Crony capitalism is an economic system 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 often achieved by using state power rather than competition in managing permits, government grants, tax breaks, or other forms of state intervention[1][2] over resources where the state exercises monopolist control over public goods, Cite

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In my opinion, the biggest domestic abuses of governments form when businesses become sufficiently large to buy off politicians creating what is known as 'crony capitalism'.

The below two stories are just two of endless examples that could be cited where markets and pricing like this would not be able to be sustained without government intervention 'protecting the markets' from competition.

Two Friends in Texas Were Tested for Coronavirus. One Bill Was $199. The Other? $6,408.

Students Find $100 Textbooks Cost $50, Purchased Overseas


Free(r) Trade, and the removal of government barriers is what contributed arguably the most to the last few decades of Wealth creation, world wide. Consumer spending is the largest part of a citizens budget.

The current US move back towards protected markets, and locking out competitors will only serve to create more of these massive imbalances and price gouges. Anyone thinking that business and government will not collude and run amok at the expense of citizens is just naive. A captive market with no where to go, is business' dream. Who are they going to complain to ...the government? (literal LOL).

I am not trying to create an anti-Trump thread here but his push towards closing markets will only hurt US citizens. We have countless examples like those I cited we can look to as to how business gauge once provided gov't cover to do so.


Discuss...

The word for what you're describing is fascism.

The rallying cry is MAGA !!!

Haha.

Fascism is far more complex system, with much broader controls, as I am sure you know, but cronyism is certainly a part of it.

Well, I exaggerate for effect.
But interestingly enough Wiki says :

"Fascism (/ˈfæʃɪzəm/) is a form of far-right, authoritarian ultranationalism[1][2] characterized by dictatorial power, forcible suppression of opposition, as well as strong regimentation of society and of the economy[3] which came to prominence in early 20th-century Europe.[4]"

"Crony capitalism is an economic system 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."

I suspect crony capitalists don't mind a bit of fascism.

Not my intent to hijack btw. I'll stop now.

no worries.

Crony Capitalism is almost certainly one of the legs of the stool of complete fascism.

The AFL-CIO on trade:

Unions are not really for free trade, especially when it comes to labor.

Good example of a snuck premise.

This is why limited & decentralized govt. is best. The pigs can't feed at an empty trough.

unions generally are all about protections.

The problem is that these issues are complex. So it is not just as simple as 'stop outsourcing' = 'protect US jobs'.

That can work in the short term but over time what the locked out market does create at home is massive inefficiencies. Unions have little need to be compromise and be competitive. The companies have little to no need to offer lower pricing now or in the future.

That bubble of protection would see US prices to consumers for things like the Medications and Text Books or Cars, etc explode upwards in the US, while the rest of world drove prices down and down for those same goods due to competition and outsourcing.

There would come a breaking point for US citizens who would see a Car, Medicine, Book, cost 1/10th the price elsewhere and they would demand access to the cheaper goods. And few of their items would be exportable due to much higher cost base. And the longer the society is protected the more expensive and difficult it is for them to rejoin later.

The UK was experiencing this pre EU and will start to exasperate it again with Brexit.

I would expect our more libertarian leaning friends to jump on this point.

Countries with unions and labor protection don't spend what we do on HC, or the Military or on higher education. If some of that money was freed up I suspect American consumers would love to pay more for quality US made products like they once did.

Also trade deficits just take your wealth and give it to someone else for free.
Without crony capitalism that doesn't happen in an actual free market. I mean, unless the actors aren't rational.

Sadly there is nothing to be done as crony capitalism has to be killed in the crib. Once it grows up it is too late and only a total systemic dollar collapse can cause a reset. I only see two options at this point. One is everyone agrees to conduct small business trade in something besides dollars. This will never happen since dollars are required for payment of taxes, so they will always have demand, at least among Americans, if just to avoid prison.


The other more likely option is for the public to demand being cut in on some of the unproductive parasitic action and lobby for a UBI. The UBI option will probably eventually cause a dollar collapse or debt default, but at least it will keep the proles from eating each other and the crony capitalists for a while.

@OP

Government subsidizing things, increases the prices. Food Stamps is another example of this.

The real issue is, the growth of capitalism in developing countries has pissed off the upper middle class world (western nations), because it's redistributing their wealth. The political leaders and the public at large decide to use debt to maintain/increase that standard of life. The western world is spoiled. It cost quite a bit to live in a western country. The more we try to interfere in the market, there's consequences. Most westerners on the left and right are like, **** it, got mine, I want to keep it, **** the world, which is what leads to stuff like this.

