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Exactly What Is Crony Capitalism, Anyway?
Real Clear Markets ^ | 12/12/2011 | Bill Frezza

Posted on 12/12/2011 4:37:51 AM PST by SeekAndFind

President Obama, progressive politicians, Occupy protestors, and leftist intellectuals are having a field day attacking what they call the failures and excesses of capitalism. They declare wealth to be prima facie evidence of perfidy, making no distinction as to how it was obtained. They preach equality, not just in opportunity but in economic outcome. In their eyes, all members of the 1% are already guilty, so economic justice demands that the rich be heavily taxed, not just to lift others up, but to bring them down.

Some defenders of capitalism draw a sharp distinction between those who obtained their wealth through government favors and those who created their wealth by satisfying willing customers through free exchange. The former are called Crony Capitalists. The latter, interestingly enough, don't have a name. Let's call them Market Capitalists.

If defenders of capitalism hope to win over fair-minded fellow citizens who are honestly upset and confused, we need to define these terms and answer some basic questions. In what ways are Crony Capitalists and Market Capitalists the same and in what ways are they different? What makes the former immoral and the latter virtuous? Why are Crony Capitalists a threat to democracy and prosperity while Market Capitalists are essential to both? How is it that ever larger numbers of Market Capitalists are being corrupted, turning into Crony Capitalists? And what can we do to reverse that trend?

All capitalism is driven by greed - the desire to not only achieve economic security, but to amass pools of capital beyond one's basic needs. This capital can fuel the kind of conspicuous consumption that offends egalitarians. But it also finances investments in new products and businesses, without which the economy cannot grow. More on that later.

What makes Crony Capitalists different is their willingness to use the coercive powers of government to gain an advantage they could not earn in the market.

What makes Crony Capitalists different is their willingness to use the coercive powers of government to gain an advantage they could not earn in the market. This can come in the form of regulations that favor them while hindering competitors, laws that restrict entry into their markets, and government-sponsored cartels that fix prices, grant monopolies, or both.

Crony Capitalists are also more than happy to help themselves to money from the public treasury. This can come from wasteful or unnecessary spending programs that turn government into a captive customer, subsidies that flow directly into their coffers, or mandates that force consumers to buy their products.

Examples abound. Heavily regulated industries attract and breed Crony Capitalists, who are highly skilled at capturing the agencies intended to regulate them. Banking and healthcare top the list.

CLICK ABOVE LINK FOR THE REST


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: capitalism; crony; cronycapitalism; fascism

1 posted on 12/12/2011 4:37:54 AM PST by SeekAndFind
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To: SeekAndFind

Crony capitialism is simply is socialism in a three-piece business suit.


2 posted on 12/12/2011 4:46:30 AM PST by Biggirl ("Jesus talked to us as individuals"-Jim Vicevich/Thanks JimV!)
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To: SeekAndFind

How is it that ever larger numbers of Market Capitalists are being corrupted, turning into Crony Capitalists? And what can we do to reverse that trend?

Government keeps growing and as a result has more opportunity to prostitute it’s self to crony capitalists. The fix is simple. Cut government’s size and scope.


3 posted on 12/12/2011 4:51:34 AM PST by freedomfiter2 (Brutal acts of commission and yawning acts of omission both strengthen the hand of the devil.)
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To: SeekAndFind

Thorough and timely.

The government effort to abolish monopolies resulted in the ‘unintended consequence’ of heavy regulation for the common good.

Thereafter, every industry and enterprise was subject to government interference. The executive Branch and Congress realized that the engine of capitalism could be controlled and its wealth confiscated by the sheer threat of regulatory power. Socialism in a baby stroller.


4 posted on 12/12/2011 4:51:46 AM PST by sodpoodle ( Gingrich - flying solo - without congressional baggage!!!)
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To: SeekAndFind

Thorough and timely.

The government effort to abolish monopolies (for the common good) resulted in the ‘unintended consequence’ of heavy regulation where the Federal government had no authority.

Thereafter, every industry and enterprise was subject to Federal interference. The executive Branch and Congress realized that the engine of capitalism could be controlled and its wealth confiscated by the sheer threat of regulatory power. Socialism in a baby stroller.


