I Now Pronounce You Husband and Wife (or, The Marriage of Crony Capitalism)

This is part of a series called The Free Market Collection. Ideas, principles, and things to know about how the Free Market works. Click here to read more of the series.

 Crony Capitalism

Businesses thrive in a Free Market environment.

Consumers (that’s you) thrive in a Free Market environment.

Once the legislature passes a bill to regulate the food industry, it has opened up the market to corruption. That’s not to say that the Market is perfect and blameless, it does, however, say that corruption between businesses and politicians kicks into gear.

A limited government, is an unobtrusive government. (Click to Tweet)

It doesn’t meddle in the affairs of marketplace innovation, creation, competition, or selling. If businesses or consumers are violated at any time, the government should provide the appropriate means with which to exact justice (the court system).

The government doesn’t enforce justice in the marketplace, it just provides a way for parties to settle their issues.

When the government enforces “justice” (whatever that means), you get crony capitalism, which is corruption between big business and big government.

Once the athletic shoe industry gets regulated, businesses now have an incentive to lobby for political favors. If they don’t lobby, they take the risk of their competition getting there first. And if the competition courts politicians involved in the athletic shoe industry first, new regulations will be beneficial to the competition.

To survive in a government regulated industry, you have to get in bed with politicians. (Click to Tweet)

This marriage of business and government not only hurts competition and innovation, but it also hurts the consumer.

In Crony Capitalism, companies care about politicians, not consumers (that’d be you). From politicians comes their bread. Consumers take a back seat.

To Recap

What is Crony Capitalism? It’s the marriage between big government and big business. Companies are lobbying in legislatures for business friendly bills, and the government is corrupted with business money.

How does it start? Once the legislature begins to regulate industries (and the market in general) businesses are forced to lobby for government handouts and favors. Government intrusion in the market equals Crony Capitalism.

Government doesn’t enforce Market justice: The government’s job is not to manage what goes on in the market. It is there to protect private property and its citizens’ rights. If scandals occur in the marketplace, individuals can use the court system to get justice.

This unholy marriage causes problems: Innovation, competition, consumer protection, and corruption are all affected in a crony environment. It perverts the natural state of the Free Market system.

Politician Centered System: In this marriage, politicians are the VIPs. They control the legislature, they have the power. Companies need to court them to survive in a regulation dominated market. Consumers get pushed to the back of the bus. Pleasing the consumer is no longer how you move ahead.


This is where government regulation leads to. This marriage is the end result of a legislative body hell-bent on controlling the economy.

Consumers and companies might call for regulation and “justice” (whatever that means), but such cries need to be ignored. It only leads to corruption and destitution later on down the road.

The more you understand the workings of the Free Market system the more you’ll come to realize how independent the market can be. (Click to Tweet)

It doesn’t need your help. It surely doesn’t need the government’s help to function properly either.

I’ve been on a Free Market marathon for a while now. It’s because I’m learning so much and want to share it with you, but I never know whether you completely agree with me or not. If you’re enjoying this series let me know in the comments below! If you’re not enjoying this, let me know as well.
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About John-Pierre Maeli

Keeping it simple and crystal clear, because anything else is useless. I'm here to not only inform you, but to also connect with you. That's what The Political Informer is all about. Feel free to follow me on either Twitter or Google+ Let's talk!

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