Crony capitalism

Crony capitalism is an economy in which businesses thrive not as a result of risk, but rather as a return on money amassed through a nexus between a business class and the political class. This is done using state power to crush genuine competition in handing out permits, government grants, special tax breaks, or other forms of state intervention[1][2] over resources where the state exercises monopolist control over public goods, for example, mining concessions for primary commodities or contracts for public works. Money is then made not merely by making a profit in the market, but through profiteering by "rent seeking" using this monopoly or oligopoly. Entrepreneurship and innovative practices, which seek to reward risk are stifled, since the value-added is little by crony businesses as hardly anything of significant value is created by them, with transactions taking the form of "trading". Crony capitalism spills over into the government, the politics and the media,[3] when this nexus distorts the economy and affects society to an extent it corrupts public-serving economic, political and social ideals.

The term "crony capitalism" made a significant impact in the public as an explanation of the Asian financial crisis.[4] It is also used to describe governmental decisions favoring "cronies" of governmental officials. In this context, the term is often used comparatively with corporate welfare, a technical term often used to assess government bailouts and favoritistic monetary policy, as opposed to the economic theory, described by "crony capitalism". The extent of difference between these terms is whether a government action can be said to benefit the individuals rather than the industry.

In practice

Crony capitalism exists along a continuum. In its lightest form, crony capitalism consists of collusion among market players which is officially tolerated or encouraged by the government. While perhaps lightly competing against each other, they will present a unified front (sometimes called a trade association or industry trade group) to the government in requesting subsidies or aid or regulation.[5] Newcomers to a market then need to surmount significant "barriers to entry" for instance, in seeking loans, acquire shelf space, or receive official sanction. Some such systems are very formalized, such as sports leagues and the Medallion System of the taxicabs of New York City, but often the process is more subtle, such as expanding training and certification exams to make it more expensive for new entrants to enter a market and thereby limit competition. In technological fields, there may evolve a system whereby new entrants may be accused of infringing on patents that the established competitors never assert against each other. In spite of this, some competitors may succeed when the legal barriers are light.

The term crony capitalism is generally used when these practices come to dominate the economy as a whole or to dominate the most valuable industries in an economy.[2] Intentionally ambiguous laws and regulations are common in such systems. Taken strictly, such laws would greatly impede practically all business; in practice, they are only erratically enforced. The specter of having such laws suddenly brought down upon a business provides incentive to stay in the good graces of political officials. Troublesome rivals who have overstepped their bounds can have the laws suddenly enforced against them, leading to fines or even jail time. Even in high-income democracies with well-established legal systems and freedom of the press in place, a larger state is associated with more political corruption.[6]

The term crony capitalism was initially applied to states involved in the 1997 Asian financial crisis such as Thailand and Indonesia. In these cases, the term was used to point out how family members of the ruling leaders become extremely wealthy with no non-political justification. Southeast Asian nations still score very poorly in rankings measuring this. Hong Kong,[7] and Malaysia[8] are perhaps most noted for this, and the term has also been applied to the system of oligarchs in Russia.[9][10] Other states to which the term has been applied include India,[11] in particular, the system after the 1990s liberalization whereby land and other resources were given at throwaway prices in the name of public private partnerships, the more recent coal-gate scam and cheap allocation of land and resources to Adani SEZ under the Congress and BJP governments.[12]

Similar references to crony capitalism have been made to other countries such as Argentina[13] and Greece.[14] Wu Jinglian, one of China's leading economists[15] and a longtime advocate of its transition to free markets, says that it faces two starkly contrasting futures: a market economy under the rule of law or crony capitalism.[16] A dozen years later, prominent political scientist Pei Minxin had concluded that the latter course had become deeply embedded in China.[17]

Many prosperous nations have also had varying amounts of cronyism throughout their history including the United Kingdom, especially in the 1600s and 1700s, United States,[2][18] and Japan.

Crony capitalism index

The Economist benchmarks countries based on a "crony-capitalism index" calculated via how much economic activity occurs in industries prone to cronyism. Its 2014 Crony Capitalism Index ranking listed Hong Kong, Russia and Malaysia in the top 3 spots.[10]

In finance

Crony capitalism in finance was found in the Second Bank of the United States. It was a private company, but its largest stockholder was the federal government which owned 20%. It was an early bank regulator and grew to be one being the most powerful organizations in the country due largely to being the depository of the government's revenue.[19]

The Gramm-Leach-Bliley Act in 1999 completely removed Glass-Steagall’s separation between commercial banks and investment banks. After this repeal, commercial banks, investment banks, and insurance companies combined their lobbying efforts. Critics claim this was instrumental in the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.[20]