Of course, you have a lefty spounting aspects of socialism...because he does not want to lose any of his standard of life (not you OP).

They WOULD pay more for quality and also a slight premium for Made in America, but only slight. The distortions you see in the OP would happen in far more industries with closed borders. 100% to several hundred percent more than other countries pay and that would be unsustainable.

Gross.

So the middle class tax payer again provides a subsidy to the uber rich corporations and their owners by making the price gauging more palatable.

What a great con as corporations say to Politicians, 'oh don't worry about the high prices and our profits, just use medicare money to pay most of it'. And they do.

(I could not access your link FWIW)

no the word is just capitalism. op title is a redundancy. well, I guess yours is as well. capitalism, fascism, chronyism. they are all the same and all necessary inevitabilities.

No.

While there can be and often is overlap, they are not the same.

This!

I don't follow.
The examples you gave were of what you're calling crony capitalism (I agree with the examples). If we had government work towards a capitalism that was better for American consumers and workers we wouldn't have those particular problems. We'd have some other problems and some things might double, like electronics and some food items. But I think the US could easily sustain itself with a decent standard of living for the vast majority of us. We have the resources, it's just a matter of getting politicians to represent the people instead of international corporate interests.

I mean, obviously you need require hospitals and doctors to have a menu that's easily accessible to the patients. They require fast food places to do it but not hospitals ? You literally go into a business that will bankrupt you and they have no requirement to show you the prices they're going to charge ?
THAT is the crony capitalism. Fair trade agreements are one result of ending crony capitalism I would think.

Well, not 'necessary' but once you give up your democracy it seems to be inevitable.

So the Amazon's of the world can pit the small, scattered governments against each other like they do now state by state ?

Nah. Not better. Just a different set of problems. All in all maybe worse.

necessarily in the sense that its inevitable. when you form a society around accumulation it is bound to happen.

You mean humans should be taught to do more than just out compete one another and start to value living as a useful member of society ?

Not in this release. Maybe 2.0 will be better.

No, prices are set by what people will pay. The various government subsidies mean they can pay more. They could not charge it, if people were not able to pay it. Oddly, your doctors visit is cheaper if you pay cash, but the obsession over catastrophic health issues has led people to pay insurance companies, and subsequently you have an entire block of voters who now want that subsidized, then complain about high prices.


I don't get the obsession with Scrooge Mcduck. Like, very few companies and people are "uber rich". Most of their wealth is entirely on paper, and dependent on what someone will pay for the stock they own. Further, and for the most part, an enormous amount of "profit" it is reinvested/spent. That means is being filtered back into the economy. You can talk about evil corporations, one of most effectual US corporations, spends 97% of its revenue (Wal-Mart). In other words, that money is going to people other than the company, or it's shareholders. United Health Care has a net profit margin of 3-5%, so 95-97% of its revenue is being spent. This is the case for an overwhelmingly large amount corporations. This is the benefit of capitalism. Also, the "subsidies" actually allow companies to spend more of their revenue. A business plan operates on percentages. In other words, Walmart will reinvest/spend 97% of its revenue, no matter what. It could be one dollar, or one trillion. The people receiving that revenue are the ones really getting a subsidy, which are mostly the small cap companies, or small business types, or, upper middle class. Finally, unless a company issues a dividend, most of the profits are also reinvested. Investors typically don't like a large cash balances, because it's not earning anything. They rather have the company spend that money to grow the business. Most investors make money by the price of the stock, not the profit a company makes, not directly anyways. Investors want scale and growth, at 3-5% net profit margins. That's what makes their stock increase. In mature companies, most investors don't care about an increasing profit margin, and look more towards revenue.**

This is where you need to take a look at institutional investors, i.e. 401K runners, which in most cases, are just investing money for the middle and upper middle class.

**Tech companies are an exception to this, i.e. Apple. It's one of my prime examples of a spoiled culture. Like, 45% of all US smartphone users, have one the highest priced cell phones on the market. This is where the subsidies are going. The iphone in your pocket, or any other number of consumer goods and services that improves your standard of life. They allow you to afford those things.

Without a doubt the pressures in that direction are immense and never ending. The financial incentives for the corporations and the politicians are immense and their interests aligned. As long as politicians know the public will not pay attention and they can sell them out and not lose an election they will push it.

They chip, chip, chip, away.