Rourke

With Rand and Objectivism being so closely tied to the mentality of CEO's, who are persona non grata right now, the negative publicity garnered could be a stake in the heart of Rand as a philosophy with broad public appeal.

One has to wonder, given the absolute certainty so many Objectivists have about the viability of such a social system, and the constant complaints about the "evil" government using force on them, why Objectivists haven't started their own society, their own land of opportunity. Certainly there are enough Objectivists with money, more and more CEO's seem to be buying into it. Just get yourself an island in, say, the south Pacfic, or buy some nice coastline acreage from an impoverished African nation, and set it up. If you are so morally convicted, take action. There's isn't a snowball's chance in hell of getting it going in the United States or the UK. So rather than languish in the stability of the corrupted mixed economies, don't Objectivists want to live in the pure and unfettered world of their dreams? Or is it that, deep down, you know that it isn't sustainable?

It won the Pulitzer Prize, dude. No small achievement. And considering your accusation of Marxism is leveled at anything resembling even the slightest baby step to the left of your ideology, it dilutes the impact of the criticism. It actually sounds like your familiar with many themes of the book, but how you came to the conclusions you did is quite mystifying. Exactly where do you think he went wrong in explaining why human societies developed as they have? I thought his explanations of why Africa developed much more slowly made perfect sense. You can't get rational thought to permeate a culture until it can feed itself consistantly and with abundance enough to allow specialization to develop within the society. I thought he was perfectly clear about this. As much as I like the classics, I tend to stick with more contemporary reading these days. The most current author you cite has been dead for 25 years. A lot has happened since then, much is to be learned. Do you challenge your own assumptions by reading a diverse collection of (modern) viewpoints? I used to play a lot of basketball in the inner cities. Last time I checked, inner city poor vote overwhelmingly liberal (Democratic).

The biggest predictor of success in life is your who your parents are. That's not to say people don't overcome their upbringing or underachieve in life, but if you're placing a bet, the odds are stacked that the family influence beats everything else. You sound like you worked hard and deserve what you earn, but you don't give your father enough credit. He survived the hell of WWII, then got free government money (I would say he earned it) to go to school and better himself. He became a professional engineer, which sounds like the expectations for you growing up were pretty high. Now consider people who don't even have fathers, or had deadbeat dads who beat them and called them worthless their whole life. Then add on top of that a crap inner city environment he had to survive, burned out teachers who didn't give a damn, peer pressure that says its "selling out" to be smart, etc., etc. Certainly you can see how people get a head start or get handicapped depending on their childhood circumstances. Bill Gates, came from a wealthy family. Larry Ellison, father made a small fortune before losing it in the Depression. Easy to see how life skills transfered to his son. Paul Allen, had a succesful father and attended private school. Sergey Brin, father a professor in the department of mathematics at the University of Maryland, mother also a mathematician Maybe not all (but Gates) came from wealth, but most had incredible advantages over the average person. For the most part yes, that is what the book is about, but take a look at chapter 13 where he discusses inventors. The evidence is greater that forces within society are more determinate of who the great men are, not so much the men themselves. I'm not discounting any individual man's ability to control his destiny, but just looking at the big picture and seeing where the pieces do fall. I don't know of any indispensable men. The whole of society is like a house of cards, sure there are people at the top, but take away the people beneath and they become meaningless.

So its completely inappropriate to simply analyze the causes and effects of extreme wealth concentration on society? Take another look at the Times site you linked to, agrippa. The first mistake you made was assuming that it represents wealth inequality. The figures represent income inequality. Very different. But even looking at the charts, you can see there is little movement downward from the top 2 quintiles. In these two quintiles there is a high degree of stability. Do a search on the authors' other writings, and see the conclusions they come to are similar to mine. But one has to understand that income fluctuates year to year, and is not a reliable indicator of wealth. An example is the Steve Jobs kind of setup, $1 salary and highly variable realized gains and other compensation. I don’t think many people consider him to be hurting in a year that income represented on his tax return was just $1. There are individuals with million dollar investment portfolios and zero taxable income on the tax return. An interesting aspect of this is that it’s hard to find data on wealth in the US. Treasury data. The major asset of the middle class, generally representing the bottom 3 quintiles, is their home. The major assets of the rich are financial securities, mutual funds, and small business equity. For the last 25 or 30 years, stock prices have gone up quite a bit faster than housing prices. Having wealth as stocks, bonds, etc, is much more valuable because of its liquidity. And the burden of mortgage debt can be heavy, particularly when interest rates rise. Its true that more people have stock ownership now, but mostly through mutual funds and pension funds, so there is little influence over corporate policies. Sounds like you believe there are just a few individuals pulling the rest of us up out of the morass despite ourselves. Jared Diamond in "Guns Germs and Steel" takes this "Great Man Myth" and turns it on its head. He discusses the evolution of technology and inventors throughout world history, and that it was only when society was capable of using their products (or ideas, as the case may be) that they were implented. Inventors, and CEO's, rise to positions of importance because society dictates (broadly speaking) that it be so. In fact I come from a fairly wealthy family, so I can see first hand the benefits of money and social capital on the chances for success. All my cousins went to Ivy League schools or other elite colleges. Is this just a coincidence?

