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Tag Archives: Crony capitalism

Anti-cronyism humour – the TARP song (2009)

The TARP song, which shows people can find a way to laugh at most things (contains moderate bad language): TARP is the Troubled Asset Relief Program, a massive bailout in the USA. In a similar vein, The Spectator recently reported a truth about current monetary policy: QE — the ultimate subsidy for the rich. All this is something I have written and spoken about many times — e.g. If this is capitalism, I am not a capitalist. Crony capitalism must […]

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Ending crony capitalism – how markets work

Crony capitalism — businesses capturing the state for commercial advantage, serving politicians and officials instead of the public — ought to be brought to an end. A prerequisite to that is a good understanding of how social cooperation in the market works. Israel Kirzner’s, How Markets Work: Disequilibrium, Entrepreneurship and Discovery (PDF) provides a brief and readable explanation. From the book’s page at the IEA: Human action consists of ‘grappling with an essentially unknown future’, not being confronted with clearly-specified […]

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Crony capitalism – how big players spoil social cooperation

Again and again, I hear managers ask government for stability. You can’t make plans for capital investment and business without expectations about the future. Government sets up big players in society which not only set expectations through tax and regulation, but which can change their minds, spoiling people’s plans, often at considerable expense. Roger Koppl’s Big Players and the Economic Theory of Expectations makes a study of that theme. Koppl demonstrates, with extensive reference to other scholars, that investment and all other […]

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Contemporary crony capitalism – Living with Leviathan

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For a contemporary and historical account of the scale of the state and its relations with nominally private business, I recommend David B. Smith’s excellent Living with Leviathan: Public Spending, Taxes and Economic Performance: In the last 90 years the proportion of national income spent by the UK government has increased from around 10 per cent to nearly 50 per cent. This general trend has been followed in most other developed countries, although levels of government spending are much higher in […]

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How crony capitalism happens – public choice theory

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It’s common for politicians and officials to discuss “market failure” before setting out how the government will correct those failures. However, government fails too and with widespread, profound consequences for us all. Why? Dr Eamonn Butler’s Public Choice – A Primer explains how Public Choice Theory applies the methods of economics to the theory and practice of politics and government to provide important insights into the nature of democratic decision-making. Just as self-interest motivates people’s private commercial choices, it also affects […]

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Crony Chronicles

I’ve just discovered  Crony Chronicles – the cronyism resource, In an economically free society, the role of business is to create value for society by producing products and services that their customers consider beneficial. If they do this while using resources wisely, they make a profit, and societal wellbeing is enhanced. Cronyism diverts resources away from the wants and needs of consumers and toward political purposes. Cronyism occurs when an individual or organization colludes with government officials to create unfair […]


Who Exploits You More: Capitalists or Cronies?

Via Learn Liberty, Who Exploits You More: Capitalists or Cronies? See also this short book on how political decisions come to be made: Public Choice – a Primer by Dr Eamonn Butler. Or watch Yes, Minister.

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Luigi Zingales – Capitalism for the People: Recapturing the Lost Genius of American Prosperity

This morning, I had breakfast with the engaging and insightful Luigi Zingales, Professor of Entrepreneurship and Finance at Chicago Booth and author of Capitalism for the People: Recapturing the Lost Genius of American Prosperity. Via Amazon: A rising star in economics takes a forceful and sometimes personal look at how pro-business forces overwhelmed the pro-market principles that made American capitalism great, and how to get it back on track. Born in Italy, University of Chicago economist Luigi Zingales witnessed firsthand […]

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The CPS demonstrates smaller government is better for society

Via the CPS, a report and video, explaining that small (though not that small) government is better for society: Tim Knox, Director of the Centre for Policy Studies, commented: This paper shows that smaller government results in higher growth – making a mockery of the current austerity vs. growth division. This should give our politicians confidence to pursue a smaller state to achieve long-term, lasting prosperity. There is extensive evidence both in this report and from the 2020 Tax Commission, […]

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Banker and economist to explain to Occupy St Paul’s how bankers falsify profits and misappropriate bailout funds

Tomorrow, Saturday December 10th at 1.30pm, my colleagues Gordon Kerr and Kevin Dowd will appear on the steps of St Paul’s Cathedral to explain how bankers falsify profits and misappropriate bailout funds for personal benefit. Kerr will set out: How derivatives transactions are structured to game flawed accounting rules and Basel regulations and create illusory profits and capital; How Basel rules, although deeply flawed, cannot actually function given the present false accounting system; A specific example of how his team […]

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