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Reason On How and Why 38 Studios Went Bust

Posted by timothy on from the other-people's-money dept.

cathyreisenwitz writes "The 2012 bankruptcy of Rhode Island-based video-game developer 38 Studios isn't just a sad tale of a start-up tech company falling victim to the vagaries of a rough economy. It is a completely predictable story of crony capitalism, featuring star-struck legislators and the hubris of a larger-than-life athlete completely unprepared to compete in business." Reason makes no bones about its view of this kind of public-private "partnership."

3 of 227 comments (clear)

  1. Re:blah blah Capitalism Evil blah blah by Anonymous Coward · · Score: 5, Insightful

    Reason, a libertarian magazine, is probably the most pro-capitalism publication currently available. The article is about how taxpayer-funded loans are almost always a bad idea. Schilling was unable to find private sector investors - which usually means that the business model is not very good. Crony capitalism is not capitalism, it's a corruption that wastes a whole boatload of our tax money.

    Short story: Leave investing to investors and stop risking taxpayer money on ventures that will most likely not succeed.

    Come on, son.

  2. Re:blah blah Capitalism Evil blah blah by Hatta · · Score: 5, Insightful

    Crony capitalism is not capitalism

    Crony capitalism is what actually happens when you implement captialism in the real world. Capitalism is the theory, cronyism is the practice.

    --
    Give me Classic Slashdot or give me death!
  3. Here's how... by MikeRT · · Score: 5, Insightful

    Crony Capitalism is when you use the state to get unfair private advantage. It's not like a builder who gets the state to "smooth things out" when building something for public purposes (ex. police station, highway, etc.). There are times when the government needs to help facilitate the work of private parties. This was not one of them. It was the government doing something with a marginal public purpose (the nebulous "it'll create more jobs" excuse).

    Put another way, this is precisely the same sort of crap we saw Bush and Obama do with the banking sector (using public funds to secure private losses that were not incurred due to a public purpose). In either case, the government stepped in to do what the market should have done in an otherwise private transaction with minimal to no public purpose.