I'm not big on pure evolutionary psychology either, but just threw it out there as one alternative. I don't define life as grave avoidance, I understand (I think) the larger Objectivist philosophy about living a life of principle. But in the circumstances I described, your primary value (your life) comes into conflict with your principles. So it seems one would be forced to choose one's life, no matter how painful the choice, if one is to stay true to Objectivism. There are all sorts of sacrifices you can make for your child that are consistant with Objectivism, but in my undersanding of it, sacrificing your life for his is not one of them. Saying your life would be too painful to go on doesn't seem to validate the act. I tried finding that thread softwareNerd mentioned, but no luck finding it. Even with a Google search I haven't found anything. I'll check out Viable Values. Any idea what page number the author reflects on this subject?

Well saying "argument" insinuates that you dismiss him as some kind of extremist. In fact very few social scientists would object significantly with what he is saying. Of course they all could be wrong and you right, but I think he deserves to be taken seriously. Also, his articles are value-neutral in that he does not advocate policies, only reflecting on observeable phenomena. He never made this value judgement about rich and poor in his essays. Your statements, ironically, imply the opposite is true. This is a red herring. The topic of the essays is not the accumulation of wealth, it is what happens when that wealth has already been accumulated. Another excerpt: "Wealth also can be useful in shaping the general social environment to the benefit of the wealthy, whether through hiring public relations firms or donating money for universities, museums, music halls, and art galleries. Second, certain kinds of wealth, such as stock ownership, can be used to control corporations, which of course have a major impact on how the society functions." There is a ton of info on the site evaluating how that power operates, how wealth disparity translates to power disparity, and how once there is a power structure, it is very hard to change it or dislodge it. Just touching the tip of the iceberg here. Few would dispute that man has considerable power to marshal his resources to affect his life. You might consider the fact that some people start out with substantially more resources (money/family connections/intelligence) than others. Many people start off on 3rd base and think they hit a triple. The vast majority of those with real wealth in this country came from real wealth. Hmmm, I don't recall him saying anything to this effect in the readings. Savages? I don't share your antipathy for working class people. For every successful CEO or businessperson there are countless folks needed to do the physical work. Demographically, not all people can be virtuous CEO's.

Good answer. The reason I'm asking this and other questions is to try to understand principles of Rand as understood by Objectivists, and there seem to be differing interpretations sometimes. Certainly a Christian could point to the Bible for all the answers, but as you know there are so many interpretations. And I'll bet dollars to donuts the variability in the answers to these questions here would be significant. I think since I find these questions posed nowhere else, they could generate valuable discussion. As to your specific answer here, I am having trouble understanding. If a true Objectivist puts his life as the primary value, how could an emotional attachment to anything or anyone override this, under any circumstances? I understand the emotional trauma of the sacrificing a child would be great, but I don't understand what other value could topple the value of one's life? To approach this question using evolutionary psychology, there is a one size fits all answer, in that you would save your child to ensure the passing on of your genes. If you need context to answer, perhaps use the classic Titanic example. And before it gets shuffled to the background, any feedback on the rational reasons for joining the military would be appreciated also. Thanks

Thanks for your thoughts, but that answer seems pretty vague and the questions I posed could be answered more precisely. The examples you gave as "dangerous" are not generally considered imminently so, so they don't really make for a good comparison. These questions are intentionally outrageous, but what would the answers be? Certainly almost anyone would help the person under the vending machine, but why would you? What is the motivation? If you left him to die, could anyone cast aspersions on your character? The 2nd example, if your life is the primary, why sacrifice it for even your child? Maybe there are simple answers to these questions, and maybe I'm just missing it.

