Posted on 01/11/2015 6:53:29 AM PST by Regal
I have just recently become an active poster (responder), and have seen the term "Crony Capitalism" used without explanation. Recently I saw the term associated with Communism, which confused me further. A "google" does little to clear things up, particularly in regards to how it might be interchangeable with communism. Can anyone help clear things up?
Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials.
https://en.wikipedia.org/wiki/Crony_capitalism
To be clearer. I understand cronyism, but I am vague as to how the idea is communism related.
Sarah Palin may or may not have coined the term (I can’t remember), but she was the one who got it out into the political lexicon, just like Death Panels.
It’s not...it’s fascist.
Easy. Any enterprise that needs sustained government intervention to exist.
More closely related to socialism. Though there are corporations in red China and considering how Marxist the Chicoms are....it would have to be crony capitalist.
National Socialists or NAZIs were the ultimate crony capitalists with extant corporations like Krups, Siemens and Bayer supplying the 3rd Reich with weapons of war.
Not hard. In order to have crony capitalism you must first have a large central corrupt government controlling almost all of commerce sufficient to exclude free market competition.
Socialism and communism concentrate the control of wealth into the hands of a large central usually corrupt government.
The end result is why in in communist (and its transition stage socialist) countries as well as liberal states, you see such disparities of wealth where the ruling class and their “friends” are extremely wealthy while the people move into poverty.
You are correct. Communism, in a nutshell, nationalizes everything. Fascism assumes effective control (but not ownership usually) of businesses through regulation, directives and oppressive coercion.
A clear example might be the government requiring banks to loan good money after bad to low-life no-goods who have no snowball’s hope in hell of paying off the loan.
With fascism, when something goes wrong, the government stands back and blames those damned greedy capitalists. With communists, the government blames everybody and then comes up with another 5-year plan or some kind of bailout, QE or the like. Sound familiar?
To be clearer. I understand cronyism, but I am vague as to how the idea is communism related.
First, there is the Free Market. Some people call this Capitalism, but I think there is a difference. The Free Market consists of people choosing to buy and sell, without other influences (taxes, regulations, tariffs, etc.). Sadly, a true Free Market probably only exists in a system of Anarchy, and although I 100% support the notion of a truly Free Market, I would certainly have concerns about Anarchy.
Capitalism: People use money to buy goods and services and also means of production. This really requires a legal framework. The stock market, for example, just would not work unless there were laws telling people what kind of behavior was illegal, unethical and unacceptable. The government, then, has a necessary role under Capitalism to make sure that financial dealings are above board.
Crony Capitalism: also known as Fascism. It is a form of Collectivism, and can be seen as a type of Socialism. I think calling it "communist" is incorrect, since goods are NOT owned in common. The basic idea is that powerful businessmen make deals with powerful politicians. The businesses support the government, if the government supports the business. The bailout of General Motors is a prime example of this. It's all about friends, and special deals. Workers receive no benefits here, they are simply pawns as The Powers That Be game the system in order to increase their own power and wealth. The "selling point" of Crony Capitalism is that everything is done "for the common good". It's "for the children" because the powerful people "care about society". But this is all BS. They only care about their cronies.
About 100 years ago, Hillaire Belloc and GK Chesterton wrote a series of books explaining that Capitalism, due to it's necessary framework supported by government, would inevitably drift toward tyranny. The word Fascism didn't exist at the time, but that is the danger they saw. They also said that Socialism (very popular idea circa 1910) would inevitably drift toward tyranny because people would figure out how to move the levers of power to influence both government and productive forces. Again, this gets us closer to Fascism.
My opinion: an emphasis on LIMITED government is the only way to have any sort of ethical, regulated economy, without too much chance that cronies will take over the system and turn it into their own private playground of influence. Big Government invites looters. Small government is hard to manipulate.
In a sense it the state picking favorites in the market place and handing over cash to help them and to harm its competitors.
Atlas Shrugged is probably the most comprehensive depiction of crony capitalism you could ever get.
Indeed. The old analogy holds true --
Take 10 gallons of fresh water and add 1 gallon of sewage -- the result is sewage.
Take 10 gallons of sewage and add 1 gallon of fresh water -- the result is sewage.
Cronyism quickly corrupts social systems and immediately turns it all bad.
Think just Cronyism.
A billionaire pal who could build his own solar panel business with his own money, rather goes to the dear leader for taxpayer money [ capital ] to build the mess.
Then, the billionaire gives campaign cash to the dear leader in trade.
The solar scam goes broke with the taxpayers holding the bag.
Not only Solyndra = several others.
Sarah Palin was with a guy on the town council in Wasilla, Alaska years ago who ran the only trash collection business around.
He introduces legislation to require trash collection in town.
In more recent years we have the pharma industry getting taxpayer dollars through Medicare Part D (W Bush) and profiting from Obamacare.
TARP bailing out financial services in this country from George W. Bush.
Obama bailing out GM.
Obamacare which was first done in Massachusetts by Mitt Romney makes everyone buy private health insurance helping out that business.
Large bucks also get pumped into big hospital groups because of Obamacare.
Health care stocks are outperforming others because business and government colluded to give us Obamacare....
The first time I heard the term used was relating to the Marcos regime in RP. (Early 70’s).
Marcos’s buddies were referred to as Cronies and they were favored with bank loans that were guaranteed by the government for various projects which were usually inflated generating immediate returns to a Swiss bank account. The same type of transactions and Crony Capitalism infected other SE Asian countries after they found out how easy it was to borrow from Western Banks with a government guarantee.
The same technique has been used to fund many of the so called “green” development in the West. Same bad and corrupt results.
Thanks for the help!!!! The “hitch” was government involvement. Crystal clear now. Opened my eyes and now several previous posts that I had read make perfect sense.
I’ve heard the term “crony capitalism” attributed to Adam Smith. There is no doubt that it has been gaining in popular usage since its use by the Democrats to attack Reagan. It’s been even more popular since Bush II.
add onto what others may have posted that Crony Capitalism is economic fascism. Select businesses are given sweetheart deals or legislation that punishes their competition. For example... most of the agricultural legislation you hear of has been hand-crafted in smoky back rooms at the request of Big Agriculture’s K street whores (lobbyists). Most of that l3gislation aims at smashing free-market competition by punishing small farm operators with regulation that is not economically feasible to implement. That is just one example... of hundreds... thousands.
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