In sections of an economy

More direct government involvement in a specific sector can also lead to specific areas of crony capitalism, even if the economy as a whole may be competitive. This is most common in natural resource sectors through the granting of mining or drilling concessions, but it is also possible through a process known as regulatory capture where the government agencies in charge of regulating an industry come to be controlled by that industry. Governments will often, in good faith, establish government agencies to regulate an industry. However, the members of an industry have a very strong interest in the actions of that regulatory body, while the rest of the citizenry are only lightly affected. As a result, it is not uncommon for current industry players to gain control of the "watchdog" and to use it against competitors. This typically takes the form of making it very expensive for a new entrant to enter the market. An 1824 landmark U.S. Supreme Court ruling overturned a New York State-granted monopoly ("a veritable model of state munificence" facilitated by one of the Founding Fathers, Robert R. Livingston) for the then-revolutionary technology of steamboats.[21] Leveraging the Supreme Court's establishment of Congressional supremacy over commerce, the Interstate Commerce Commission was established in 1887 with the intent of regulating railroad "robber barons". President Grover Cleveland appointed Thomas M. Cooley, a railroad ally, as its first chairman and a permit system was used to deny access to new entrants and legalize price fixing.[22]

The defense industry in the United States is often described as an example of crony capitalism in an industry. Connections with the Pentagon and lobbyists in Washington are described by critics as more important than actual competition, due to the political and secretive nature of defense contracts. In the Airbus-Boeing WTO dispute, Airbus (which receives outright subsidies from European governments) has stated Boeing receives similar subsidies, which are hidden as inefficient defense contracts.[23] Other American defense companies were put under scrutiny for no-bid contracts for Iraq War and Hurricane Katrina related contracts purportedly due to having cronies in the Bush administration.[24]

Gerald P. O'Driscoll, former vice president at the Federal Reserve Bank of Dallas, stated that Fannie Mae and Freddie Mac became examples of crony capitalism. Government backing let Fannie and Freddie dominate mortgage underwriting. "The politicians created the mortgage giants, which then returned some of the profits to the pols—sometimes directly, as campaign funds; sometimes as "contributions" to favored constituents."[25]

In developing economies

In its worst form, crony capitalism can devolve into simple corruption, where any pretense of a free market is dispensed with. Bribes to government officials are considered de rigueur and tax evasion is common; this is seen in many parts of Africa, for instance. This is sometimes called plutocracy (rule by wealth) or kleptocracy (rule by theft).

Corrupt governments may favor one set of business owners who have close ties to the government over others. This may also be done with, religious, or ethnic favoritism; for instance, Alawites in Syria have a disproportionate share of power in the government and business there. (President Assad is an Alawite.[26]) This can be explained by considering personal relationships as a social network. As government and business leaders try to accomplish various things, they naturally turn to other powerful people for support in their endeavors. These people form hubs in the network. In a developing country those hubs may be very few, thus concentrating economic and political power in a small interlocking group.

Normally, this will be untenable to maintain in business; new entrants will affect the market. However, if business and government are entwined, then the government can maintain the small-hub network.

Raymond Vernon, specialist in economics and international affairs,[27] wrote that the Industrial Revolution began in Great Britain, because they were the first to successfully limit the power of veto groups (typically cronies of those with power in government) to block innovations.[28] "Unlike most other national environments, the British environment of the early 19th century contained relatively few threats to those who improved and applied existing inventions, whether from business competitors, labor, or the government itself. In other European countries, by contrast, the merchant guilds ... were a pervasive source of veto for many centuries. This power was typically bestowed upon them by government". For example, a Russian inventor produced a steam engine in 1766 and disappeared without a trace. "[A] steam powered horseless carriage produced in France in 1769 was officially suppressed." James Watt began experimenting with steam in 1763, got a patent in 1769, and began commercial production in 1775.[29]

Raghuram Rajan, former governor of the Reserve Bank of India, has said "One of the greatest dangers to the growth of developing countries is the middle income trap, where crony capitalism creates oligarchies that slow down growth. If the debate during the elections is any pointer, this is a very real concern of the public in India today."[30] Tavleen Singh, columnist for The Indian Express has disagreed. According to her, India's corporate success is not a product of crony capitalism, but because India is no longer under the influence of crony socialism.[31]

Political viewpoints

While the problem is generally accepted across the political spectrum, ideology shades the view of the problem's causes and therefore its solutions. Political views mostly fall into two camps which might be called the socialist and capitalist critique. The socialist position is that crony capitalism is the inevitable result of any strictly capitalist system and thus broadly democratic government must regulate economic, or wealthy, interests in order to restrict monopoly. The capitalist position is that "natural monopolies" are rare, therefore governmental regulations generally abet established wealthy interests by restricting competition.[32]

Socialist critique

Critics of crony capitalism including socialists and anti-capitalists often assert that crony capitalism is the inevitable result of any strictly capitalist system. Jane Jacobs described it as a natural consequence of collusion between those managing power and trade while Noam Chomsky has argued that the word "crony" is superfluous when describing capitalism.[33] Since businesses make money and money leads to political power, business will inevitably use their power to influence governments. Much of the impetus behind campaign finance reform in the United States and in other countries is an attempt to prevent economic power being used to take political power.

