The very system of capitalism, by definition, entails risk. Therefore, whenever a so-called capitalist is in a situation in which they are being deliberately backstopped by the government, then they aren’t a true capitalist at all, but rather they are experiencing welfare capitalism. This thus signifies that though the vast majority of corporations sink or swim based upon their merits and business conditions, that there are certain corporations, that are big enough, or considered to be important enough, that when they get things all wrong, and therefore should be subject to going out of business or being insolvent, or perhaps being bought out or nationalized, that instead for certain particular favored corporations, they are bailed out.
Bailing out a given corporation is not only anathema to what capitalism stands for, but it is also quite frankly unfair to all those other companies that are not eligible for such bailouts. Indeed, for this government to put its thumb on the scale, so that a select few are subsidized, protected, and valued, whereas the vast majority receives none of this favoritism, is just plain wrong. In actuality, any company coming to the government, hat in hand, requesting favorable terms or to be bailed out for whatever reason, should either be put to the sword, or they should become nationalized. There should be no exceptions to this rule, because this government should not be in the business of which there are those “special” corporations that are coddled and saved, no matter the structure of the deal, so ultimately done. After all, at the end of the day, that isn’t capitalism.
Whenever we read that there are specific corporations that are “too big to fail”, we need to comprehend that if this is true, then this government should have never gotten to the stage in which it permitted that any one company became so big or so important, that the failure of such a company would be devastating to this nation and its people. Rather, it is the governmental responsibility to see that corporations must not only compete, but that monopolies or duopolies and the like, need to be reduced to an absolute minimum, and that whenever there is a business of which it makes practical sense that they have a monopoly, such as in utilities like water or electrical, then these need to be regulated by the government, in exchange for this natural monopoly being legislated into existence.
A free-market economy demands competition, of which that competition thereby helps to bring innovation and improvements to the general public. Indeed, it has to be admitted that without competition, then companies are going to have a strong tendency to concentrate their efforts on maximizing their profit in conjunction with lowering their risk, because they don’t have any real incentive to take a chance since they are quite satisfied with the way that things are and therefore their main concern is to see that this is the way that they remain now and into the future.
In sum, welfare capitalism is inherently unfair because it serves to save some while letting others fail, signifying that the government plays favorites, as opposed to its duty to see that the rules are equally applied to all.