Articles Posted in Mitt Romney

Oligarchy and Its Discontents-What Money Buys

By R Tamara de Silva

August 20, 2012


            “The optimist thinks this is the best of all possible worlds. The      pessimist fears it is true.”

                                                J. Robert Oppenheimer



Last week it was announced that the United States Department of Justice and the Securities and Exchange Commission would not seek any criminal charges against Goldman Sachs or for that matter the executives of MF Global including its CEO,
former United States Senator Jon Corzine.
This likely surprised many people who still read the news, but actually infuriated no more than three people among them… and they were probably on the verge of becoming unhinged anyway.  Most people realize that while economists look for optimized states whose existence is perfectly beyond dispute within their own models…optimized models of the actual economy and democracy for that matter, exist only in the Great Books…
and many other books.  In point of fact, the discontents of oligarchy are numerous.  While economists may not spend much time successfully modeling the real world-perhaps in part because there are no repercussions for their being in error, catastrophic events happen in the real world and are not modeled or anticipated by any economist.   Recent events like the decision to give Jon Corzine and MF Global a pass are legitimate examples of the role of money in politics and in the law. 

       Henry Adams sort of foresaw the events of last week.  Henry Adams had a privileged perch from which to view the dilemmas of American democracy as he was the great grandson of the second American President John Adams and grandson of our sixth President, John Quincy Adams.  There are certain scathing critiques of politics that have always attracted me to Henry Adams-in the same way I was drawn as child to the diatribes of Cato the Elder.  For example, he regularly wrote about the mortal danger to American democracy manifested by the role of money,
especially corporate influence and how its tendency to corrupt the political system, would be the country’s ultimate undoing.  In writing about the corruption of the Erie Railroad for the
Westminster Review in 1870, he described corporate influence growing to the point of being unchecked,


          “swaying power such as has never in the world’s history been trusted in the hands of mere private citizens,…after having created a system of quiet but irresistible corruption-will ultimately succeed in directing government itself. Under the American form of society, there is now no authority capable of effective resistance.”


       He was also disturbed by the party system of politics in America and saw it to be willing to sacrifice principle for accommodation.   This theme comes out in his book, Democracy.  In Democracy the idealistic and hyper-principled heroine, Madeleine Lee is courted by the far more practical and ambitious Senator Silas P.
Ratcliffe.  Madeleine decides not to marry Ratcliffe though it seems that he gets the better of her in almost all their arguments about politics.
Ratcliffe has aspirations to the White House and argues that moral authority comes from his political party the party with which he will on principle never disagree, “that great results can only be accomplished by great parties, I have uniformly yielded my own personal opinions where they have failed to obtain general assent.”  

       Many of the books exchanges between Madeleine and Ratcliffe find Madeleine losing the argument.  She prefers to remain single and reject Ratcliffe and Washington at the end of the novel as she is determined to return to her philanthropic works saying, “The bitterest part of this horrid story…is that nine out of ten of our countrymen would say I had made a mistake.”  And they still would.   I confess I see myself in Madeleine but one who must stay, without leaving, just out of an insatiable curiosity to observe all that will happen.


Citizens United v. FEC and the Judiciary

       Money has always played a role in politics.
Any discussion of the role of money in politics, judicial elections or law enforcement in 2012 has to consider the United States Supreme Court’s January 2010 decision in
Citizens United v Federal Election Commission in which the Court ruled that political spending is a form of protected speech under the First Amendment.  Citizens United allows corporations and unions to spend money to support or denounce candidates in elections through ads.  This is a titan of a case, perhaps unrivalled in its potential to alter the face of representative government in the United States because of the way that most people who vote decide on a candidate-they watch or listen to broadcast media advertisements.   However, Citizens United did not alter much of the McCain-Feingold campaign law, which still regulates corporate donations to political parties and candidates.  Nor does the case affect political action committees or PACs, which can contribute directly to candidates.

       Perhaps the greatest impact of the Citizens United decision will be in the election of state judges.  Judicial independence at one time meant independence from the Crown.  Since then the term judicial independence has come to mean the expectation (however well grounded or not) that when dealing with the justice system, a person can expect a member of the judiciary free from the appearance of personal, monetary or political bias in the outcome of the case.  This mirrors the all important principle stated in Article 40 of the Magna Carta, “To no one will we sell, to one will we refuse or delay right of justice.”    