Ravi Batra argues that "all official economic measures adopted since 1981 [...] have devastated the middle class" and that the Occupy Wall Street movement should push for their repeal and thus end the influence of the super wealthy in the political process, which he considers a manifestation of crony capitalism.[34]

Socialist economists, such as Robin Hahnel, have criticized the term as an ideologically motivated attempt to cast what is in their view the fundamental problems of capitalism as avoidable irregularities.[35] Socialist economists dismiss the term as an apologetic for failures of neoliberal policy and more fundamentally their perception of the weaknesses of market allocation.

Capitalist critique

Supporters of capitalism generally oppose crony capitalism as well and consider it an aberration brought on by governmental favors incompatible with free market.[36][37] Proponents of capitalism tend to regard the term as an oxymoron, arguing that crony capitalism is not capitalism at all.[38][39][40] In the capitalist view, "cronyism" is the result of an excess of interference in the market, which inherently will result in a toxic combination of corporations and government officials running the sector of the economy. Some advocates prefer to equate this problem with terms such as "corporatocracy" or "corporatism, a modern form of mercantilism"[41] to emphasize that the only way to run a profitable business in such a system is to have help from corrupt government officials.

Even if the initial regulation was well-intentioned (to curb actual abuses) and even if the initial lobbying by corporations was well-intentioned (to reduce illogical regulations), the mixture of business and government stifle competition,[42] a collusive result called regulatory capture. Burton W. Folsom Jr. distinguishes those that engage in crony capitalism—designated by him "political entrepreneurs"—from those who compete in the marketplace without special aid from government, whom he calls "market entrepreneurs". The market entrepreneurs, such as Hill, Vanderbilt and Rockefeller, succeeded by producing a quality product at a competitive price. The political entrepreneurs, for example, Edward Collins in steamships and the leaders of the Union Pacific Railroad in railroads, were men who used the power of government to succeed. They tried to gain subsidies or in some way use government to stop competitors.[43]