I'd like to hear form anyone who actually read the 2 (short) articles I posted on the relationship between wealth and power. This is an important concept that is almost universally accepted as valid, so it would be instructive to hear the reason why here it is considered a "non-concept."

This does sound collectivistic in this context, though. I agree it is rational to feel one needs to have an understanding that all in the unit are willing to take risks. But to go beyond this, to commit oneself to certain death, seems outside the Objectivist view. I would say that if a soldier signed a contract with the military to risk his life for a victory, then he is obligated to stand on the perimeter and not cut and run. There is still some chance of survival if he stays, and he risks summary execution or ostracization if he runs, and he may want to stay because other soldier's lives are valuable to him. But with the grenade scenario, death is pretty much certain. It is probably not in the contract he signed that he must make such a sacrifice. In such a circumstance, I'm not entirely sure about his ultimate interest in victory, weighed against his certain death. It would seem that given the choice between potential life or potential victory for his group/unit/country after his death, a rationally selfish man would choose the former. Isn't the only rational thing to do for such a man is to curl into a ball and hope for the best? And given that one may be put in the situation where one's primary interest, one's own life, could be sacrificed for others, why would anyone ever agree to join the military in the Objectivist world? You mention fighting for values, but the primary value is one's life, so why take such a risk? Does anyone who joins the military, or even a police officer or fireman for that matter, cease to behave as a rational self-interested individual, but rather their primary value is the end goal of the group (military victory, public safety)? Where is the threshold for danger or inconvenience that must be considered? Is it okay to go into a smoky building to rescue an unconcious stranger if you feel the fire is small and the risk is low? Why take any risk? Is it acceptable to decline to help a person trapped under a vending machine because Lost is coming on in 5 minutes? I also would like to understand the Objectivist view on the scenario I gave regarding the lifeboat. Should a parent sacrifice himself/herself for the child if there is one remaining seat? Why or why not?

I am hauling this thread out of mothballs as it was the closest thing I could find to this subject. Very interesting conversation here, but it isn't entirely clear to me to what extent Objectivists should avoid sacrifice to help others. Take for example the case of Wesley Autrey, "The Subway Samaritan". Following a seizure, Cameron Hollopeter stumbled from a subway platform, falling onto the tracks. As Hollopeter lay on the tracks, Autrey saw the lights of an incoming train. As one of the women held Autrey's daughters back away from the edge of the platform, Autrey dove onto the tracks. He thought he would be able to take Hollopeter off the tracks, but he realized there was not enough time to drag Hollopeter away. Instead, he protected Hollopeter by throwing himself over Hollopeter's body in a drainage trench between the tracks, where he held him down. The operator of the train applied the brakes, but two cars still passed over them, close enough to leave grease on his cap. Now Autrey may not have thought he was was putting his life dire risk of imminent death, but he clearly thought about it and was taking a calculated chance to save a stranger's life. He was widely praised for his efforts, but according to what I understand about the Objectvist pooint of view, his actions were really immoral. Is this correct? What is the acceptable threshold of danger beyond which one must avoid helping others? In this thread there is the prospect of what to do in a lifeboat situation where there is a stranger and yourself fighting over one last spot. A more interesting scenario to me, touched on here but not explored: what would be the moral thing to do if there is one lifeboat spot and you have the choice of putting yourself on the boat or your child? It seems like the obvious Objectivist solution would be to take the seat yourself, as one's own life must be primary. I like the grenade scenario, but applied to something more realistic. There have been many cases of a grenade being thrown into a foxhole containing, say, 4 soldiers, where one of the soldiers covers the grenade with this body, essentially sacrificing himself for the others. I understand the views expressed in this thread mean that all bets are off in the case of such an emergency, morally speaking. But how should this man's sacrifice be viewed afterward? Certainly there is the option of taking a morally ambiguous view, that the man was making his own decision in an emergency and leave it at that. But the results clearly result in, to use an oft maligned phrase, a "greater good", as the sacrifice means 3 men now live instead of die. I would think the natural inclination of any person is to see heroic sacrifice, not to feel completely neutral about it.

