fashions itself as an all-purpose crypto company, and issuing their own cryptocurrency, the $Trump meme coin, whose market value has gyrated wildly. But, to fully comprehend the Trump 2.0 business model, you have to supplement the principle of caveat emptor with an understanding of how crony capitalism operates in the crypto age.

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Philanthropic giving by billionaires certainly won’t cure all the ills of capitalism, but it’s surely preferable to an alternative in which they hoard their vast riches and, at death, exploit lax tax laws to pass them on to their heirs largely intact. Buffett recognized this, and he has also displayed an appreciation uncommon among billionaires for how the vagaries of fortune have favored him. In a 2010 magazine article, he wrote:

My wealth has come from a combination of living in America, some lucky genes, and compound interest. Both my children and I won what I call the ovarian lottery. (For starters, the odds against my 1930 birth taking place in the U.S. were at least 30 to 1. My being male and white also removed huge obstacles that a majority of Americans then faced.) . . . . I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate’s distribution of long straws is wildly capricious.

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https://www.newyorker.com/news/the-financial-page/three-faces-of-american-capitalism-buffett-musk-and-trump