COLLECTIVIST PERSPECTIVES ON CRONY CAPITALISM

Cronyism, as set of behaviors encompassing rent-seeking and regulatory capture, is recognized as a harmful dimension of market-based economic systems. Some free-market economic theorists argue that cronyism is separate from capitalism, the dominant economic system, and that it is incorrect to conflate the two. Such arguments advance the idea that to reduce cronyism, governments should minimize taxation, regulation, and other forms of intervention. I argue that, although logically coherent in the abstract, this would be harmful in practice, primarily as regulation is a democratic expression of a society's will to restrict harmful forms of extraction, production, and consumption. Moreover, government intervention is often necessary to address economic and environmental inequality, something that continues to worsen in many advanced economies. I suggest two alternatives to radically free-market approaches to reducing cronyism. First, a small government approach that builds on libertarian socialism and anarchism, and second, a contrasting 'big-government' approach that adopts a mission-based framework to empower government by reducing public-private dualisms.