Yes, This is Real Capitalism

A common objection socialists get is that when they criticize capitalism—especially American capitalism, arguably the most ruthless of the capitalist-imperialist systems—is that they really criticize “crony capitalism”, “corporatism”, etc., with the idea being that “not real capitalism” has more government involvement in the economy than “real” capitalism. Generally, “real” capitalism is supposed to mean free-competition capitalism while “fake” capitalism is monopoly capitalism. Trying to support free-competition capitalism and not monopoly capitalism is idealist, for it ignores that monopoly capitalism is an inevitable development from “free market” capitalism.

Marx gave the theoretical explanation for why monopolies are inevitable in capitalism. He showed that capital tends to centralize in Chapter 25 of Volume I of Capital:

… [T]he progress of accumulation increases the material amenable to centralization, i.e., the individual capitals, whilst the expansion of capitalist production creates, on the one hand, the social want, and, on the other, the technical means necessary for those immense industrial undertakings which require a previous centralization of capital for their accomplishment. Today, therefore, the force of attraction, drawing together individual capitals, and the tendency to centralization are stronger than ever before. …

Centralization completes the work of accumulation by enabling industrial capitalists to extend the scale of their operations. Whether this latter result is the consequence of accumulation or centralization, whether centralization is accomplished by the violent method of annexation — when certain capitals become such preponderant centers of attraction for others that they shatter the individual cohesion of the latter and then draw the separate fragments to themselves — or whether the fusion of a number of capitals already formed or in process of formation takes place by the smoother process of organizing joint-stock companies — the economic effect remains the same. Everywhere the increased scale of industrial establishments is the starting point for a more comprehensive organisation of the collective work of many, for a wider development of their material motive forces — in other words, for the progressive transformation of isolated processes of production, carried on by customary methods, into processes of production socially combined and scientifically arranged. [Source]

Lenin noticed the concentration of capital back in the 20th century. He shows it in Chapter One of Imperialism: the Highest Stage of Capitalism:

The enormous growth of industry and the remarkably rapid concentration of production in ever-larger enterprises are one of the most characteristic features of capitalism. Modern production censuses give most complete and most exact data on this process. …

In another advanced country of modern capitalism, the United States of America, the growth of the concentration of production is still greater. Here statistics single out industry in the narrow sense of the word and classify enterprises according to the value of their annual output. In 1904 large-scale enterprises with an output valued at one million dollars and over, numbered 1,900 (out of 216,180, i.e., 0.9 per cent). These employed 1,400,000 workers (out of 5,500,000, i.e., 25.6 per cent) and the value of their output amounted to $5,600,000,000 (out of $14,800,000,000, i.e., 38 per cent). Five years later, in 1909, the corresponding figures were: 3,060 enterprises (out of 268,491, i.e., 1.1 per cent) employing 2,000,000 workers (out of 6,600,000, i.e., 30.5 per cent) with an output valued at $9,000,000,000 (out of $20,700,000,000, i.e., 43.8 per cent).

Almost half the total production of all the enterprises of the country was carried on by one-hundredth part of these enterprises! These 3,000 giant enterprises embrace 258 branches of industry. From this it can be seen that at a certain stage of its development concentration itself, as it were, leads straight to monopoly, for a score or so of giant enterprises can easily arrive at an agreement, and on the other hand, the hindrance to competition, the tendency towards monopoly, arises from the huge size of the enterprises. This transformation of competition into monopoly is one of the most important—if not the most important—phenomena of modern capitalist economy, and we must deal with it in greater detail. [Source]

This is why it is incorrect to say that modern capitalism is not “real” because of the oligopolies that exist in it. Those large enterprises are the consequence of “real” capitalism. Whether there is protectionism or free trade, high taxes or low, etc., fewer small business develop, and bigger businesses only accumulate more capital.

The people who call this “crony capitalism” then say that this capitalist economy has the state helping large capitalists, and real capitalism simply would not have that. This notion is childish, too. Every single capitalist country has needed the state to intervene in the economy to protect the bourgeoisie from extreme economic problems; even back during free-competition days, bourgeois governments have bailed out failing capitalist companies, saving their capitalists from failure. We saw what happened in the 2020 COVID-19 pandemic: while the government found it hard to give a few hundred dollars to working families, it was able to subsidize capitalists with billions.

From the first strikes workers waged, the capitalist class has used its state forces to suppress labor’s economic struggles, and it has legally banned workers’ political organizations as needed. Besides, even if the government did not get so involved in the economy, the big businesses themselves would be the causes of the many problems we see in society today; their extreme accumulation of capital relies on the extreme exploitation of labor no matter what, and no reforms in capitalism will change that. The wealth transfer of $3.8 trillion from the working people to the capitalist class in the US during the COVID-19 pandemic was due to capitalists’ exploitation of labor, not because of “crony capitalism”. The lack of healthcare, education, etc. in American capitalism is despite the government’s lack of involvement, so if anything causes the poor quality of life (compared to other imperialist countries) workers face here, it can’t be “crony capitalism”.

That is why we say that the only way to fix the flaws in capitalism is to overthrow the capitalist state, smashing it and the relations of production it maintains, and replacing them with the workers’ state and socialist production.