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Capitalism Is Never Cronyism

I hear the phrase “crony capitalism” all the time. To me this is a classic oxymoron, and a phrase likely created by manipulative political operatives seeking to obfuscate matters.  Linking the two words – “capitalism” and “cronyism” – is in fact idiotic.  Capitalism is an economic system based on private ownership of the means of production and the creation of goods and services for profit as contrasted with governmental control.  Cronyism is the practice of favoring one’s close friends.  A capitalist system allocates resources according the maximization of profit, while a cronyism system does so based upon favoring certain people, without regard to maximizing profits.  These two concepts are irreconcilably incompatible.

In fact, by definition the less capitalist a system, or the more governmental control of the means of production and the creation of goods and services, the more susceptible a society is to cronyism. Profit maximization is blind to skin color, religion, nationality, socio-economic standing, education background, or any other standing.  In fact, it is the only pure system of democratically allocating resources and opportunity across a society.  Cronyism, which is the favoring of certain people by other people, is a system that is very vulnerable to all of those discriminatory practices, and perhaps worse still, is by definition inferior to a merit-based system in determining the allocation of resources and thus doomed to result in lower levels of productivity and opportunity.  Big government, and expanded governmental powers will always result in a greater degree of cronyism.

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