It might be helpful to define what objective and reliable sources are. Perhaps Brian and Thales can give the criteria for determining what each considers a reputable source, independent of the information supplied. For instance: 1) what is the source's reputation/credentials? 2) what are the source's conflicts of interests? 3) are all conflicts of interest disclosed? 4) how current is the source's information? 5) is there other independent information to support the claims of the source, and does the source provide links to aid in verification of claims? 6) echo chamber effect: do the same few sources seem to cite each other to give the appearance of consensus?

1) The district court decision I posted goes into the details of how individual companies and consumers were harmed. The text is quite lengthy so I see no need to add this into a post here since I have made it readily available to you through the link. To try to sum it up would leave out way too much information. 2) According to the Objectivist view, it appears there is none. 3) I don't have a problem with the wikipedia entry to define anti-competitive practices. Not that any of these things should necessarily be illegal on their face, but egregious implementation of these practices should be curtailed. Competitive practices would simply be the absence of any of these things. 4) You're never going to understand the answer to this question unless you understand the concept of power. From here: "Power" is about being able to realize wishes, to produce the effects you want to produce. It is one of the basic dimensions of all human experience, whether at the interpersonal, group, or societal level. It is only one of several universal dimensions in the human experience, along with love, cooperation, esthetics, and intellectual curiosity, but it's the one that plays the lead role in all the problems discussed on this web site. It's the dimension that leads to bullies, rival gangs, enforced cooperation, hierarchy, ruling elites, ruling classes, and wars among rival nation-states. Simply put, who do you think has more power, a CEO or a janitor? I'm not saying there should be equality of economic outcomes, just some understanding of how wealth really shapes the social and economic landscape. Further info on the relationship between wealth and power here. The Google column I posted was just a little conjecture on what possibly lies ahead. Take it with a grain of salt if you like.

In federal court there were 3 findings of fact: Microsoft was found to be a monopoly of PC operating systems (this is the focus here, NOT software), Microsoft harmed consumers through its use of its monopoly powers, and several of Microsoft's contracts had anti-competitive effects. This was affirmed on appeal to a US Appeals Court. Here you can read the decision. It goes into good detail on Demand Substitutability, Microsoft's power in the relevant market, The Applications Barrier to Entry, Viable Alternatives to Windows, Microsoft's Actions Toward Other Firms, etc., etc. Excerpts: "As has been shown, Microsoft also engaged in a concerted series of actions designed to protect the applications barrier to entry, and hence its monopoly power, from a variety of middleware threats, including Netscape's Web browser and Sun's implementation of Java. Many of these actions have harmed consumers in ways that are immediate and easily discernible." "Many of the tactics that Microsoft has employed have also harmed consumers indirectly by unjustifiably distorting competition. The actions that Microsoft took against Navigator hobbled a form of innovation that had shown the potential to depress the applications barrier to entry sufficiently to enable other firms to compete effectively against Microsoft in the market for Intel-compatible PC operating systems. That competition would have conduced to consumer choice and nurtured innovation. The campaign against Navigator also retarded widespread acceptance of Sun's Java implementation. " "Most harmful of all is the message that Microsoft's actions have conveyed to every enterprise with the potential to innovate in the computer industry. Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products. Microsoft's past success in hurting such companies and stifling innovation deters investment in technologies and businesses that exhibit the potential to threaten Microsoft. The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self-interest." A good argument can be made that only through anti trust actions vs Microsoft could Google be threatening Microsoft now. Now is Google any better? Some think Google is heading towards a potential monopoly in the future.

Nice argument, but for some odd reason you decided to define collusion in terms of price only in your theoretical scenario. Even still, I'm curious how your thoery would incorporate this case involving Toys R Us that shows that not only was an artificially high price reached, but that suppliers were in effect prevented from selling to other discount retailers if they wanted to continue selling to Toys R Us. Despite your assertions that price collusion doesn't work, efforts continue in the marketplace to achieve it, as well as bid rigging and other non-competitive practices, hence the busy year by the Department of Justice Antitrust Division in 2007. However they are notoriously difficult to feret out, and are usually only discovered when the DOJ is investigating the company/industry for some other reason. Whether price collusion works over the long term may be a moot point anyway, depending on the definition of "long term" and what kind of market we are talking about. Believe it or not, over the past week I happened to be in 2 book superstores stores, and went looking for the Rand book and the Bernstein book. Neither had it in stock. Then I checked the nearby county library holdings, and, despite living in the suburb of a large city, no regional library had these books. In any event, I am highly dubious of their value, considering their limited availability and what I have heard anectdotally. I will check out (or attempt to) Markets Don't Fail, though. I have to agree. There are too many issues in play here and the focus now seems to be solely on monopolies (and some massive oversimplifications) instead of the other dozen or so potential weaknesses of LF capitalism I have introduced. As to ethics in economics, it is a general guideline in economics that work in pure and applied economic theory is ethically neutral (although I'm sure the Austrians have their own unique views). On economic policy, ethics does permeate the discussion. Anyway, my larger contention here was that pure LF capitalism is self destructive to the soceity that implements it, and thus holding it up as the ideal appears to be irrational. But I'll have to reformulate my arguments and present them more coherently and succinctly in another thread(s).