See also


  1. ^ Helen Hughes (Spring 1999). "Crony Capitalism and the East Asian Currency and Financial 'Crises'". Policy. Retrieved July 22, 2012. Japan’s dismal performance in the 1990s and the East Asian collapses of 1997 indicate that dirigisme can only boost economies in the short run and at high cost. It breaks down in the long run (Lindsey and Lukas 1998).
  2. ^ a b c Kristof, Nicholas (March 27, 2014). "A Nation of Takers?". The New York Times. Retrieved March 27, 2014.
  3. ^ The Discovery that Business Corrupts Politics: A Reappraisal of the Origins of Progressivism, by McCormick, Richard. 1981. The American Historical Review, Vol. 86, No. 2 (Apr. 1981), pp. 247–74.
  4. ^ Kang, David C. (2002). Crony Capitalism: Corruption and Development in South Korea and the Philippines (PDF). Cambridge: Cambridge University Press. ISBN 978-0-521-00408-4. Focused only on explaining successful outcomes, the conventional model provided no analytic way to explain the 1997 crisis. Countries previously regarded as miracles now were nothing more than havens for crony capitalists (p. 3)
  5. ^ "Uber vs. Washington, D.C.: This Is Insane". July 10, 2012. Retrieved July 11, 2012. a fight over a new competitor to the District's (often horrible) taxi service offers something I haven't seen in a while. Not routine retail-level corruption, nor skillful top-level favor trading, but instead what appears to be a blatant attempt to legislate favors for one set of interests by hamstringing another.
  6. ^ Hamilton, Alexander (2013), Small is beautiful, at least in high-income democracies: the distribution of policy-making responsibility, electoral accountability, and incentives for rent extraction [1], World Bank.
  7. ^ Vines, Stephen (1 April 2014). "Why Hong Kong's latest No 1 ranking was greeted with silence". South China Morning Post. Retrieved 4 April 2014.
  8. ^
  9. ^ "Having it both ways". The Economist. May 20, 2004.
  10. ^ a b "The countries where politically connected businessmen are most likely to prosper". The Economist. 15 March 2014. Retrieved 4 April 2014.
  11. ^ "Govt Patronises Crony Capitalism Again". June 19, 2011. Retrieved 11 August 2013.
  12. ^ Khetan, Ashish (12 February 2017). "Modi's Own Record of 'Raincoat Bathing' Is Worth Recalling". The Wire. Retrieved 14 February 2017.
  13. ^ "Peronism and its perils". The Economist. June 3, 2004.
  14. ^ "The Scourge of Crony Capitalism". June 20, 2012. Retrieved 9 October 2013.
  15. ^ "Keeping an eye on business". The Economist. May 27, 2004.
  16. ^ Jinglian, Wu (June 2006). "The road ahead for capitalism in China". The McKinsey Quarterly.
  17. ^ Pei, Minxin (2016). China’s Crony Capitalism : The Dynamics of Regime Decay. Harvard University Press.
  18. ^ "Planet Plutocrat: The countries where politically connected businessmen are most likely to prosper". The Economist. March 15, 2014.
  19. ^ Zingales, Luigi (2012). A Capitalism for the People: Recapturing the Lost Genius of American Prosperity. New York: Basic Books. p. 50.
  20. ^ Zingales, Luigi (2012). A Capitalism for the People: Recapturing the Lost Genius of American Prosperity. New York: Basic Books. pp. 50–52.
  21. ^ Styles, T.J. The First Tycoon: The Epic Life of Cornelius Vanderbilt. ISBN 978-0-375-41542-5. Property requirements for suffrage under New York's constitution of 1777 hardened the culture of rank into law. Two distinct levels of wealth were required to vote, one for state assembly, and a second and higher level for the state senators and governor... [this suffrage scheme fostered] mercantilism, which in the state empowered private parties to carry out activities thought to serve the public interest. The standard reward for such an undertaking was a monopoly—just what Chancellor Livingston sought when he offered to meet a most pressing public need, the need for steamboats...Livingston maneuvered...the monopoly through the legislature ("a veritable model of state munificence," as legal scholar Maurice G. Baxter writes—that gave him the right to seize steamboats the entered New York waters from other states. But Livingston had overreached. With so many inventors and investors interested in the steamboat, the monopoly on served to limit its adoption. The new technology was simply too important for the monopoly to remain unchallenged. [pp. 39–42]
  22. ^ Lee, Timothy (August 3, 2006). "Entangling the Web". The New York Times. Retrieved December 13, 2011.
  23. ^ "Pulling Boeing Out of a Tailspin". BusinessWeek. December 15, 2003. Retrieved December 13, 2011. A national treasure, once No. 1 in commercial aviation, Boeing has become a risk-averse company stumbling to compete in the marketplace and dependent on political connections and chicanery to get government contracts. Boeing needs a strong board and a rejuvenated corporate culture based on innovation and competitiveness, not crony capitalism.
  24. ^ Dreier, Peter (March 2006). "Katrina and Power in America". Occidental College. Retrieved July 22, 2012. Three companies—the Shaw Group, Kellogg Brown & Root (KBR, a subsidiary of Haliburton, whose former CEO is Vice President Dick Cheney), and Boh Brothers Construction of New Orleans—quickly scooped up no-bid ACE contracts to perform the restoration. Bechtel and Fluor (also with close GOP ties) also reaped huge contracts. The Department of Defense has been criticized for awarding Iraq reconstruction contracts to Haliburton and Bechtel without competition (Broder 2005)
  25. ^ O'Driscoll Jr, Gerald P. (September 9, 2008). "Fannie/Freddie Bailout Baloney". New York Post. Archived from the original on September 13, 2008.
  26. ^ Syrian Businessman Becomes Magnet for Anger and Dissent "Like Mr. Ezz in Egypt, he has become a symbol of how economic reforms turned crony socialism into crony capitalism, making the poor poorer and the connected rich fantastically wealthier."
  27. ^ "Raymond Vernon Dies at 85". The Harvard University Gazette. President and Fellows of Harvard College. September 23, 1999. Archived from the original on May 3, 2012. Retrieved February 9, 2013.
  28. ^ Vernon (1989)
  29. ^ Vernon (1989, p. 8); see also Watt steam engine and James Watt
  30. ^ "Crony capitalism a big threat to countries like India, RBI chief Raghuram Rajan says". Times of India. 12 August 2014. Retrieved 6 November 2014.
  31. ^ "No crony capitalism in India - Indian Express". Retrieved 6 April 2018.
  32. ^ "Archived copy". Archived from the original on 2015-01-03. Retrieved 2015-01-08.CS1 maint: Archived copy as title (link)
  33. ^ "Black Faces in Limousines:" A Conversation with Noam Chomsky from accessed on June 5, 2009
  34. ^ Batra, Ravi (11 October 2011). "The Occupy Wall Street Movement and the Coming Demise of Crony Capitalism". Truthout. Retrieved 21 October 2011.
  35. ^ Robin Hahnel. "Let's Review". IMF officials Michel Camdessus and Stanley Fischer were quick to explain that the afflicted economies had only themselves to blame. Crony capitalism, lack of transparency, accounting procedures not up to international standards, and weak-kneed politicians too quick to spend and too afraid to tax were the problems according to IMF and US Treasury Department officials. The fact that the afflicted economies had been held up as paragons of virtue and IMF/World Bank success stories only a year before, the fact that neoliberalism’s only success story had been the Newly Industrialized Countries (NIC's) who were now in the tank, and the fact that the IMF and Treasury department story just didn’t fit the facts since the afflicted economies were no more rife with crony capitalism, lack of transparency, and weak-willed politicians than dozens of other economies untouched by the Asian financial crisis, simply did not matter.
  36. ^ Nicholas D. Kristof (Oct 26, 2011). "Crony Capitalism Comes Home". The New York Times. Retrieved Nov 27, 2011. some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us...featherbedding by both unions and tycoons...are impediments to a well-functioning market economy.
  37. ^ John Stossel (2010). "Let's Take the "Crony" Out of "Crony Capitalism"". Archived from the original on May 13, 2012. Retrieved Nov 26, 2011. The truth is that we don't have a free market—government regulation and management are pervasive—so it's misleading to say that "capitalism" caused today's problems. The free market is innocent. But it's fair to say that crony capitalism created the economic mess.
  38. ^ Salsman, Richard M. "Capitalism Isn't Corporatism or Cronyism". Forbes. Retrieved 2018-07-21.
  39. ^ "Getting Crony Capitalism Half Right". 2018-04-28. Retrieved 2018-07-21.
  40. ^ "Crony Capitalism = Phony Capitalism! - STUDENTS FOR LIBERTY". STUDENTS FOR LIBERTY. 2011-11-04. Retrieved 2018-07-21.
  41. ^ Ben Shapiro (2011). "There's No Such Thing as "Crony Capitalism"". Archived from the original on 2012-04-26. Retrieved Nov 26, 2011. This "crony capitalism," Sarah Palin said, is "not the capitalism of free men and free markets." In general, she's right. But...her dead wrong. The fact is that there is no such thing as "crony capitalism." In reality, it is corporatism, a modern form of mercantilism. Corporatism is based on the notion that industries comprise the economy like body parts comprise the body—they must work in concert with one another, and they must take central direction.
  42. ^ John Stossel (2010). "Let's Take the "Crony" Out of "Crony Capitalism"". Archived from the original on 2012-05-13. Retrieved Nov 26, 2011. Which are more likely to be hampered by vigorous regulatory standards: entrenched corporations with their overstaffed legal and accounting departments or small startups trying to get off the ground? Regulation can kill competition—and incumbents like it that way.
  43. ^ Folsom, Burton. "Myth of the Robber Barons". Archived from the original on 2011-11-28. Retrieved Nov 28, 2011. The author, Burton Folsom, divides the entrepreneurs into two groups: market entrepreneurs and political entrepreneurs.


