In the last Crony Capsule we saw the different way cronyism manifests itself at the local level; relationships with state politicians and regional tax exemptions are a few examples of how local states “benefit” local industries. Now we are focusing on the global economic and social consequences of corporate welfare and cronyism.
Cronyism has been growing like a disease inside our competitive capitalist system. Instead of having an economy based on performance, quality and innovation, cronyism has lead to special connections and lobbying.
The following articles provide us with an overview concerning how cronyism undermines our society and our capitalist system:
1. In this comprehensive article, James V. DeLong the author of the book Ending ‘Big SIS’ (The Special Interest State) and renewing the American Republic; summarizes the major subjects concerning his book and stresses the problem we face today in keeping special interest groups away from receiving corporate welfare from the government.
“Some commentators are under the illusion that the current national crisis will sober up the special interests. But that is not how it works, because a crisis makes special interests less, not more, responsible. The situation becomes, in the language of game theorists, a “last-period problem.” As a game approaches an end, the players have no need to cooperate for the sake of protecting long-term relationships. Their incentive is to grab as much as possible before the game ends, or, to translate to the real world, before the society collapses. Do not look for crisis to bring out a sense of responsibility in the advocates for the interests.”
2. The following article focuses strictly on the current identity crisis that American Capitalism is suffering. Our capitalist system that was once primarily based on hard-work, competitive and innovative companies, and entrepreneurship has degraded into clientelism, favoritism and special political connections.
3. In this column, we see the way in which society currently perceive our new form of “crony-capitalism”. It is easy to understand people’s anger against our current system, where political connections often mean more than value creation.
“As we witness the riotous dissolution of corrupted capitalism, we need not wait for the history books to identify the mile markers of self-destruction. If we are to rebuild capitalism, even as it is tearing itself down, then we will need to become street-smart detectives in analyzing the current economic murder-suicide in progress.”
4. The last article deals with the immorality of corporate welfare. This general overview seeks to demonstrate the negative potential that cronyism possess to undermine our system of meritocracy.
“When you think about the thousands and thousands of lobbyists in our nation’s capital who become “cronies” with members of Congress, the insider deals they make, and what it is costing the American taxpayer, you can see the evil of it. To have good government, we must have transparency, often promised but seldom received. As voters, we must hold all those elected to office to a higher standard. “We The People” must take our nation back and vote people out of office when they are guilty of “cronyism,” as this will send a powerful message. It has always been true: “Righteousness exalts a nation but sin is a reproach to any people.”