5 posted on 12/12/2011 5:02:29 AM PST by sodpoodle ( Gingrich - flying solo - without congressional baggage!!!)
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To: sodpoodle

If you wany a thorough explanation of Crony Capitalism, check out Cong. Thad McCotter’s book, SEIZE FREEDOM. He does an excellent job comparing it with the “Sevile State” put forth by Chesterton and Belloc in the early 20th century.

PS: Once you read the book, you’ll see how badly the Republican party missed the boat on McCotter’s Presidential candidacy. Smarter than Newt,(that’s right) more Conservative than Newt, NO BAGGAGE!


6 posted on 12/12/2011 5:22:31 AM PST by cumbo78
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To: SeekAndFind

Socialists made the term up. (RINOS or useful idiots or philosophically challenged people using it are not your friend)

“Everything about socialism is sham and affectation.” - 23.11 Ch23; Evil; Economic Harmonies; Frederic Bastiat 1801-1850


7 posted on 12/12/2011 5:23:56 AM PST by PGalt
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To: SeekAndFind

Crony Capitalism,wonder if they mean like Pelosi and H Clinton doing insider trading?.


8 posted on 12/12/2011 5:27:37 AM PST by Vaduz
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To: SeekAndFind

It’s not the role of government to pick winners and losers in the marketplace and the U.S. taxpayer is not a venture capitalist. That’s why the Commerce Dept should be shut down and things like “trade missions” eliminated.


9 posted on 12/12/2011 5:34:08 AM PST by MNnice
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To: SeekAndFind

If we are not to be hypocrites, we conservatives need to abandon our most favored status for our favorite crony capitalists - the NFL team owners, and other various sports franchises that intimidate or bribe government officials into paying for their venues with taxpayer money.

And that includes getting rid of state subsidies for so-called “state” universities that field major league sports teams.


10 posted on 12/12/2011 5:46:11 AM PST by Daveinyork
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To: cumbo78

When McCotter dropped out - he endorsed Mitt Romney!!!!!!!

duh!


11 posted on 12/12/2011 5:55:18 AM PST by sodpoodle ( Gingrich - flying solo - without congressional baggage!!!)
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To: Daveinyork

Every aspect of our lives are/is controlled by some ‘authority’.

It has crept up on us; i.e.
Gated communities and HOA despots. House paint, gardens and amenity use.
Local planning commissions. Garbage recycling. School assignments.
County supervisors. Private property/Land use. Property tax.
State Legislators. Auto Insurance. Income tax.
Federal dictators. Everything else.


12 posted on 12/12/2011 6:03:52 AM PST by sodpoodle ( Gingrich - flying solo - without congressional baggage!!!)
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To: sodpoodle

Yeah, we’re the frog that they are boiling, but what does that have to do crony capitalism?


13 posted on 12/12/2011 6:13:13 AM PST by Daveinyork
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To: SeekAndFind

“Socialism is a system where the government directly owns and manages businesses. Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government.”

http://www.lewrockwell.com/paul/paul665.html


14 posted on 12/12/2011 6:15:58 AM PST by mo
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To: Daveinyork

I don’t remember - trying to count my soda cans for recycling. Hard to multi-task under such pressure;)


15 posted on 12/12/2011 6:19:11 AM PST by sodpoodle ( Gingrich - flying solo - without congressional baggage!!!)
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To: SeekAndFind

Capitalism is broken now. Corporations have figured out a way to get around the free economy. Where I work, we are being forced to work tons of overtime for free. Since we are salary and Pittsburgh is not exactly brimming with IT jobs. Also we get no comp time and little to no raises. Why would a company hire new workers when they get ten hours plus per week from an average worker?


16 posted on 12/12/2011 6:22:10 AM PST by Plumres
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To: Biggirl
Crony capitialism is simply is socialism in a three-piece business suit.

In other words, Fascism.

17 posted on 12/12/2011 6:26:46 AM PST by D Rider
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To: sodpoodle

“I don’t remember - trying to count my soda cans for recycling. Hard to multi-task under such pressure;)”

Yeah, I once tried to post while I was walking and chewing gum.


18 posted on 12/12/2011 6:42:14 AM PST by Daveinyork
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To: SeekAndFind

Crony capitalism is fascism. It is not really capitalism at all being that capitalism is dependent upon a free market. Fascism (crony capitalism) is a market that is intertwined with political forces (government, courts, activists, etc…). A free market operates upon basic free market principles (supply and demand, private ownership, free trade, etc…) whereas a fascist market operates upon political agendas (regulation, political causes, political principles, etc…) with ownership even being mixed at times (public and private).