This is a distortion of what I said, but makes for a convenient straw man to take apart. Who would object to such a scenario? In fact I really don't understand your point at all. Maybe you could just break off a smaller piece of my argument and chew on it, say, explain why price collusion is okay, or maybe you would choose to contend with the idea that LF capitalism left undisturbed erodes the middle class and masses wealth among relatively few, or possibly the notion that such massive wealth inequality equals a plutocratic state, or that maybe massive economic inequality leads to social/political instability. What happens these days is that the big international conglomerates often buy up the idea/product before it can get much traction. So they can shape and mold it to their advantage without the threat of an upstart business. Due to this likelihood, in the LF capitalist world I don't see how the hegemony of large established corporations could be disrupted.

I don't mean to keep using Microsoft for an example, but if Microsoft knows that if it makes it inconvenient enough to use any competing product, a high percentage of people won't switch, even if its better and free. Sure this is reasonable that people would find it in their interest to stay with Windows, most people aren't very tech savvy and need the standardization of it. Meanwhile Microsoft can continue eliminating competition, using the embrace, extend and extinguish tactic. Now Microsoft treads very carefully in order to avoid further anti-trust lawsuits, so its fair to say their strong-armed business tactics would be even more cut-throat in the LF capitalist world.

Thanks for the input. Well in fact I don't believe I ever made the contention that there is such a "perfect" state of competition (no more than there is a perfect human, we're all just striving for ellusive perfection), or that having a competitive advantage is unfair. The point is that when companies reach a critical mass, e.g. a monopoly or near-monopoly, oligopoly or monopsony, or when there is collusion between most or all of the principle actors in a market, they are able to wield tremendous control and power, including effects on price, and the ability of new competitors to enter the market. This is a perversion of the whole idea of the marketplace. But your points do well to underline the premise that capitalism has many inefficiencies. Where can I pick up the Google OS? Walmart perhaps? Seriously, there is a clash of the titans here over a lot of things but not in the OS market, Microsoft's bread and butter. How...and why?

I was an Apple user back in college, of course the whole campus used Macs so it made more sense then. But market share for Apple continues to fluctuate but never seems to get above the 5% mark. So its not a threat to Microsoft any time soon. As far as MS Office and IE, they still have a 95% and 76% market share, respectively. With Microsoft dominating the OS market, they can continue to make using alternative office or web browser programs inconvenient to use if one owns Windows (going back to the point about power), to maintain their stranglehold on the market. So of course no one is forced to use Windows, per se, but given the inconvenience of trying another OS, it is clear few will switch.

There is a difference between disparity of wealth and the point you are making, that there is no finite amount of wealth. I agree with your point, in fact I agreed with it in the last post, but maintain that it is beside the point. Take the example of a two cars traveling at 30 mph. One is accelerating by additional 5 mph every 10 seconds, whle the other is increasing its speed by 20 mph every 10 seconds. Both cars are increasing in speed, but the disparity between the two is widening. So, relating it to the economy and my point, this widening gulf appears to lead to increased power and control in the hands of a small group of people. You are being obtuse here. We are discussing laissez-faire capitalism, and in this mode of thinking the efficiency of the market mechanism is everything. In this case, any supplier such as Procter and Gamble, who wants to stay in business, must sell through Walmart, a virtual monopsony. P&G has little negotiating power in determining price, it is pretty much dictated by Walmart. If P&G is to stay in business, they must accept the price that Walmart states due to Walmart's dominance in the retail market. This is real power by one company to control prices and determine what is manufactured and and sold across the expanse of the whole economy.