  • Vernon, Raymond (1989), "Technological Development", EDI Seminar Paper, 39, ISBN 978-0821311622

Further reading

External links

A Capitalism for the People

A Capitalism for the People: Recapturing the Lost Genius of American Prosperity is a non-fiction book by the Italian–American writer and economist Luigi Zingales, known for serving as a Professor of Entrepreneurship and Finance at the University of Chicago's Booth School of Business. He also authored the book Saving Capitalism from the Capitalists in 2003.

In A Capitalism for the People, Zingales writes that he wants to rescue markets and competition from the twin forces that threaten them: over-regulation on the political left and, on the right, a pro-business (as opposed to pro-market) ideology. He sees the great threat to the U.S. economy as being crony capitalism and he lays out what he sees as persuasive evidence, and he suggests to channel populist anger, reverse the movement toward a crony system, reduce the opportunities for rent seeking, and increase the opportunities for competition. He advocates reforms such as greater transparency of economic data as well as restrictions on lobbying.Zingales has answered questions on his book during the Business Daily programme on World Service BBC.He has presented his book at the London School of Economics where he warned that the U.S. economy risks deteriorating into a Berlusconi-style crony-capitalist system—pro-business rather than pro-market, and run by corrupt politicians who are more concerned with lining the pockets of the connected elite than with improving opportunity for the people.The book has received positive reviews from a variety of publications such as EconTalk, Publishers Weekly, and The Sacramento Bee.

Buddha in a Traffic Jam

Buddha in a Traffic Jam is a 2014 Indian socio-political drama film written and directed by Vivek Agnihotri. Its ensemble cast include Arunoday Singh, Anupam Kher, Pallavi Joshi, Mahie Gill, Anchal Dwivedi, Indal Singh and Gopal K Singh. The film narrates the story of a professor who advocates his business students about the need of a revolution in India and the world at large, also sampling themes like corruption, naxalism, campus politics, moral policing, and crony capitalism.

