‘Cronyism’ has been back in the UK headlines over the past year. In April 2021, a growing row over lobbying emerged, following concerns over former Prime Minister David Cameron’s role in securing emergency government support for the failed finance company Greensill Capital. Later in the year, the Owen Paterson affair saw the government bombarded with ‘sleaze’ claims in a scandal that began with a breach of lobbying rules. We could take up a whole other article about the current Prime Minister, whose tenure has been described as “a premiership dimmed by the shadows of sleaze and cronyism.”
It’s always interesting to read the mainstream discourse whenever the word ‘cronyism’ pops up in the news. As libertarians, condemning cronyism, corporatism and ‘crony capitalism’ is something we’re very used to. Our commitment to limited government and free markets means that we oppose the often symbiotic relationship between the state and big business whenever this problem rears its head. Corporate privileges, taxpayer-funded bailouts, and artificially-created monopolies are just as inconsistent with our philosophy as are the many more obvious ways that states meddle in markets.
Of course, the mainstream criticisms of crony behaviour rarely recognise this. In fact, they often present these problems as being part and parcel of market systems; a natural consequence of business and trade. Still, maybe ‘our side’ is partly to blame. Any time there is an outcry in the media about cronyism and nepotism, libertarians have a perfect opportunity to shout the message of genuinely free markets from the rooftops; but it seems like we’re never really loud enough.
During the Greensill scandal, Facebook posts from the Labour Party lamented the ‘return of Tory sleaze’ and claimed the Conservatives had ‘voted to cover up Cronyism.’ In the comments sections, critics compared the Conservatives to the mafia and accused the party of ‘lining their pockets at our expense.’
‘Lining their pockets at our expense’ is an age-old complaint thrown at politicians in this country, that highlights just how viscerally angry working people can get at the idea of taxpayers’ money benefitting corporate nepotism. This anger is a perfect starting point for convincing people that government and economic intervention are a terrible mix.
But instead, it seems like all we ever get given is a false dichotomy: that you can either have corruption and oligarchy or egalitarian central planning. Because, we’re told, corruption is a symptom of greed, and greed goes hand-in-hand with free markets.
The problem with this falsehood is that it encourages people to think that central planning, nationalisation, and government collectivism are the only cures to cronyism, corporatism and artificial monopoly. We’re then presented with a mythology where Jeremy Corbyn-type figures are the only possible challengers to a crony status-quo.
And where does that leave libertarians? As I recently pointed out elsewhere, in the minds of many, we’re only interested in upholding that status quo. We’re capitalists, and ‘capitalism’ is the problem; so we’re the status quo, and we’re the problem.
But this line of thinking falls apart as soon as we take a look at what this status quo actually is. It’s a world where huge corporations can call for a $15 minimum wage because they know it will cause problems for smaller competitors. It’s a world where pharmaceutical kingpins can raise the price of a drug by over 5000% because there are no legal competitors on the market. It’s a world where for every government monopoly, there is a ‘private’ monopoly that actually maintains its power due to government privilege.
You have to wonder at the smoke and mirrors required to make people believe that the solution to state-created monopoly is… more state-created monopoly. And yet, people continue to think that increasing government control over the economy is the solution to crony monopolies.
Perhaps Benjamin Tucker said it best, over a century ago: the solution is “not to strengthen this authority and thus make monopoly universal, but to utterly uproot authority and give full sway to the opposite principle – liberty – by making competition, the antithesis of monopoly, universal.”
Crony monopoly and corporate statism are pervasive problems in today’s mixed economy. Liberty and competition are the solutions – let’s make them universal.
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