The green movement is a perfect example of fascism (crony capitalism) because it seeks to have the market operate purely based upon a political agenda instead of free market principles. It also relies heavily on having politicians picking the winners and losers in a market and relies on taxpayers to become part owners of businesses.

The left-wing progressive movement is basically a mish-mash of differing fascist movements (green, gay, unions, welfare, etc…) all combining together.


19 posted on 12/12/2011 6:45:20 AM PST by TheBigIf
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To: SeekAndFind
In his Wealth of Nations, Adam smith refers to the manipulation of the economy for political means as mercantilism.
20 posted on 12/12/2011 6:48:46 AM PST by jmcenanly (Things will be better in 2013)
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To: SeekAndFind

DOW: all up together, down together, what a coincidence.

(Outcome vs. Opportunity economics, feel the “togetherness”)


21 posted on 12/12/2011 6:52:21 AM PST by Varsity Flight (Phony-Care is the Government Work-Camp)
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To: sodpoodle

He endorsed Romney becuase he believes that, of the crew that is left, Romney has the best organization to defeat Obama, which is the primary goal. I am not a Romney fan, but I am a HUGE McCotter fan. I ask that you check out his white papers, read SEIZE FREEDOM, watch his videos, and see if you come to a conclusion different than the one I made, which is what my post was about; that of the Republican candidates, he was the smartest, most well versed on foreign policy, best able to articulate the conservative message, no baggage, and best able to destroy Pres. Obama in a debate.


22 posted on 12/12/2011 7:06:43 AM PST by cumbo78
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To: cumbo78

Romney has a self-confidence problem. He does not enjoy being challenged - which is the best opportunity for a person of conviction to express those convictions. Romney has none - so it’s difficult.

When advancing his positions, Romney gives the impression of a person who is guilty of a felony - pleading innocent to a misdemeanor.

McCotter’s judgement of Romney is misguided.


23 posted on 12/12/2011 7:24:46 AM PST by sodpoodle ( Gingrich - flying solo - without congressional baggage!!!)
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To: SeekAndFind
Exactly What Is Crony Capitalism, Anyway?

FASCISM

24 posted on 12/12/2011 7:54:26 AM PST by thouworm (.)
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To: SeekAndFind

25 posted on 12/12/2011 8:03:11 AM PST by OB1kNOb (The prudent see danger and take refuge, but the simple keep going and pay the penalty. - Prov 22:3)
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To: Daveinyork
"Yeah, we’re the frog that they are boiling, but what does that have to do crony capitalism?"

That's how they put the fire under the pot. Every favor dished out by government in exchange for money to any individual or organization is a loss of freedom for the rest. Things like Obamacare don't come into being on their own. You can thank the medical insurance industry for that one. They lobbied heavily for it, contributed to politicians they thought would support it, and wrote nearly the entire document.

"Some pigs are more equal than others..."
26 posted on 12/12/2011 8:41:10 AM PST by CowboyJay (Lowest Common Denominator 2012 - because liberty was overrated)
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To: D Rider
"In other words, Fascism."

Bingo!

"The League is very well when sparrows shout, but no good at all when eagles fall out."

"Fascism should rightly be called Corporatism, as it is the merger of corporate and government power."

- Benito Mussolini

27 posted on 12/12/2011 8:48:33 AM PST by CowboyJay (Lowest Common Denominator 2012 - because liberty was overrated)
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To: CowboyJay

The point is, conservatives know that. What disturbs me is the affection that a lot of conservatives have for the NFL, which is a crony capitalist. I heard Glen Beck speaking about Tim Tebow, and now Rush is talking about him. He’s a crony capitalist. I don’t care how many hail marys he says, or whatever he does.


28 posted on 12/12/2011 10:36:02 AM PST by Daveinyork
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To: sodpoodle

This was a post about Crony Capitalism, and I recommended McCotter’s book, SEIZE FREEDOM. In short, what McCotter explains is that it is neither Republican nor Democrat, Conservative nor Liberal. It is Big Government combining with Big Business at the expense of the populace. IMO, its right on the money, which is one of the reasons they blackballed McCotter from the debates.


29 posted on 12/12/2011 6:38:39 PM PST by cumbo78
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