The film premiered at IIT Bombay on 6 April 2016. It was released nationwide on 13 May 2016.

Capitalist state

The capitalist state is the state, its functions and the form of organization it takes within capitalist socioeconomic systems. This concept is often used interchangeably with the concept of the modern state, though there are many differences in sociological characteristics among capitalist states despite their common functions.The primary functions of the capitalist state are to provide a legal framework and infrastructural framework that is conducive to business enterprise and the accumulation of capital. Different normative theories exist on the necessary and appropriate function of the state in a capitalist economy, with proponents of laissez-faire favoring a state limited to the provision of public goods and safeguarding private property rights while proponents of interventionism stress the importance of regulation, intervention and economic stabilization in providing the framework for the accumulation of capital and business.For Karl Marx, the capitalist state is understood to be a reflection of the economic base, with its chief function reflecting the needs of the capitalist economy. This involves creating the legal and infrastructural framework (the superstructure) that facilitates capitalism as well as balancing the needs of the various classes to ensure the perpetuation of capitalism. This often involves attempts to safeguard state policy from being used to benefit specific capitalists or firms at the expense of the bourgeoisie as a whole. Hence, Marx described the function of the executive of a capitalist state as "nothing but a committee for managing the common affairs of the whole bourgeoisie". Specifically, in Marx's view the capitalist state necessarily exists to serve the interests of capitalists (referred to as "the bourgeoisie"), not as a defect, but as a necessary feature of capitalism. Thus, thinkers in the Marxist tradition often refer to the capitalist state as the dictatorship of the bourgeoisie. Thinkers in the instrumental Marxist tradition stress the role of policymakers and political elites sharing a common business or class background, leading to their decisions reflecting their class interest. This is differentiated from more contemporary notions of state capture by specific business interests for the benefit of those specific businesses and not the ruling class or capitalist system as a whole, which is variously referred to as crony capitalism or corporatocracy.

Committee for Economic Development

The Committee for Economic Development of The Conference Board (CED) is a nonprofit, nonpartisan, business-led public policy organization. CED's Trustees consist primarily of senior corporate executives from a range of U.S. industries and sectors. CED's stated aims are to sustain and promote free enterprise, improve education and healthcare, reform campaign finance, enhance corporate governance, and improve the fiscal health of the United States.

Crony-capitalism index

The crony-capitalism index aims to indicate whether the livelihood of the people from certain country or city with a capitalist economy are easily affected by crony capitalism. It is not an internationally recognized index due to its limitations.It is a new measurement of crony capitalism designed by The Economist newspaper based on the "work by Ruchir Sharma of Morgan Stanley Investment Management, Aditi Gandhi and Michael Walton oew Delhi's Centre for Policy Research, and others" in 2014.


Cronyism is the practice of partiality in awarding jobs and other advantages to friends, family relatives or trusted colleagues, especially in politics and between politicians and supportive organizations. For instance, this includes appointing "cronies" to positions of authority, regardless of their qualifications.Cronyism exists when the appointer and the beneficiary such as an appointee are in social or business contact. Often, the appointer needs support in his or her own proposal, job or position of authority, and for this reason the appointer appoints individuals who will not try to weaken his or her proposals, vote against issues, or express views contrary to those of the appointer. Politically, "cronyism" is derogatorily used to imply buying and selling favors, such as: votes in legislative bodies, as doing favors to organizations, giving desirable ambassadorships to exotic places, etc.

Deneen Borelli

Deneen Laverne Borelli (née Moore; born May 28, 1964) is an American conservative author, columnist, and television personality. She is the author of Blacklash: How Obama and the Left are Driving Americans to the Government Plantation, a political critique of what she describes as progressivism, crony capitalism, and elitism under the Obama administration.Borelli is a host on BlazeTV and a contributor on Fox News and Fox Business programs such as Hannity, Fox and Friends, and Lou Dobbs Tonight.Previously, Borelli was the Outreach Director for Tea Party group FreedomWorks overseeing its outreach program, and a Manager of Media Relations with the Congress of Racial Equality (CORE). Borelli was also a Senior Fellow with Project 21, a network of black conservatives organized by the National Center for Public Policy Research.

Economic history of the Philippines (1965–86)

The 21-year period of Philippine economic history during Ferdinand Marcos’ regime - from his election in 1965 until he was ousted by the People Power Revolution in 1986- was a period of significant economic highs and lows.The early part of Ferdinand Marcos' administration continued the rising growth rate which characterized the previous administrations of the Third Philippine Republic, peaking at nearly 9 percent in 1973 and 1976. However, Marcos' later years in power saw the worst recession in Philippine history, with the economy contracting by 7.3% in 1984 and 1985.The dramatic rise and fall of the Philippine economy during this period is attributed to the Marcos administration's heavy dependence on foreign loans, its policy of establishing monopolies under Marcos cronies, corruption by government officials, and the capital flight which has historically been attributed to the Marcos family's economic plunder.