       More money spent on judicial elections, it is feared, will give rise to the impression that justice is for sale very much reminiscent of John Grisham’s book, “The Appeal,” wherein a billionaire CEO buys himself a state supreme court justice who rules in favor of his company on an appeal.  Grisham’s book is eerily like the true story of Supreme Court of West Virginia Justice Brent Benjamin who ruled in favor of the $3,000,000 campaign donor, Don Blankenship,
the CEO of A.T. Massey Coal in a case involving a $50,000,000 verdict.  The United States Supreme Court ruled that Justice Benjamin ought to have recused himself in the case
Caperton v.

       There is however one place where Citizens United may have a salutary effect on the judicial system.  In Chicago’s Cook County,
Illinois the slating of judges is militantly political and based not on merit per se but on a candidate’s payment of $25,000 to one of the members of the Judicial Slating Committee of the Cook County Democratic Party.  Judges that are slated, almost invariably win. 
Citizens United cannot but have a salutary effect here because it is difficult to imagine a worse system for picking judges anywhere.


The Imperial Presidency and Money

       James Madison was a staunch advocate for the separation of powers between all three branches of government.  The authors of a recent book, “The Executive Unbound: After the Madisonian Republic,” by sitting Seventh Circuit Court of Appeals Judge Richard Posner and an Adrian Vermeule from Harvard Law argue that the separation of powers is a relic of the past and largely beside the point.  Without getting into questions of judicial activism and the phenomenon of hyper-opinionated sitting justices, they are actually right from an anthropological perspective.
They are right in so far that the Executive Branch has become, with the passage of the Administrative Procedure Act and sweeping acts of legislation such as Dodd-Frank and now the Patient Protection and Affordable Care Act, the most powerful branch of government.  The Executive has created so many branches, departments and agencies under its purview, most with rule-making ability-that its power has become tantamount to that of an imperial monarchy.

Justice Posner because he seems only to view the world through the lense of a relentlessly pragmatic cost-benefit, economic analysis, draws at times predictable but disturbingly simplistic conclusions.   In their book, Justice Posner and Dr. Vermeule acknowledge the relative impotence of the other branches to keep up with or check the Executive and go on to assert that this does not much matter because Presidents are checked by elections, “liberal legalism’s essential failing is that it overestimates the need for the separation of powers and even the rule of law.”  

       In other words, just because Presidents are above the law, it does not matter because they will be checked by the rule of politics-they will be voted out.  This is startling simplistic and weak logic because it assumes an efficient marketplace, with equal participants and perfectly symmetrical information.
It also allows for the interpretation of the Constitution based upon a pragmatic economic analysis completely at  war with the absolute first principles and “inalienable rights” held sacred by the Founding Fathers and all the state legislators that ratified the Constitution. 

            This is also where money comes in.

       In his run for President in 2008, President Obama spend over $730 million and is expected by Reuters to raise $1 billion for 2012.  Spending for the 2012 election for all parties and candidates could, according to one estimate, top $9.8 billion in large part because of spending by super PACs.
Yet almost 25% of super PAC money comes from just five donors, Harold Simmons (pro-Romney) , Sheldon Adelson (pro-Romney), Peter Theil (pro-Ron Paul), Bob Perry (pro-Romney now) and Jeffrey Katzenberg (pro-Obama).

       If money affects voting and elections, then according to Posner’s logic, the people who will actually exercise the rule of politics and check the Executive Branch are to be these handful of businessmen and others like them.   According to the Center for Responsive Data, 3.7% of the contributors to super PACs account for 80% of the money raised-46 donors have given in excess of $67,000,000.[2]


Money and Prosecutions

       In the case of MF Global and Jon Corzine, Jon Corzine has been one of President Obama’s elite bundlers in 2011 and 2012.
He campaigned heavily for President Obama when he was governor of New Jersey and has held private fundraisers for President Obama in his home even after MF Global went bankrupt and $1.6 billion of customer funds went missing in October 2011.  It was announced last week that he is unlikely to face any criminal charges.

       Contrast this to the Department of Justice’s handling of the same violation of the Federal rule requiring the segregation of customer funds in the matter of Peregrine Financial Group.  $215 million of customer funds were discovered to be missing from customer segregated accounts in July 2012 at Peregrine Financial Group.  Russell Wasendorf Sr was arrested and criminally charged later that month.   Same act-missing customer funds-but far disparate prosecution. 

