Sociology Index

Crony Capitalism

Crony capitalism arises when political cronyism extends into the business domain. Crony capitalism corrupts economic and political ideals. In crony capitalism friendships between businessmen and the government and government officials influence the economy. Crony capitalism is favoritism in the distribution of legal permits, special tax breaks and government grants. Crony capitalism is a problem at the federal, state and also local level. We've seen this happen in South Africa and Malaysia. Identity-based politics eventually go towards crony capitalism. - Raghuram Rajan, a professor of finance at the University of Chicago Booth School of Business.

Michael Gove argued that capitalism is failing to deliver. He placed the blame on crony capitalism stating: “Economic power has been concentrated in the hands of a few and crony capitalists have rigged the system in their favour and against the rest of us.”

State Capitalism merely substituted bureaucratic domination by the state and state officials for that of owners of capital. Spirit of Capitalism is methodical and calculating in the pursuit of profit. Karaoke Capitalism is institutionalized imitation, where copycat firms dominate.

CRONY CAPITALISM IN UKRAINE

According to Satu Kahkonen, World Bank Country Director for Belarus, Moldova, and Ukraine. World Bank research has focused on identifying the impact of crony capitalism on Ukraine’s economic performance. Ukraine has struggled with corruption and state capture. Oligarchs dominate large sectors of the Ukrainian economy. In Ukraine 2 percent of firms are politically connected, but they control over 20 percent of the total turnover and over a quarter of the assets of all Ukrainian companies. An engaged and vocal citizenry is Ukraine’s best bet at breaking the vicious cycle of crony capitalism.

Crony Capitalism: Corruption and Development in South Korea and the Philippines. Why has the literature on Asian development not addressed the issue of money politics in Korea?

The Great Deformation: The Corruption of Capitalism in America - revisionist history of how the American state, especially the Federal Reserve, has fallen prey to the politics of crony capitalism and the ideologies of fiscal stimulus, monetary central planning, and financial bailouts. It explains why these warped, crony capitalist policies are an epochal threat to free market prosperity and American political democracy. - A New York Times bestseller.

In Crony Capitalists in Our Backyards: Who They Are, What They Do and How to Fight Back (Voices of the Tea Party) - Amy Handlin demonstrates that crony capitalism is also a problem at the state and local level. Ms. Handlin concludes with a set of practical recommendations that average citizens can undertake to fight crony capitalism in their own back yards.

Books on Crony Capitalism

Crony Capitalists in Our Backyards: Who They Are, What They Do and How to Fight Back (Voices of the Tea Party)

Crony Capitalism: Corruption and Development in South Korea and the Philippines (Cambridge Studies in Comparative Politics).