What is Cronyism?

In a free society, the role of business is to create value for society by producing products and services that their customers consider beneficial.

Cronyism diverts resources away from the wants and needs of consumers and toward political purposes. Cronyism occurs when an individual or organization colludes with government officials to create unfair legislation and/or regulations which give them forced benefits they could not have otherwise obtained voluntarily. Those benefits come at the expense of consumers, taxpayers, and everyone working hard to compete in the marketplace.

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Cronyism in Your State

This map shows how many stories about cronyism we have in each state (click on your state to see the stories).

Cronyism harms society and threatens economic freedom, which is the key to greater opportunity and an improved quality of life.

Legislation

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Because of the power and resources the government has, special interests are incentivized to help create or modify legislation to give them favors at the expense of everyone else.

Corporate Welfare

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Corporate welfare occurs when an individual or organization receives a specific favor of money or tax benefits from the government. Tens of billions of dollars are spent on these special favors each year!

Occupational Licensing

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When you are forced to have a license to work in a certain occupation, the licensing agency has lots of power. This power is often abused when the existing licensed businesses work with the licensing agency to either prevent new businesses from obtaining licenses, or increase the restrictions on the trade, shutting out competition.

Subsidies

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Subsidies are direct payments from the government to special interests. These payments are often a poor way to spend taxpayers’ money, including expenditures such as hundreds of millions of dollars to filmmakers.

Bailouts

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If a business doesn’t produce products or services that consumers want, it eventually goes bankrupt. Unless the business is politically connected, in which case it often receives a bailout from the government to keep operating.

Tariffs

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Tariffs are taxes on national imports. The government can use these taxes to protect favored industries from foreign competition.

Government Loans

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Government loans are generally loans that are at below-market rates or to companies at significant risk of defaulting. Cheap loans are one way the government plays favorites.

Revolving Door

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The revolving door refers to the movement of personnel between regulatory bodies and their regulated industries.

Types of Cronyism:

Because of the power and resources the government has, special interests are incentivized to help create or modify legislation to give them favors at the expense of everyone else.

Corporate welfare occurs when an individual or organization receives a specific favor of money or tax benefits from the government. Tens of billions of dollars are spent on these special favors each year!

When you are forced to have a license to work in a certain occupation, the licensing agency has lots of power. This power is often abused when the existing licensed businesses work with the licensing agency to either prevent new businesses from obtaining licenses, or increase the restrictions on the trade, shutting out competition.

Subsidies are direct payments from the government to special interests. These payments are often a poor way to spend taxpayers’ money, including expenditures such as hundreds of millions of dollars to filmmakers.

If a business doesn’t produce products or services that consumers want, it eventually goes bankrupt. Unless the business is politically connected, in which case it often receives a bailout from the government to keep operating.

Tariffs are taxes on national imports. The government can use these taxes to protect favored industries from foreign competition.

Government loans are generally loans that are at below-market rates or to companies at significant risk of defaulting. Cheap loans are one way the government plays favorites.

The revolving door refers to the movement of personnel between regulatory bodies and their regulated industries.

Legislation

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Corporate Welfare

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Occupational Licensing

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Subsidies

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Bailouts

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Tariffs

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Government Loans

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Revolving Door

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I Want To Be A Crony (Video)

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