Eretz Hadasha

Eretz Hadasha (Hebrew: ארץ חדשה‎, lit. New Country) is a political party in Israel, founded in 2012 to run in the 2013 parliamentary elections. It is headed by the attorney Eldad Yaniv followed by journalist Merav David and television director Rani Blair. Its main stated goal is to fight corruption and crony capitalism.

Gas Wars

Gas Wars: Crony Capitalism and the Ambanis is a book written by Paranjoy Guha Thakurta, Subir Ghosh and Jyotirmoy Chaudhuri. The book was officially released on 15 April 2014. The book deals with the issue of irregularities in the determination of the price of natural gas in India.

Hussein Salem

Hussein Salem (Arabic: حسين سالم‎; born 11 November 1933) is an Egyptian-Spanish businessman, co-owner of the East Mediterranean Gas Company (EMG), and ally and advisor to former president Hosni Mubarak. He is also the chairman and CEO of HKS Group, a hospitality company that operates Maritim Jolie Ville Resort in Sharm El Sheikh. He has been described as "one of the most secretive businessmen in Egypt", a mogul, and Mubarak's close confidant. He was known as the "Father of Sharm El Sheikh" due to his resort development activities.

Legal plunder

Legal plunder, is the act of appropriating, under the laws, the property of others. This was coined by Frédéric Bastiat, most famously in his 1850 book The Law. It has since become a concept in libertarian thought, and has been used similarly by others, including Daniel Lord Smail.Today it is the appropriation of the assets of another person by power groups through rules of public law that violate the principle of equality and the Constitution.

Throughout history there are many examples of legal plunder as the political and economic regimes that have followed: partial legal plunder are the result of tyranny and protectionism or universal legal plunder the result of socialism or communism.

Manuel Elizalde

Manuel "Manda" Cadwallader Elizalde Jr. (November 8, 1936 - May 2, 1997) was a Filipino businessman. He was most known for claiming to discover a 'Stone-Age' tribe called the Tasadays which was later exposed as a hoax.

One Way Forward

One Way Forward: The Outsider's Guide to Fixing the Republic is the seventh book by Lawrence Lessig, a Harvard law professor and activist concerned about the excessive influence of corporate money in politics. One Way Forward describes his discussions with activists in the Tea Party and Occupy Wall Street. He says the two groups have a lot in common, including a concern for the future of the US and a willingness to devote substantial amounts of time and possibly money to do what they think is likely to fix the worst of the problems.

They also share a counterproductive tendency to label as "treasonous" anyone who suggests talking with the other side. Lessig says that together these different groups can fix the biggest problem facing the US today, namely the excessive influence of corporate money in politics, also called crony capitalism or corporate welfare. However, all sides must first find ways to listen to the others to find their common ground.

Lessig hopes this book will help catalyze a needed rapprochement between different groups, encouraging them to listen to the others and find their common grounds. If they can do that, they can produce much needed change in the political economy of the US and possibly the world.

To facilitate this, Lessig writes, "After a short period, and assuming the book takes hold, I will license it freely, and based on the feedback (at, draft version two. That second version will be licensed freely from the start, and will live on a wiki. That means that no single one of us will own it, but that all of us will be able to direct it."

Regulatory capitalism

The term regulatory capitalism suggests that the operation maintenance and development of the global political economy increasingly depends on administrative rules outside the legislatures and the courts.

The general trend despite and beyond the process of liberalization is that of growth rather than decline of regulation. Deregulation may represent trends in some industries (notably finance), but more regulation is the general trend beyond that characterize modern and post-modern capitalism alike. Regulation in this interpretation is an instrument of organizations—states, business, civil and hybrid and is carried at all political arenas and levels.

The concept of regulatory capitalism serves as an alternative to concepts like financial capitalism, welfare capitalism, casino capitalism, developmental capitalism, risk capitalism, state capitalism and crony capitalism in an attempt to shed more light on capitalism as a polymorphous order.

Ricardo Manapat

Jose Ricardo L. Manapat was an activist, scholar, writer, researcher, an educator who was the Director of the Records Management and Archives Office of the Philippines (The National Archives) from 1996–1998 and 2002–2008. He is best known as the author of the book, "Some Are Smarter Than Others: The History of Marcos' Crony Capitalism", which is a classic work on anti-cronyism exposing the Marcos wealth, and Editor-in-Chief of the "Smart File", Smart File Magazine Animal Farm Series.

