“The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.” – Milton Friedman
Perhaps the most significant and deeply complex political issue that’s never addressed–or even fully understood by those on the left or the right–is crony capitalism. I know what you’re thinking. It was just last week that Carly Fiorina and other Republican candidates were bemoaning cronyism! I’m fully aware of that, and am very grateful, because prior to this election cycle, I rarely (if ever) heard a Republican utter the words “crony capitalism.”
The reason I’d never heard Republicans talk about crony capitalism prior to this election cycle (and the 2012 cycle to a much lesser extent) is because the Republicans currently in the front of the pack are not actually Republicans, they’re conservatives.
There’s a profound difference between Republicans and conservatives. Nearly all conservatives are Republicans, but few Republicans are actually conservatives. The conservatives running for president believe in a truly free market, and that’s why we’re hearing about it. The Republicans in the House and Senate–the cartel, the graybeards, the establishment–are crony capitalists to the bone.
Crony capitalism is the system in which we currently live. We don’t live in a free market; we live in a controlled market. Crony capitalism is a system in which the federal government selects certain businesses or industries to favor or subsidize, and those businesses and industries return the favor by donating to, and fundraising for, the politicians who gave them money and preferential treatment.
In short, government and big business are in a codependent and deeply unhealthy relationship, that if rocked just slightly, can lead to catastrophe like we saw in 2008.
TARP, and more specifically the auto industry bailout, are prime examples of cronyism. The banks and the car companies were failing, and rather than allow the market to decide who succeeded or failed on their own merits, the government bailed them out. They had to. Why? Because they caused the problem in the first place. A large part of the reason these companies and banks failed was because of their unstable and unhealthy relationship with the government going back decades.
Nicole Gelinas of the Manhattan Institute explains the bailout brilliantly in this short video:
Not only does cronyism strangle the free market, it costs taxpayers billions of dollars annually.
Michael Tanner of National Review writes:
“Crony capitalism costs taxpayers roughly $100 billion per year, according to Cato Institute estimates, and consumers hundreds of billions more in higher prices. It slows economic growth and leads to greater inequality.”
All of this exposition leads me to my main argument. Liberals are spreading false information about what is, and is not, a free market.
We’re entrenched in a corrupt system in which the free market has been choked. And few people get that. When I debate anti-capitalists, they point to the U.S. as an example of the failure of the free market. Democrats (American socialists) propagate the incorrect idea that the economy in which we live is “the free market.” They then point out quite correctly how much of a failure our system is, and advocate for more regulation to “protect” us. The only problem is that the failed system they call “the free market” is not the free market at all, but the controlled market, the crony market.
The success of Uber in the face of the taxi companies is the perfect example of free market principles in action. A better model has succeeded and is forcing competitors who previously held a monopoly on the industry to innovate or die.
A free market doesn’t need the government to survive; it can correct itself. It is reliant upon the consumer; it is driven by innovation. In a truly free market, successes would be successes, and failures would be failures.
Small businesses don’t get bailed out when they fail, so why do big businesses? Because they have influence and money that politicians crave like a vampire craves blood. It’s a vile symbiosis.
First, we need to elect a candidate who will shatter with brute force the system of cronyism that’s dominated our republic for decades. Second, don’t ever let a liberal tell you that the economy in which we live is “the free market.” It’s not.
As always, fight their lies with the antiseptic of truth.