Thursday, July 12, 2012

Crony Capitalism - The Degree Matters

Supporters of free markets seem to be increasingly vocal in their opposition to corporatism or crony capitalism. Whilst I wholly welcome this, I fear that the demand for a proper free market economy without cronyism or special favours is as unachievably utopian as the wildest leftist fantasy.
Read it at Stumbling and Mumbling
By Chris Dillow

Chris lays out three reasons why capitalism must in practice be crony capitalism. While I don’t disagree with his premise, or even necessarily the conclusion, a more subtle point I would note is that it’s ultimately about degrees. Even if one accepts that capitalism will involve some level of cronyism, that argument suggests nothing about whether cronyism will be limited to a few minor inconveniences or become so widespread as to discourage trust in practically any dealing. The differences between these two outcomes and the vast area in between are, in my opinion, the reason debates among free marketers and those favoring regulation are so meaningful. Any economic system will likely involve some manner of cronyism. Therefore, fighting to reduce the degree of its persistence is and will remain an extremely worthy cause.

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