       Remember that in the futures industry, the key difference between futures commissions merchants (“FCMs”) like Peregrine and MF Global and securities brokerages is that FCMs, unlike securities brokers, are required by law to keep their customer funds segregated from the FCM’s own funds.   It is in this way that FCMs have been able, with comparatively few exceptions, to ensure that customer deposits are completely protected from all losses an FCM may incur due to its own proprietary trading.   Before MF Global, the requirement that FCMs segregate customer funds completely from their own funds largely prevented FCM customers from losing money due to an FCM bankruptcy

       In my first article on MF Global, I suggested that the $1.2 billion missing from customer segregated funds may have been incurred due to over-leveraged positions in European sovereign debt that coincidentally took a dramatic turn for the worse (as they did in fact as yield curves doubled rapidly in some issues) during the last weeks of October, and that funds were transferred to cover margin in customer funds held in European debt.   There is a scenario that nothing illegal would have occurred because CFTC Rule 1.25 had been amended to permit the investment of customer segregated funds in foreign sovereign debt.  Keep in mind that this rule was amended by Jon Corzine’s lobbying of Commodity Futures Trading Commission (“CFTC”) Chairman Gary Gensler, who is a friend and colleague of Jon Corzine.

        An alternate illegal scenario is that MF Global may have engaged in some late stage embezzlement of customer funds that were supposed to be segregated from MF Global’s accounts and never commingled with any other funds.[3] One way this may have occurred is if the funds were transferred out of customer segregated funds for a legal purpose but without the customers’ meaningful consent or, more likely, with an intent to deceive the customer.  

       If MF Global transferred customer funds out of segregated accounts as a loan to MF Global to cover margin calls in existing positions in sovereign debt,
(perfectly legal)
[4], it may however, be fraud and intent to deceive on its part if MF Global knew it could not repay the money.  This fraud may have occurred if MF Global knew (and it would be interesting to argue how it did not) that it sought to legally borrow from customer funds, knowing that it was de facto
insolvent and could not replace the money.   

       During Senate and House hearings on MF Global, Terrance Duffy, the CEO of the Chicago Mercantile Exchange contradicted Corzine’s testimony and stated that the CME’s investigation of the MF Global matter revealed the existence of emails between MF Global’s assistant treasurer and Jon Corzine.  These emails where contrary to what Corzine told Congress and suggested that Corzine had in fact authorized the transfer of customer funds out of customer accounts-the funds that went missing.   We also know that while Jon Corzine claimed he knew nothing about the financials at MF Global, he was peddling them to Interactive Brokers as he was trying to broker a last minute sale of MF Global to Interactive Brokers–in other words, he had to have been extremely familiar with MF Global’s financials during the exact time period he claims to Congress to know nothing of what was happening.

       We still do not know everything that really happened at MF Global because the Department of Justice has not yet decided to grant any immunity to the one person who would be their chief witness in the matter, the Assistant Treasurer.  The Assistant Treasurer is represented by Reid H. Weingarten, who is as luck would have it, is one of United States Attorney General Eric Holder’s best friends.
Some could say they agreed to let the clock run out on this one.

       From a purely economic cost benefit analysis, Jon Corzine’s raising in excess of $500,000 for President Obama in 2012 alone was the smartest money he ever spent and appears to have bought him justice in the sense of a reprieve from the CEO of Peregrine’s fate.

      What about Mr. Adelson?  The billionaire casino magnate is being investigated for possible violations of the Foreign Corrupt Practices Act, money-laundering and bribery.  Perhaps contributing by some accounts close to $100 million towards Mr. Romney’s election would ensure a stop to the pesky Federal investigators.  If so, this would be money entirely worth spending.

       This brings us to the last bit of news from last week that Goldman Sachs would not be investigated for criminal wrong-doing in connection with mortgage crisis and certain deals like ABACUS. 

       This Justice Department  and SEC have gotten many investment banks to execute settlement agreements with them including Goldman and Citigroup-essentially selling “get out of jail cards.” Are these settlement agreements, as the Judge Rakoff and Bloomberg’s Jonathan Weil have asked, merely considered the “cost of doing business” or some part of a transaction tax on offending financial titans?[5]

       If it were in the public’s interest to prevent fraud upon the market, then fines should be significant enough to actually deter illegal conduct.  If not, prosecutions should be endured and convictions gotten.
The historic role of punishment in the criminal justice system has not been just punishment, but deterrence.
Having Citigroup or GS pay $285 million is pin money to banks with quarterly revenue in the billions of dollars-the “cost of doing business” is not a deterrent to anyone but more like the cost of a municipal parking sticker to the average Joe.

