Economic and Political Injustices Created by Crony Capitalism

Estefanía Campos  | 25 de mayo de 2017  | Vistas: 211

Samuel Gregg considers crony capitalism is very entrenched in today’s global economy and is a problem in both the political right and left, since it creates significant injustices in economy and politics. This has called people’s attention since very recently, even though it is not a new phenomenon.

Gregg explains why crony capitalism creates enormous damage to the reputation of business and creates injustices, and begins by explaining this concept:

In that sense, crony capitalism constitutes a form of redistribution, but is a form of redistribution away from taxpayers, consumers and those enterprises that are focused upon creating wealth, and much more towards those business that are politically connected, politically powerful and politically organized.“

He later discusses who are the crony capitalists and the types of incentives and privileges they receive from the dispensers of favors (legislators, regulators, public officials). He also describes another dimension of crony capitalism: inequality; and says:

All that matters in the crony capitalist world is access of political power, so inequality is no longer about wealth, it's about how much access you have to political power.”

Samuel also provides various historic and recent examples of what crony capitalist behavior looks like, in Western Europe, China, Russia and América. Another key point he addresses is that crony capitalism arrangements are economically unsustainable and how the poor are the most affected, since they don’t have government power, reaffirming that this problem is deeply unjust.

What can we do? Gregg finishes his lecture describing the positive steps and concrete things business owners and political public figures should do to fight this problem and proposes some very detailed solutions. Don’t miss it.