Acton Institute Powerblog

Where Billionaire Crony Capitalists Live

Share this article:
Join the Discussion:

Free weekly Acton Newsletter

cronyIt’s never easy becoming a billionaire, but the path to achieving a 10-figure level of wealth is smoother when you have the government as a business partner.

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 or competitors. Certain industries (like casinos and real estate) and some nations (Russia, the Philippines) are more prone to cronyism than others. So if you want to become get ultra-rich it helps to be an business and country (e.g., an energy company in Mexico) where the government will you gain an advantage in the market.

The Economist has put together an interesting interactive infographic showing where crony capitalist billionaires live around the world. As they explain:

Using data from a list of the world’s billionaires and their worth published by Forbes we label each individual as crony or not based on the source of their wealth. Industries that have a lot of interaction with the state are vulnerable to crony capitalism (a full list of industries is provided in the table below). These activities are often legal but always unfair (Donald Trump, a casino and property tycoon, earns the 104th spot in our individual crony ranking). We aggregate the billionaires by their home country and express the total wealth as percentage of GDP. The results are presented above for 22 economies: the five largest rich ones, the ten biggest for which reliable data are available and a selection of other countries where cronyism is a problem.

The United States ranks rather low on the list, but mostly because we have both a large economy and a lot of billionaires (whose wealth as a percentage of GDP) comes from non-crony sectors. In some countries, like Malaysia, the only billionaires are the ones that in crony-related industries.

Overall, though, crony-based wealth is on the rise: the worth of billionaires in crony industries soared by 385 percent between 2004 and 2014, to $2 trillion.

Enjoy the article?

Click below to view our latest and most popular posts!

Read More

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

Comments