Crony Capitalism

Crony capitalism is not the same as free markets, it is a politicized economy.

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 legislation and/or regulations which give them forced benefits they could not have otherwise obtained voluntarily. Those benefits come at the expense of consumers, taxpayers, and everyone working hard to compete in the marketplace.

What is Cronyism?

Crony Chronicles

The larger the government, the more cronyism you will have.

Historically, [the dairy] industry has been one of the most visible practitioners of crony capitalism—at least since it began to use government to squeeze out competition from newfangled margarine—a less expensive alternative to butter—in the mid- to late-1800s. The industry later supported a similar push to ban cheap milk substitutes like filled milk—best (or, perhaps, worst) evidenced in the seminal 1938 Supreme Court case United States v. Carolene Products.

Today, as I noted in my AEI talk, large, subsidized, corporate dairy producers have turned their focus to promoting the FDA’s continued prohibition of raw milk.

For example, the Farm Bureau recently passed a resolution supporting only pasteurized sales nationwide. And powerful dairy lobbies opposed a Farm Bill amendment proposed last year by Sen. Rand Paul that would have allowed interstate raw milk sales.

The rest of my talk focused largely on farm subsidies—including new data I presented on how Red (GOP) states receive an inordinate share of these USDA handouts—which should be abolished in all forms immediately (regardless of whether they’re doled out proportionately, or whether Red or Blue states benefit most, or which food producers benefit or don’t benefit from them).

Crony Capitalism vs. American Food: The deadly duo of big government and big food.

Crony Capitalism: A description of capitalist society as being based on the close relationships between businessmen and the state. Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the ruling government in the form of tax breaks, government grants and other incentives.

Coverage of Crony Capitalism at Reason


Unfortunately, it seems that the future Aldous Huxley predicted in 1932, in Brave New World, is arriving early. Mockery, truculence, and minimalist living are best, then enjoy the decline. However, we do need a Revolving Door Tax (RDT) and to prosecute politicians and staff and their “family and friends” who profit from insider trading.

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