       What is problematic about bank settlements is that smaller market participants cannot afford to pay for “get out of jail cards” and because the costs of prosecuting anyone other than an investment bank are less, smaller participants are actually prosecuted and do get jail time.   Peter Boyer and Government Accountability President Peter Schweizer have written about how justice is for sale in Mr. Eric Holder’s Department of Justice pointing to the fact that despite President Obama’s claims to represent the 99%, Department of Justice “criminal prosecutions are at 20 year lows for corporate securities and bank fraud.” [6]  Given the correlation between campaign contributions (admittedly protected speech) and selective prosecutions, the 20 year low in bank fraud prosecutions is unlikely to change  with either political party.

       Consider the money.  Goldman Sachs employees were the second largest single contributor to President Obama in 2008 contributing $1,013,091.[7]
Goldman’s employees are the largest single contributor to Mr. Romney in the 2012 election cycle having donated $636,080 by the end of the last quarter.
Goldman Sachs is also one of the largest clients of Mr. Eric Holder’s lawyer firm Covington & Burling.

       Money has always played a part in politics and it is rational for everyone with a stake in the political process to participate.  But not all participation is equal-not even close.  The odds of one vote ever making a difference in a Presidential election are between 1 in 10 million and 1 in 100 million-depending upon the state in which you live.  Voting only matters in the aggregate but money seems to matter more in terms of affecting action after election.    Above all, justice must never be for sale because as Cato the Elder and many others have pointed out throughout history the selling of justice, like the selling of indulgences, is an attribute of a decaying and dying political system.

       What is disconcerting is that mere principles, be they the adherence to ideas like freedom and individual liberty or the idea that you are secure in the sanctity of your own home, are always bound to be under-represented in the electoral process and as such destined to play the underdogs.
At one point in
Democracy, Madeleine asks the impressive Ratcliffe, “Surely…something can be done to check corruption.  Are we for ever to be at the mercy of thieves and ruffians?  Is respectable government impossible in democracy?”  Ratcliffe’s reply is haunting, “No representative government…can long be much better or much worse than the society it represents.  Purify society and you purify the government.
But try to purify the government artificially and you only aggravate failure. @

R. Tamara de Silva

Chicago, Illinois

August 20, 2012


R. Tamara de Silva is a securities lawyer and independent trader


[4] Remember CFTC Rule 1.25 which had been amended to allow the investment of customer segregated funds in foreign sovereign debt, was amended back after the fall of MF Global to disallow the investment of customer segregated funds in foreign sovereign debt.




In Defense of Private Capital and Capitalism

By R. Tamara de Silva January 14, 2012

Is Mitt Romney guilty of capitalism? His opponents in the race for presidential nominee of the Republican Party have converged in their rhetoric and ideology with the Democratic Party and President Obama to decry that Romney’s actions at Bain Capital and the private equity model in particular, are wrong, so extremely wrong that they make him wholly unworthy of consideration of President of the United States. Whether or not the latter conclusion is true or false, their argument is not evidence of either conclusion. I have read that a majority of Americans tune out politicians unless they stand to benefit from a specific government program or benefit-this would be a rational instance of when to tune them out.[1 ] The Democrats and accusing Republicans are in error about private equity and capitalism. What is worse they are placing populism above this country’s core principles.

“If someone who is very wealthy comes in and takes over your company and takes out all the cash and leaves behind the unemployment? I don’t think any conservative wants to get caught defending that kind of model.” This quotation, which could have been from David Axelrod or President Obama, was actually from Newt Gingrich. In other words, conservatives cannot defend capitalism if it means that people will lose jobs.

Some history is helpful. Job creation and job retention are not the primary motivations for innovation and industry in the United States, they have never been. Job creation gained traction in the public discourse when it used as a justification for the government spending TARP funds-the rationale being that the government’s spending would create a soft landing for the economy, lessen the economic impact of the recession and Credit Crisis and create (albeit often temporary and expensive) jobs. Yet it is not job creation that has motivated this country’s most celebrated capitalists but profit motive or sometimes the pursuit of excellence expressed as an idea. Henry Ford did not start building his own self-propelled vehicles that ran on gasoline in order to create jobs any more than Steve Jobs began building personal computers to create jobs.

