Perceptions of crony capitalism

This paper discusses a national survey of business leaders that sought to deter-mine how government favoritism toward particular firms correlates with attitudes about government, the market, and selectively favorable economic policy. Findings indicate that those individuals who believe they work for favored firms are more likely to approve of free markets in the abstract but also more likely to say the US market is currently too free. These individuals are more skeptical of competition and more inclined to approve of government intervention in markets. They also are more likely to approve of government favoritism and to believe that favoritism is compatible with a free market. Those who have direct experience with economic favoritism or are more attuned to such favoritism are more likely to have distorted perceptions of free- market capitalism and are more comfortable with further favoritism.

That is the abstract of a new Mercatus working paper, by Matthew D. Mitchell, with Scott Eastman and Tamara Winter.

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First!

If you benefit from government favoritism, better to spin that as free market capitalism to justify your gains. This is similar to Wall Street bankers paying themselves millions in bonuses during the Crisis of 2008 because they were the best and the brightest. The appearance of merit is very important.

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B-B good, crony capitalism bad.

However, undoubtedly some crony capitalists are more equal than others (pipeline operators don't any have choice but to get in bed with government, right?).

And in further news, the war against crony capitalism continues to go well, with B-B leading to ensure that monopolies can continue to enhance everyone's lives through the magic of market concentration, free from government interference and the evils represented by crony capitalism.

(The math equation that demonstrates how this works is left up to the reader.)

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Finance cries for government intervention where there are loses, and cries for freedom when they win. The new calls for freedom are made by cryptocurrency companies. I hope they are consistent with these calls for the next few years and not ask for intervention to save their business during the next downturn.

The 2008 "incident" was just one long exercise in "privatize profits and socialize losses".

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Of course, "crony capitalism" is what the other tribe does and is beyond the pale; what my tribe does is strengthen markets and American enterprise. It's not surprising that firms that are most favored by government are the strongest supporters of free markets. We may not be a sinful generation, but we most definitely are a hypocritical generation.

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Such is life in Trump's America.

"China Says It’s Willing to Seek Trade, Investment Deals With Brazil"

Such is life in Bolsonaro's Brazil.

https://www.bloomberg.com/news/articles/2019-03-28/china-says-willing-to-seek-trade-investments-deals-with-brazil

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Are defense industry firms favored?

Fed member banks?

Home builders?

Food industry?

Walmart, the bigest redeemer of food stamps?

Clearly almost all medical providers who get something like half their payments from government.

Government favors many businesses by ensuring they have paying customers, if government isnt their most important customer, and in many cases the customer who funds their costliest new and unproven products.

Like nuclear products. The US would have zero nuclear power plants without government promising it would force customers to pay for them.

Self driving vehicles would not exist as products in limited forms without government paying for them in the 90s when they didn't work at all.

Are you saying that government led monopsony is what causes cronyism?

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I can not understand why they keep calling this crony capitalism when it clearly is crony statism,

Under the capitalist system.

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It's not communism but real socialism =)

Do you remember the Cold War term "real socialism"? It was used to describe the yuuuuge gap between the ideal socialism from discourses and books, and the real experiences behind the Iron Curtain.

The same applies to capitalism. There's a gap between the ideal capitalism impulsed by propaganda, and the real and achievable conditions in our societies.

“Real Capitalism” ... that’s a useful phrase.

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Unfortunately most of our political leaders share this attitude of preaching free markets in the abstract but practicing favoritism when it suits them.

No wonder people in many other countries have concluded that our leaders’ freedom rhetoric is a sham.

There's a reason why lobbying (by former legislators and legislative staffers) is such a profitable business in DC.

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U.S. economy suffers massive, abitrary government interventions at all levels -- the central government even feels totally entitled to dictate the size of a personal toilet-flush to the entire population.

Socialist-oligarchy is a more accurate label than crony-capitalism.
Free Markets, by definition, are free of government coercive intervention.

Let us not get too idealistic. Even in the ideal "watchman" state, governments must decide which markets are legitimate, what the exact nature of property rights are, who is a citizen, what the age of adulthood is, and what are the limits on individual behavior that impinge on the collective, as well as determining which issues affect crime and national security. There is no single principle that gives clear answers to these. If you're an anarcho-capitalist, you're not a classical liberal anymore.

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'Free Markets, by definition, are free of government coercive intervention.'

Including being free of government enforcement of fraud as a crtme, undoubtedly.

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... basic , centuries -old, legal standards of Contract Law and Fraud are obviously independent processes from deliberate government economic interventions.

But thanks for playing.

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Some wild crony capitalism just rolled in:

https://www.thedailybeast.com/jerry-falwells-liberty-university-landed-pentagon-contract-months-after-trumps-election

The old joke has been "the writers this season.."

But seriously, the writers this season..

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Suppose Trump offers someone a $50 million penthouse no charge. To return the favor, that person perhaps could help Trump on a $300 million property no charge. The “buyer and seller” are free to do whatever they want. Welcome to the free market.

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It's Crony Capitalism because many of the private businesses petitioning for government favor are claiming to believe in free markets without any government favoritism.

Also the Realtors, AMA, banks, automakers, farmers, public workers' unions, AARP, etc.

The bigger the government gets, the more swag there is to harvest. And the government has grown so big that even in a period of unusually high growth and low unemployment it runs trillion-dollar deficits.

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