Tuesday, October 13, 2009

Crony capitalism

Excerpts from: Rhett Butler Comes to Washington by James V. DeLong

It would be wise for businesses to band together to defend free-market culture and make their money from our civilization’s rise. . .

the distinction between being pro-market and being pro-business. Much as the Left tries to conflate these, they are different indeed.

Business, especially big business, is happy with crony capitalism, franchised monopoly, or any other device that will avoid the Darwinism of the free market. Of the billions of dollars now spent lobbying, almost none supports the free market as a concept or an institution. “While everyone benefits from a free and competitive market,” Zingales writes, “no one in particular makes huge profits from keeping the system competitive and the playing field level. True capitalism lacks a strong lobby.”

Zingales has interesting things to say about the history and implications of the “serious tensions [that] emerge between a pro-market agenda and a pro-business one,” in the United States and elsewhere, and his conclusions are not cheery. He thinks the administration is “launch[ing] us on a vicious spiral of more public resentment and more corporatist crony capitalism so common abroad—trampling in the process the economic exceptionalism that has been so crucial for American prosperity.” . . .

A tipping point comes when the lobbying for special advantage turns into lobbying for programs that destroy the economic health of the nation, and this is where those billions in lobbying money are, increasingly, going. . .

Since business is business, companies can adopt the philosophy of Rhett Butler in “Gone with the Wind,” that as much money can be made from a civilization’s destruction as from its rise. Furthermore, while it might be thought to raise some problems of personal ethics, management can take the next step and say they owe it to the shareholders to help that destruction along if that is where the opportunities are. . .

So while one cannot escape one’s time, and if destruction is at hand it is reasonable to go into the salvage business, it would be wiser for businesses to band together to defend free market culture and make their money from our civilization’s rise instead.

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