Reconsidering: Who are cronies?

Political discourse in the west seems to be an endless series of turf wars: the “poor” vs. the
rich, the “workers” vs. the CEOs, people vs. corporations. The all-powerful judge, jury and
executioner in these wars, who gets to decide who wins, who loses, and by what margin, is
the government. But the one question that never seems to come up in these discussions is
the most fundamental question in political philosophy: what is the legitimate role of

This question, for many advocates of capitalism, presupposes an idea that isn’t even considered – let alone accepted – by most people: that the power of the state to initiate force should be severely limited, if not eliminated altogether.

Since this view is so unpopular, not many would question, for example, a petition of
residents to the local council, opposing a private development in their area, even if the landis privately owned by the developer. Yes, this is the government wielding its power to play favourites, but as long as it is siding with the perceptibly weaker side, certainly when pitted against “big business”, then government is “doing its job”.

When dealing with the question of government-provided healthcare and other welfare programs, the question of the role of government disappears completely. Questions about whether the NHS should exist are considered blasphemous, and whenever the Conservative Government makes cosmetic cuts to benefits, they are accused of killing poor people.

In this sense, cronyism is just one of the less popular manifestations of a highly popular
practice: the practice of the political class playing puppet master with all of us, while we
pretend we can make a difference in their game with the occasional noisy protest, or by
voting out less convincing politicians and replacing them with ones who may not be
completely identical, but come pretty close.

But if the government is allowed to use force against its citizens in order to feed the hungry
and cure the ill, how can we deny it the power to use force to help the incompetent succeed?
A company, as such, can’t force you to purchase the goods it produces or the services it offers. It can attempt to convince you that they are superior to the ones offered by its
competitors, and when such attempts are successful, so is the business. But as soon as
political power is introduced into the equation, the rules of the game change drastically. All of a sudden, what matters isn’t how good you are, it’s how powerful the people you know are.
This is the essence, not just of cronyism, but of statism in general. In every area of our lives, the government has the final say. So what if, in the case of cronyism, the beneficiaries aren’t always the weakest players in the field (this is the case with welfare as well), or if the reason a particular business receives a subsidy or tax break isn’t “need”, but a mutually beneficial relationship with a bureaucrat or a politician? What really matters is that in a mixed economy, we’re all forced to fight for the same “prize”: not our right to live our lives the way we see fit, but our “right” to the favour of whichever politician happens to be in charge of allocating whatever it is we want. What could only be obtained by trade in a free market, requiring work to produce a tradable value, can now be obtained by befriending the right people.

Any attempt by advocates of Laissez-Faire Capitalism to argue against cronyism without
addressing the fundamental question of the role of government would amount to an implicit acceptance of the widely held view, that politicians and bureaucrats shouldn’t be limited in their power, as long as they use it for causes accepted by the majority at the time as “just”. But once the initiation of force is rejected in principle, all of its by-products, the popular ones and the not-so-popular (such as cronyism), will be rejected with it.

“It is only in a so-called mixed economy that a coercive monopoly can flourish, protected
from the discipline of the capital markets by franchises, subsidies and special privileges from
government regulators.”

Alan Greenspan

One Comment

  1. Normally it is ideology, not corrupt lobbying, that leads to government spending or regulations.

    Specifically “help the poor” ideas for government spending (most government spending is on the Welfare State – even in the United States military spending has never taken a LOWER proportion of the Federal budget, although if one listened to some libertarians one would get a radically different impression) and “protect the consumer” and “protect the worker” ideology for regulations – see Milton Friedman’s “Free to Choose”” (1980 – sadly things have got worse since then)..

    However, corrupt lobbying DOES occur – and it does have harmful effects.

    Witness how corrupt lobbying directs how the E.U. gives grants, and how corrupt lobbying causes regulations that “protect” German industrial players from competition.

    The way to get rid of this is indeed to radically reduce the power of the state.

    Not just by getting out of the E.U. – that should go without saying among libertarians.

    But also by fundamentally reducing the power (the interventionism) of the British government.



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