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.
Easy. Any enterprise that needs sustained government intervention to exist.
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.
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....
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.
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.
You have to try to understand the folk sayings of Sarah Palin.
Crony-capitalism and lame stream media are probably the two best known.
Crony capitalism is best defined as a system of corruption related to the current Oligarchy that rules the U.S.
1. This alleged alternative energy company with close ties to Obama gets $750 million in taxpayer dollars, which they spend on a palatial office and manufacturing plant on I-880 in Fremont, CA. Unsustainable, they go out of business within a year.
2. The government tries to drive up the costs of conventional energy in order to make preferred businesses more profitable. See Keystone XL pipeline and oil drilling bans.
You can summarize it with the phrase "government picking winners and loses."
-PJ
It means the powerful give contracts to their buddies
This is how I explained it to my wife:
Crony Capitalism is Puplic Elected or Appointed Officials like (federal congressmen, state congress, county commissions, mayors, city/town commissioners, dog catchers on down the line), working in concert with private enterprises/corporations to fill their own pocketbooks and increase personal and economic power without regard to any adverse effects their complicity may have on “We The People”, It is suppose to be illegal but it is an effective CYA system, hard to catch because the entire justice system is involved especially Police, DA’s, and Judges, it used to be somewhat hidden but now the infection is so bad it is obvious, and what is sad it cannot be fixed under our current one party political system.
An economical system of “You Rub/Cover My Back and I’ll Rub/Cover Yours” anyone and everyone else be damned.
CC is deeply entrenched in our gov’t top to bottom and will eventually lead us into being a third world country, we are already on the fast track to a heavy hard fall.
1. Overturning 200 years of contract law and moving the labor union ahead of secured bond holders in the bankruptcy proceedings.
2. Disbanding long-established dealerships run by Republicans and giving those markets to Democrat campaign donors.
-PJ
Crony capitalism is what Hitler and the Nazi’s had; the close alliance of key corporate interests and government. It is clearly what we have now between the US Government and the too-big-to-fail or jail Wall Street Banks and Banksters, Government and International corporate interests, and Government and the military industrial complex of businesses.
Pork, special favors from politicians that help you financially (but not everyone), bailouts, subsidies, your own line in the tax code.
"Oligarchy" is the word that comes to mind and seems to be what our world has morphed into, regardless of what each nation was at the end of WWII.
Maybe it's always been this way?
Economic inequality, can be the product of government coercion as occurs under feudalism and socialism, or as the result of any other arrangement, such as mixed economy, under which the government grants privileges or imposes arbitrary burdens. This sort of economic inequality is of radically different character from that which occurs under a free market,and is not only unnecessary, but positively inimical to a free modern division of labor society.