Sherkhan Farnood

Sherkhan Farnood ((1963-08-15)15 August 1963 – (2018-08-24)24 August 2018) was an Afghan banker, Chairman of Kabul Bank until late 2010, which is Afghanistan's largest private financial institution with over 1 million customers. Farnood held 28.16% of the shares in the Kabul Bank. He also owned Pamir Airways, in partnership with Khalilullah Fruzi/Frozi, Mohammed Fahim and possibly others. According to media reports, by November 2010 Da Afghanistan Bank insisted both Farnood and Kabul Bank chief executive Frozi had been removed from bank management;. As of early 2011 both were effectively under house arrest and could not leave the country.An ethnic Uzbek, Farnood is originally from the northern Kunduz Province of Afghanistan. He studied chemical engineering full-time while simultaneously running a business in Moscow, Russia. During the 1980s and 1990s, he ran a hawala, or an informal money transfer organization in Moscow.Farnood became a prominent poker player, he took part in the 2008 World Series of Poker Europe (WSOPE) and won his first bracelet. Prior to his detention, he spent most of his time in Dubai, United Arab Emirates, where he owned a number of villas under his name on Palm Jumeirah.On 24 August 2018, Farnood died in prison at the age of 55, apparently due to natural causes.

Stossel (TV series)

Stossel is a weekly American talk show, hosted by John Stossel, highlighting current consumer issues with a libertarian viewpoint. The television program debuted on December 10, 2009, on the Fox Business Network and aired on Fridays. It originally aired at 8:00 pm EST, but was moved to 9:00 pm EST. In 2013, Fox News Channel began to replay the show which aired occasionally on the weekends.

John Stossel moderated the first-ever nationally televised Libertarian presidential debate on April 1, 2016. The second part of the debate aired on April 8.The final episode premiered on December 16, 2016. At the end of that episode, a retrospective that spotlighted moments from seven years of the program, Stossel explained that due to his age, he wanted to help develop a younger generation of journalists with his views, and would continue to appear as a guest on Fox programs, and also help produce content for Reason TV.

Workers' resistance against the Marcos dictatorship

During the presidency of Ferdinand Marcos, Filipino workers in the labor industry experienced the effects of government corruption, crony capitalism, and cheap labor for foreign transnational industries. One of the objectives of Martial Law was to cheapen labor costs, in order to attract transnational corporations to export labor to the Philippines. Marcos signed many presidential decrees beneficial only to his associates, while allowing for the forced relocation of indigenous peoples, decreasing workers' wages, and murders of labor activists. Minimum wage was a fixed Php 8.00 per day. Many workers were unemployed or underemployed. It was also during the Marcos presidency when the practice of contractualization began,enabling managements to avoid giving regular, permanent status to employees after six months of work. Strikes were banned and the government controlled trade unions, leaving workers without effective protection against employers who had unfair labor practices and regulations.

Furthermore, with each year under Martial Law, economic conditions deteriorated due to a large trade deficit. Between 1974 and 1981, the trade deficit increased from $418 million to $2.2 billion, while the foreign debt increased from $5.1 million to $14.8 billion in 1976 and 1981. A study by the World Bank found that Philippine poverty increased between 1972 and 1978. Real wages for skilled for workers in urban areas fell by 23.8%, and for unskilled laborers the decline was 31.6%. Authors of the study concluded that "purchasing power has dropped in both urban and rural areas, in all regions, and practically all occupations," and the gap between rich and poor is "worse in the Philippines than elsewhere in the [Southeast Asian] region. In this context, the material conditions of the working class was greatly in contrast to the lavish opulence of crony capitalism under of the Marcos regime. These are some of the factors that propelled workers to resist the Marcos dictatorship.

These workers protested against the Marcos regime in forms of silent strikes, sit-down strikes, work slowdowns, mass leaves and the stretching of the break period. The first major strike against the dictatorship was in La Tondena, then the largest distillery in Asia. Over 500 workers went on strike, led by student activist Edgar Jopson and veteran labor activists, church peoples, labor unions and the surrounding community. On the second day of the protest, the police cracked down on the area and arrested the workers. Word of the protest spread, becoming one of the symbols of resistance. Marcos responded by proclaiming a decree that outlawed all strikes across all industries.

The workers continued their protests despite the ban. In the following months, around 200 strikes broke out nationwide, with 80,000 participating. In Manila alone, there were 25 strikes, with 40,000 participating. In 1981, after Marcos nominally lifted Martial Law, 260 strikes took place, with over 76,000 workers involved. Labor unions against the dictatorship increased in number and strength under martial law.

This page is based on a Wikipedia article written by authors (here).
Text is available under the CC BY-SA 3.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.