Crony capitalism
capitalism featuring undue alliances between business interests and politicians
Crony capitalism, sometimes also called simply cronyism, is a pejorative term used in political discourse to describe a situation in which businesses profit from a close relationship with state power, either through an anti-competitive regulatory environment, direct government largesse, or corruption. Examples given for crony capitalism include the obtainment of permits, government grants, tax breaks, or other undue influence from businesses over the state's deployment of public goods, for example, mining concessions for primary commodities or contracts for public works. In other words, it is used to describe a situation where businesses thrive not as a result of free enterprise, but rather collusion between the business class and the political class.
Wealth is then accumulated not merely by making a profit in the market, but through profiteering by rent seeking using this monopoly or oligopoly. Entrepreneurship and innovative practices that seek to reward risk are stifled since the value-added is little by crony businesses, as hardly anything of significant value is created by them, with transactions taking the form of trading. Crony capitalism spills over into the government, the politics, and the media, when this nexus distorts the economy and affects society to an extent it corrupts public-serving economic, political, and social ideals.
Historical usage
The first extensive use of the term "crony capitalism" came about in the 1980s to characterize the Philippine economy under the dictatorship of Ferdinand Marcos. Early uses of this term to describe the economic practices of the Marcos regime included that of Ricardo Manapat, who introduced it in his 1979 pamphlet "Some are Smarter than Others", which was later published in 1991; former Time magazine business editor George M. Taber, who used the term in a Time magazine article in 1980, and activist (and later Finance Minister) Jaime Ongpin, who used the term extensively in his writing and is sometimes credited for having coined it.
The term crony capitalism made a significant impact on the public as an explanation of the Asian financial crisis.
It is also used to describe governmental decisions favoring cronies of governmental officials.
The public source identifies “Crony capitalism” as capitalism featuring undue alliances between business interests and politicians. This brief keeps that definition visible, then builds a research path around Crony, capitalism and featuring.
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This entry incorporates text from “Crony capitalism” on English Wikipedia. Contributors are listed in the page history. Text is available under the Creative Commons Attribution-ShareAlike 4.0 License. Selected authority identifiers and statements are retrieved from Wikidata under CC0; their references and qualifiers remain part of the verification path.