In an interesting and informative article, fellow WB writer Ari Silverstein wrote an article on “Crony Capitalism.” The debate was informed and vigorous, not including, of course, the usual trolls who cannot accept any facts that didn’t come from some recent internet genius who has redefined all knowledge and insisted that the classically trained people who cited “The Wealth of Nations” as being archaic and behind the times. Likewise for those of us who read Keynes, Samuelson, Friedman, et. al. We’re just duped morons stuck in the past while the brilliant “new thinkers” of the internet rewrite history, economics, political science, psychology, sociology and other areas strongly influenced by their ideology and rationalizing their positions by insisting everything written before was ideologically driven and we just don’t recognize it. Any respectable professor would, after the hysterical laughter died down, tell them to stop trying to cite “facts” created by people with sketchy credentials and agendas they aren’t willing to admit to having. Feel free to quote this first paragraph and point out any flaws, but people like Smith, Friedman, Keynes, Samuelson and others weren’t reprinted because their ideological positions prevailed, they were reprinted because they made sense and their theories had validity. On to crony capitalism.
One point missed by seemingly everyone was one of the more elitist things that crony capitalists do, and because they do it, they are no longer capitalists. Aside from insider tips that yield millions (yes, those of you who wish, please come on and defend those criminals and insist that every time it happens it is an “isolated incident”) and bailing each other out, like the bailing out of Brian Hunter described in my article “A Face and Name to Free Market Corruption,” they practice “crony elitism.” To describe the elite cronies as capitalist would be a description they not only do not deserve but would be an insult to people who actually are capitalists.
What I am talking about is the cronyism that they share with each other and protect each other from things like competition and free markets. From a personal perspective, I was working (temp job, like so many of the jobs in this economy) with a firm that needed something done rather quickly locally. When the job crossed my desk, I called a friend of the family and had the issue resolved in a matter of minutes. My millennial boss was rather upset, because he was supposed to slave over the problem for hours and prove what an exceptional manager he was by resolving it. The firm the friend of the family owned gave no discounts, it was just a specialty of their company and they addressed the problem quickly and easily. All of this, of course, generated only resentment from my millennial boss, but that’s another essay.
The reason for the Sherman Antitrust Act was because in the late 19th century there were things called trusts that controlled businesses with interlocking directorates. I won’t debate the value of the Sherman Antitrust Act; it was enacted because people who were elitists who insisted that they were capitalists were defying the ideals of free markets and just making deals between themselves and leaving everyone else out of the loop, as well as the country club and all of the other elitist organizations to which they belonged.
The “crony capitalists” don’t believe in free markets when they have favorite friendly firms to which they will direct all commerce. They even take the bids of many companies, all of which have no chance because the deal has already been struck, and the schmucks who are bidding and think they have a chance are just laughed at as fools. Capitalism to the people who believe in it is great, but to the elites it does not apply. As mentioned, the elites take open bids, but the decision has already been made; the contract or the work is going to a friend of theirs, another elitist. They have wonderful things to say about the free market, none of which applies to them or their cronies. They advise of takeovers and buyouts months or even years in advance, thus having too much time for the SEC (Securities and Exchange Commission) to have any case. They hire the people they know, even though they advertise open positions that aren’t really open, they just say it is, like the work they take open bids on. The game is rigged, boys and girls, and to no one’s surprise certain people always win. They are the elites, and they deserve it. They hire their friend’s scions because they went to the same selective schools, as did their father and their father, and on and on. They love capitalism, especially when free markets and competition mean nothing because they have the power to set prices, choose who will work for them and with them, and know that capitalism is just a façade that they use to gain more wealth. These elites are the other side of crony capitalism, the elite cronies to whom free markets mean nothing, nor does competition.
They aren’t capitalists, and never were, they’re the elites who obtain wealth not through competition, or by what they know, their fate is determined by who they know and nothing more. There are names that I could name here, but I’ll leave that to the commentators. Ari, there is another side to the crony capitalists, and they are the cronies who protect each other’s wealth at the expense of Joe Sixpack. When what you know and what you have experienced mean nothing and someone gets the inside on the job that has nowhere near the education or experience you have, think of this article and the descriptions made here. Competition is great, but it’s harsh, competitive, and, gasp! you might even lose. Better to be an elite who has the red carpet stretched out several miles in front of them, with competition just another lip service phrase to disguise and justify how you screw Joe Sixpack. They aren’t capitalists, and haven’t been for several generations.