Note: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.
The Term: Crony capitalism (sometimes referred to as cronyism or corporatism)
What it means: Crony capitalism is a general term for the range of activities in which particular individuals or businesses in a market economy receive government-granted privileges over their customers and/or competitors.
Why it Matters: For as long as there have been government officials, there have been economic cronies—friends, family, and associates who use their connections for their own financial gain.
In ancient Israel, for example, when the prophet Samuel appointed his own sons as leaders, they began to engage in cronyism: “[Samuel’s] sons did not follow his ways. They turned aside after dishonest gain and accepted bribes and perverted justice.” (1 Samuel 8:3).
Unsatisfied with these corrupt leaders, the elders of Israel asked Samuel to appoint a king over them. God told Samuel to warn the people of the consequences, which included even worse forms of economic cronyism: “[The king] will take the best of your fields and vineyards and olive groves and give them to his attendants. He will take a tenth of your grain and of your vintage and give it to his officials and attendants” (1 Samuel 8:14-15).
We read passages like that and instantly recognize this as unfair and unjust, a corrupting influence on both the people and the government. Yet we tend note to even notice the cronyism that occurs in our own economic system. Because the “dishonest gain” is often more subtle than the examples found in the Bible, we often do not recognize cronyism because we don’t know what to look for.