Posts tagged with: Crony capitalism

Radio Free ActonThis week on Radio Free Acton, Michael Matheson Miller takes the interviewer’s chair for a conversation with David Bromwich, Sterling Professor of English at Yale University, to discuss the thought of Edmund Burke in the wake of the release of Bromwich’s first volume of what will be a two-volume intellectual biography of Burke. This week’s conversation touches on Burke’s view of the human person, his thoughts on progress in the arts and sciences, and his role in the modern conservative movement. And like Bromwich’s biography, this podcast will come in two parts: the remainder of the conversation will be yours to enjoy next week.

To listen to Part 1 of Miller’s interview with Bromwich, use the audio player below.

[Part 1 is here.]

In his case against capitalism, Wendell Berry argues that the average person not only is anxious because he depends upon so many other people for his wellbeing (truckers, utility companies, etc.) but that he ought to be anxious. There’s a grain of truth here. We shouldn’t become helpless sheep without a clue what to do were the power to go down for a couple of days in January. But inter-dependency, far from a sign of cultural sickness, is the mark of a healthy society, one where enough trust exists to allow for broadening circles of productivity and exchange, for markets that extend beyond clan and tribe. (more…)

[Part 1 is here.]

Even a cursory look at the annual list of the freest and least free economies in the world suggests a strong correlation between economic freedom and the prosperity of its citizens, including its poorest citizens. But there’s another correlation that tends to capture the attention of those making a cultural critique of the free economy. They note that America is economically free, and that it’s experiencing cultural decay, so they conclude the first causes the second. The conclusion isn’t absurd, but it also doesn’t follow necessarily. Sometimes correlation is due to causation, and sometimes it isn’t. To avoid confusion and false conclusions, we need to distinguish the idea of economic freedom from some things it isn’t.

A lot of people view economic freedom as synonymous with big corporations cutting sweetheart deals with politicians to suppress competitors and consumer choice. This stuff goes on all the time, of course, but it isn’t economic freedom. It’s the leviathan state and big business colluding to manipulate the market, to stack the deck in favor of political insiders. Every market economy on the planet has some of this sort of thing, since economies are operated by fallen human beings. The question is, where does cronyism tend to be the worst? (more…)

Blog author: jcarter
posted by on Wednesday, March 26, 2014

Many who reject capitalism in favor of some “third way” do so because they often mistake it for government-corporate cronyism, says Jonathan Witt in this week’s Acton Commentary. But in countries that have begun extending true economic freedom to the masses, capitalist activity has already lifted hundreds of millions of people out of extreme poverty.

Happily, a new piece in The Economist magazine offers some helpful medicine for the confusion, insisting on the distinction between cronyism and capitalism while also pointing to some hopeful signs that a rising middle class around the globe is gaining the clout to fight the power structures that still wall millions out of the wealth creation game. My reservation about the article is that it misreads America’s Progressive era, and in the process, leaves cronyism’s favorite trick unexposed.

According to the piece, crony capitalism in America “reached its apogee in the late 19th century, and a long and partially successful struggle against robber barons ensued. Antitrust rules broke monopolies such as John D. Rockefeller’s Standard Oil. The flow of bribes to senators shrank.” Later, it tells readers that while developing countries are making progress against cronyism, “governments need to be more assiduous in regulating monopolies.”

The full text of his essay can be found here. Subscribe to the free, weekly Acton News & Commentary and other publications here.

Blog author: ehilton
posted by on Thursday, March 6, 2014

Comedian Andrew Heaton uses the move “Dallas Buyer’s Club” to explain economic issues, brought to life on the silver screen. Enjoy!

Blog author: jsunde
posted by on Tuesday, February 25, 2014

facebook_ad_large_1On-demand ride-sharing services such as Uber and Lyft are on the rise, allowing smartphone users to request cab drivers with the touch of a button. But though the services are popular with consumers and drivers alike, they’re finding less favor among their taxi-company competitors and the unions and government bureaucrats who protect them.

Calling for increased regulation, entrance fees, and insurance requirements, competitors are grappling to retain their privileged, insulated status. In Miami-Dade County, an area with particularly onerous restrictions and regulations, Diego Feliciano, president of the South Florida Taxicab Association, argues that the change is bound to “ruin the very thing it’s trying to improve,” all because it threatens the fat cats who pay his salary, and who can afford to jump through the regulatory hoops. “When looking at new technologies,” he writes, “we must also be sure people’s basic civil rights and the safety of the riding public are protected.”

Bringing these petty municipal battles into the limelight, actor Ashton Kutcher, an early investor in Uber, recently appeared on Jimmy Kimmel Live, decrying “antiquated legislation,” “old-school monopolies,” and “old-school governments” who continue to stand in the way of innovation and consumer demand. In areas like Miami, Kutcher says, there is a “Mafioso mentality” against letting the “new guys” in.

Indeed, as Miami’s Feliciano aptly demonstrates, the protectionist mindset only sees what is, viewing economic activity in static and self-centered terms, and failing to recognize or value the type of opportunity and possibility that comes with increased freedom and ownership. Feliciano claims that he’s interested in “safety” and “basic civil rights,” but the only folks being protected are those with power and pocketbooks. (more…)

A recent report from the CBO contains an appendix detailing updated estimates of the labor market effects of the Affordable Care Act (ACA). Pundits for and against the ACA have wasted no time in putting their own particular spin on the projections. Republicans and some other opponents have seemingly celebrated the idea that these estimates may show that the ACA is “a job-killing, economy-crushing villain,” while Democrats and some other supporters have claimed that in times of high unemployment, it’s “an economic benefit” that some will be voluntarily reducing hours or dropping out of the labor force because that means greater demand for labor — those currently unemployed would therefore have more options.

So who’s right? These are mutually contradictory claims, or so it appears. The report is ultimately limited and mixed, but nevertheless raises some serious concerns, caused, in part, by the polarization of Congress both when the law was passed and up to the present. (more…)

Fighting off entrepreneurs! Taking on any threat to their power! Collect ‘em all!

Blog author: ehilton
posted by on Tuesday, January 14, 2014

cronyismActon’s Director of Research, Sam Gregg, discusses crony capitalism in today’s issue of The American Spectator. Gregg says 2014 looks to be the year of “inequality” economically-speaking, and that we must not forget the threat of crony capitalism.

Crony capitalism is an expression that’s used a great deal these days, so let’s be clear what it means. Crony capitalism is not criminal activity or outright corruption — though it verges on, and often enters, these spheres. Crony capitalism is about hollowing-out market economies and replacing them with what may be described as political markets. (more…)

healthcare.gov-crash-1As everyone from political pundits to late-night talk show hosts have pointed out, HealthCare.gov, the flagship technology portion of the Affordable Care Act (aka Obamacare), went live a couple of weeks ago — and was a complete failure.

A very, very expensive failure.

Andrew Couts points out that taxpayers “seem to have forked up more than $500 million of the federal purse to build the digital equivalent of a rock.”

Clouts puts that figure in perspective by comparing it to other websites:

Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $500 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.

Why did the government spend a half-billion on the equivalent of a 404-page? Because of crony capitalism. Mike Masnick lists the political cronies who were hired to build the site despite having a “long history of screwed up giant IT projects”:
(more…)