Hard Edges

We may not be in an economic crisis but a period of economic change. Capitalism has hard edges, especially in periods of extremely rapid economic change. Failure and obsolescence are the sina qua non of capitalism. What Mr. Gingrich’s statement is missing is the possibility that America and the rest of the developed world are in the midst of period of rapid flux.

Almost without exception, most neo-classical economic theory holds that crises do not persist indefinitely, because economic systems revert to some equilibrium or balance. Perhaps, America and Western Europe as seen by the possible collapse of the European monetary union, may by in as much a period of economic change as it is in crisis. The distinction is important because if we are in a period of rapid economic change, things may not get better exactly as we expect them to-they will change.[ 2 ]

We may be in the midst of another economic revolution akin to that of the Industrial Revolution. Alternatively, we may be seeing disruptive technologies change the world and create economic upheaval (the hard edges) in the form of extreme wealth and extreme poverty as we saw in the close aftermath of the steam engine, the internal combustion engine, the railway and the utilization of electricity.

The world has never been, not at any time since mastery of the seas meant dominance in trade-not even during the silk trade–as interconnected as it is now. Technologies like the Internet and information technology have been both disruptive and creative at once, and at a breathtaking pace. The face of manufacturing, as we have recognized it for most of the twentieth century has itself changed, so has its importance as a percentage and engine of economic growth. It has been replaced by other sectors including and perhaps infamously, the financial services sector described by the term financialization. Just as what happened one hundred years ago, politicians lobbied for groups that were nearing obsolescence, but were unable to stop change itself. We see changes in the countless examples of relatively lower skilled, high paying jobs that have been erased and may never return. In periods of rapid economic change, settled patterns of work are upended. Another factor is the creation of disparate wealth between wealthy superclasses (robber barons) and everyone else, including the newly displaced.

Bain Capital, Private Equity and Venture Capital

It is easiest to extol the virtues of free markets and capitalism when able to toss in Steve Jobs, Bill Gates, Thomas Edison or Henry Ford as stunning examples of its success- but to be fair, these people are eight sigma events. Most capitalists are hardly this glamorous, they never make magazine covers, and their stories and personages are decidedly more bland if not just boring-fitting very well into the fat middle of a normal bell curve. Mitt Romney has been roundly accused of being unpardonably bland but this is not an economic transgression. Attacks on his career at Bain Capital are misplaced because both the private and venture capital business models provide extremely important social and economic functions.

Romney and Bain Capital are charged with making too much money, having businesses fail and alternatively, causing some of the most sympathetic people in North America to lose their jobs. The fallacy of these arguments are legion.

Bain Capital is primarily a private equity firm that also has a venture capital arm. Private equity firms invest by buying ownership of companies where they see the potential for a return for themselves, a return they capture by later selling the company at a profit to another party or parties either in the private or public markets (they sometimes retain acquired companies). Private equity investors can be more sophisticated than other corporate governors and in theory be better managers- thereby using their unique vantage point and experience to create wealth for investors.

Venture capitalists take a lot of risk, often investing their own money in start-ups and the new companies of entrepreneurs in the hopes of finding the next Google, or Apple. Both private equity and venture capitalists are rewarded for being able to recognize the best entrepreneurs, the best ideas, and helping to bring them to market by financing them, so that the world profits from the next iPhone, the next life-saving technology or Google.

No one in either industry risks their own or their investors’ money expecting to fail. They would not stay in business if they did.

Sometimes, as the bi-partisan critics point out, people in companies acquired by private equity lose their jobs. One of the reasons for this is that private equity turns companies around by making them more efficient. This is often accomplished by getting rid of excess layers of management, unnecessary employees and generally, “bloat.” It is important to remember that what is considered “excessive” in layers of management or how “bloated” a company may look-is largely subjective. Profit motive is the engine of capitalism, not job retention.[3 ]

When we introduce terms like “looting” which is a loaded term it is important to keep in mind that this is also a subjective term. Romney’s critics are looking at Bain in hindsight…with some not insubstantial measure of bias. Also consider, that the world may be changing at a rapid place and some degree of job displacement may be the norm.