I'm starting to be a "doubting Thomas" about whether you yourself have read the book. The raving Amazon reviews clearly say that this book is about the moral case for capitalism, NOT the economics of capitalism. So with that, and the fact that you can't even give me one refutation of my arguments from this book, makes it unlikely I will be picking it up soon. Well the link I provided was to help you understand vendor lock-in and its effect on other competitors' ability to enter the market. In essence, in such a case, the market becomes inefficient because 1) the monopoly or near-monopoly (in this case Microsoft) has a lot of power to effectively discourage large numbers of consumers from seeking out a different product for their needs, and 2) this kind of stifling of competition has a chilling effect on innovation. You are arguing the concept A) the morality of an economic/political system, while I am discussing B ) the sustainability or viability of such a system. What you are arguing is the equivilant of the following hypothetical discussion: ME: If I drop this cinder block from 10 stories onto a man's head, would it kill him? YOU: You are talking about the initiation of force, which is immoral. ME: Yes, Yes I know. I just wanted to know whether you thought it would kill him? YOU: Why separate the act of dropping it from the physics of whether it would smash his head to paste? It is immoral! ME: But certainly you can just tell me what you thought, whether the tensile strength of his skull could resist the force of impact of the concrete block dropped from that height. YOU: I most certainly will not! The immorality of such a proposed act prohibits me from even considering its implications.

Okay Thomas, I can't believe that in your mind you can't separate out and put under a microscope the concept of laissez-faire capitalism without bringing morality into it. For example, I can analyze the National Socialist government of Germany under Hitler in the 1930's and see that his policies turned that country around economically. Was it moral? Certainly not, but we don't have to get in to that to study its effectiveness, at least over the short term. Interesting choice for an example. There already is something better than Windows, its called Linux and its free. Only about 1% of computer users use it for an operating systems though, due to lack of support for certain hardware and application programs designed exclusively for Microsoft Windows, which has a 90% market share, a virtual monopoly. Due to this marketshare dominance, Microsoft software carries a high level of vendor lock-in, which is a big deterrant to switching from it as an OS. Vendor lock-in makes a customer dependent on a vendor for products and services, unable to use another vendor without substantial switching costs. Lock-in costs which create barriers to market entry for competitors. A government-induced monopoly? Hardly. I would not expect anyone to read a book I recommended without first enticing them with some juicy nugget of wisdom with which to whet their appetite for it, which you have not provided. There are just too many good books to read first that I know on good authority are worth the time. If you have in fact read this book, have internalized it, you should be able to regurgitate at least some relevant passages from it here to refute my arguments. Then I will consider it. I just read the Amazon review for this book that stated "In fact, nowhere in the book are there any graphs, analysis, or data that would support the author's thesis, in spite of his claim that capitalism is the optimal economic arrangement for human agents." Despite Bernstein's assuredly formidable powers of inductive reasoning, the lack of empirical data is going to force me to take a pass on this one. Still waiting on that evidence to refute the points I've made. All you've given me here is conjecture. Yes, I do understand this. It is economics 101. More relevant to my argument is that disproportionate wealth distribution leads to disproportionate power and influence. Take for example a company such as Walmart. It can place enormous demands and pressures on its suppliers because of its dominance in retail over its competitors. It forces suppliers to offer a lower price on products than to say Target or Kmart, and the suppliers have no choice but to accept. They have virtually no bargaining power because to not sell through Walmart is suicide.

Well you are focusing on "rights", but the point of this thread was to put that aside for the moment, and just figure out if this whole LF capitalist economy/society could pragmatically work. I mean, its all well and good if the philosophy is pure. Relying on a philosophy based only on the preservation of individual rights, and having nothing but a minimal afterthought to the consequences of its application on a grand scale is madness. The whole thing is squaring the circle if in fact it can't sustain itself as a system. I don't have any cronies

Unfortunately the writings of Mises were done at a time before the advent of modern advertising. The simple ads of his day were nothing compared to the amount of research that goes into producing a 30 second ad on tv. And I would definitely say that children, the target of so much advertising, are not the rational actors he is talking about. The marketplace will eventually figure out if your product is truly bad, but a product of only marginal inferiority can win out given a large enough marketing budget, or brand identity. One of the things I don't think Mises fully understood was the importance of the free flow of information in a LF capitalist society. And to continue on my earlier point, when wealth is concentrated in the hands of the few, those few individuals would have tremendous control of the information flow (control of the media, for example) in society, limiting people's abillity to make rational choices.