The Rise of Cronyism
14th May 2017
I object to the term ‘crony capitalism’ because cronyism has no structural connection to ‘capitalism’ (which is really just a shame-work that Marx invented to have a stick with which to beat free markets); if it did, then there wouldn’t be any cronyism under socialism, when real-world experience show that cronyism is even worse under socialism than under its alternatives.
Still, this is a good exposition of the fact that whenever government sticks its paws into economics it attracts cronyism as rotten food attracts maggots. This is why ‘rich’ people are so comfy with politicians who spend most of their time bashing ‘the rich’ — rich people know (a) they don’t really mean it, and (b) they know that whenever politicians actually do something that is anti-rich they soon get their asses handed to them.
May 14th, 2017 at 17:28
“Crony”, in this context, is merely a modifier, not an essential element. There are crony capitalists as there are crony communists and, in fact, crony nothing-ists.
Cronyism isn’t confined to the political arena; it exists wherever business is transacted. The underlying principle of capitalism, however–i.e., naked greed–lends that particular system particularly vulnerable to cronyism…which I submit is not a vice, given the system. When the ultimate commandment is “Thou shalt maximize thy gain whatever the cost”, cronyism becomes just another tool to fulfill the requirements of The Invisible Hand.
When the entire world operates on cronyism, we will enter the paradise with “All necessities provided, all anxieties tranquilized, all boredom amused.”
May 15th, 2017 at 09:43
Anacyclosis. Every free market has a natural aristocracy (as Jefferson called it). Eventually the natural aristocracy becomes an oligarchy, as the aristocracy becomes unconstrained by the laws. The oligarchy becomes a social democracy. The social democracy becomes a plutocracy, ruled by the rich and powerful. Then, the rise of the populists which leads to rule by one man. Then the aristocracy, and so on.
Free markets are not stable because riches make some men free from the law. And internationally, free markets don’t even work as advertised. Free markets can weaken and impoverish nations.