Investing in companies and trying to turn them around is not as easy it is sounds. It also involves an appetite for risk that most people do not have. A majority of businesses fail within two years of sooner after their inception (even if they are not distressed to start before being acquired by a Bain Capital).

Taking risk is nonetheless commendable. Taking huge risks can lead to catastrophic failure or success. I read somewhere that Thomas Edison failed well over 1,000 times before successfully creating the lightbulb. But he made in well in excess of 1,000 attempts and had the stomach to endure that much defeat-this is not common. Facebook, and Google were not guaranteed to successes. There is only one Mark Zuckerberg and only one Steve Jobs. If a high failure rate did not come with taking significant risks, there would be a 100,000 Bill Gates as opposed to just one. Looking at Bain’s record, I am reminded of the Pareto Principle or 80/20 rule–that 80 percent of the effects are the result of 20 percent of the causes.

Overall, venture capitalists do well and their importance to the economy cannot be disputed. Venture capital is responsible for 12.1 million private sector jobs or about 11% of total private sector jobs that collectively generate $2.9 trillion in revenue.[4 ] Private and venture capital firms are responsible for most jobs in the software, telecom and semiconductor industries.[ 5]

Slavery and Principles in Opposition

The Founders has a very odd notion for their time, the idea that people were born with natural rights-not granted by a monarch or a government but actually born with rights, rights inherent to all individuals. This was a radical idea!

While there is no pure form or capitalism, capitalism is more conducive to individual freedom and human rights than any other system.[6 ] It simply trumps all alternatives. Capitalism promotes the opposite of slavery and is conducive a core principle deeply held by the Founding Fathers – that human beings have human rights. Self-ownership, the opposite of slavery is one of them.

This also comes with the harsh reality that some people will not succeed and must fail in a capitalist system. Because in a larger sense, it really makes no difference whether capitalism works perfectly or not-it is the legally instituted economic system most opposite of slavery.

Candidates for the Presidency, including the incumbent, like all politicians crave power so much that they must feed populist tendencies which, are based on emotion regardless of whether they cannibalize this country’s core principles. All of the arguments against Bain Capital are populist ones designed to enrage, and excite anger and envy. They seek to alter the capitalist system by selectively identifying what parts of a free market are acceptable at a moment in time and what are not–and to suggest improper conduct where there is no evidence of any illegality (other than profit) by imposing the same arbitrary values-envy not being a great value by the way.

Some principles have to be above populist tendencies or we will have no principles standing. Steve Jobs and Henry Ford are good examples against these populist arguments-their motivations were never job creation or job retention but their economic enrichment-in pursuing these narrow goals they changed the world. Insisting that job creation or retention trump the motive of wealth creation, is something entirely other than capitalism.

Adam Smith’s first great work before The Wealth of Nations was The Theory of Moral Sentiments, which made the case for sympathy as a foundation for human relationships in a civil society. Politics plays a large role in human relationships especially when it is used as lever to ignite class warfare and to institutionalize envy. Populism must never be used as a political campaign, however convenient or effective, because it ultimately enrages and divides a nation at its core, and sometimes these divisions cannot be healed.

Instead of attacking Bain Capital, all the candidates from both parties ought to address what harms capitalism (other than themselves obviously). If it were just Adam Smith’s animal spirits competing and the fiercest winning, we would not have government subsidies, tax breaks and bailouts–all selectively doled out for a few-not all. Not even a Fed giving free money to some (a preferred very few)-not all. Or maybe we would because many of those that succeeded the most would always use their resources to create cartels, monopolies and buy political influence. Bribery and policy for vote getting- have no place in a purely capitalist system and their presence has…at least this is my guess-given capitalism a bad name.@
R. Tamara de Silva Chicago, Illinois January 14, 2012
R. Tamara de Silva is an independent trader and securities lawyer
1. Class War? What Americans Really Think About Economic Inequality, Lawrence Jacobs.
2. Of course economists that guess correctly and point out a plausible causal variable will appear brilliant but there again, only in hindsight. We cannot really know if we are in a crisis or in a period of dramatic change but it cannot hurt to be aware of the possibility of the latter.
3. The profit motive cannot be selectively excised from capitalism in favor of job retention, as many of Romney’s critics suggest. It was not that long ago that the USSR boasted of full-employment but could never match the sheer volume of innovation produced by its arch rival.
4. 5. Id.
6. There is no purely capitalist system and may have never been-in the sense of a laissez-faire system because the State is always and in some manner involved.