By Mike Cronin

No doubt you’ve heard the term “crony capitalism.” It’s a “weasel word.” Weasel words are terms or phrases that are used to steer your thoughts or beliefs away from the hard truth.

As I’ve discussed elsewhere, both of the dominant political philosophies in American discourse today, liberalism and conservatism (each weasel words in their own right, to discuss in separate posts!) tend towards the collectivist end of the political spectrum vice the individualist side. Neither school wants fully unchecked free market capitalism. The liberal school believes capitalism is exploitative, but it knows that without a productive economy that is at least semi-free, there will be no wealth to “redistribute.” The “establishment” branch of the conservative school professes to hold capitalism in high regard, but has never given up political power by totally de-regulating our economy and giving us a truly free market, despite having had occasional chances to do so. (The “Tea Party” branch of conservatism espouses capitalism and free market economics, but it has yet to achieve enough power in Washington to affect any changes to our mixed-economy system.)

Hence, members of both camps use the term crony capitalism in place of the term “corporatism” as a way to attach a negative connotation to pure capitalism. Corporatism is the result of industries, large corporations, unions, and other pressure groups essentially “buying” the laws and taxes and tariffs they want in order to change the game against their competitors. The competitive principles of bringing the best product to the buyer at the best price are replaced by using the coercive power of government to penalize or prevent the activities of newer, smaller or foreign businesses, or to rake in subsidy and bailout money.

Capitalism, and the free market, is the politico-economic system that develops as a natural result of government that recognizes and protects individual rights and liberty. It rewards achievement and is free from governmental coercion. We have never had a fully free and unfettered market in the US, yet our greatest periods of economic growth and prosperity have occurred during the times when our market was freest and our government was most constrained. China has risen to become the world’s second largest economy over the last 30 years because it shed many aspects of communist central economic planning and adopted some free market reforms. If China ever allowed its 1.4 billion people the same amount of political and economic freedom as we have enjoyed from time-to-time in this country, it would easily eclipse the US as an economic power. In essence, China’s rise is commensurate with the degree it has adopted free-market economic principles, and the decline of the US is commensurate with the degree corporate and other pressure groups, via government coercion, have shackled our economy.