from AEI Ideas, Cronyism is just as threatening to free enterprise as big government, by Arthur Brooks and Daniel Rothschild | August 29, 2012


Statism and cronyism are fundamentally about the same things: Letting political power allocate economic resources rather than markets. Both reduce competition and entrench stagnation. They hurt ordinary consumers, squash the process of creative destruction, suffocate honest entrepreneurs, and make America more like Greece. Cronyism is not free enterprise, it’s not fair, and it’s not the American way.


Cronyism is just a form of statism since they require government power to sustain their special privileges. The difference is that the private crony is less accountable to the taxpayer.  Cronyism is an old problem and it is likely a natural alliance between different forms of power.  However, it is not inevitable:  huge companies like Apple delivered exceptional products and created powerful entities with little or no government assistance.

There is a fine line between companies who profit from political influence and privatization efforts that contract private firms to do public work.

tips to Robert Cain