Monday, February 25, 2019


Socialism and Capitalism are fraught labels that many people will define in their own convenient way. Crony capitalism is surely the wrong capitalism but perhaps defines our unstoppable drift. Both political parties inevitably find cronies with whom they would like to do business: special dispensation in return for political support. Too many businesses sign up for the deal.

Millennial voters are supposedly prompting a shift to the left among would-be candidates for the Democrat Party's nomination for President. Interesting political footwork will be on display for some months. Democrat Party Chair Tom Perez was on one of the news shows this AM showing off some of his dance steps.  Many of the things that many voters seemingly enjoy, he mentioned, were once deemed "socialist." He cited Social Security and minimum wage laws. Others add the modifier "democratic" socialism to distance themselves from the well known socialist catastrophes; Venezuela's Maduro and the plight of his nation are in the news daily. Others prefer current European examples. Arnold Kling notes that they get the story less than half-right.

Russ Roberts and Mike Munger discuss crony capitalism in this week's Econtalk. Is crony capitalism inevitable? Does our Constitution protect us?  Does our culture protect us? Are both layers of protection fraying? Did both political parties (and most economists) wrongly embrace bail-outs in 2008? Did they give away the store? Did they provide ammunition to the left that will be used to challenge defenders of market economics for many years?

I enjoyed the conversation and encourage others to listen to it. I did not come away with the feeling that the drift to cronyism can be arrested. I do not see a modern-day Churchill with the rhetorical and intellectual skills to turn the tide and make the case that "democratic socialism" or cronyism are slippery slopes to avoid. Far from it.