Friday, October 29, 2010

Crony Capitalism in America

Big companies have always tried to curry favor with government, because their activities perforce are highly influenced by government behavior. Thus, it may seem priggish to think that big companies should be totally outside of politics, and simply react to the environment. Successful large companies may have to play the game, in the same way politicians have to mouth cliches, and promise generally unrealistic objectives.

Yet, I still find it highly disingenuous, hypocritical, and unhelpful to the general commonweal. Fine. They are still pandering pond scum. Not that nationalizing large private companies is better: I'd rather have a scheming FedEx lobbyist than a scheming US Postal Service exec driving policy. Our political process creates too much power in Washington, and everyone who focuses there is either is a sell-out or an empty suit. That this must be so given our political system, which has arisen somewhat endogenously and seems no more corrupt than other systems, is not a reason to like it. "Is" constrains "ought", it does not define it.

So, a reason to hate Vanguard, where a 'vanguard blogger' was defending the stimulus, and found to be a heavy Democratic supporter. That isn't the worst of it:

Vanguard PAC contributions I reviewed is how clear it is that the PAC money (unlike Mr. Utkus's) is not ideological, it's transactional. For example, the PAC gave $30,000 in this cycle to the Democratic Congressional Campaign Committee and $30,000 to the Democratic Senatorial Campaign Committee — and it also gave $30,000 this cycle to the National Republican Congressional Committee and the National Republican Senatorial Committee.


dmfdmf said...

There is no such thing as "crony capitalism". What we have today is an unstable mixture of freedom and controls and its moving toward more and more controls. To blame the lobbyists is to confuse a symptom with the disease. The reality is that the government has unlimited power to tax or regulate any industry into oblivion. In self protection, people are forced to appeal to the government and use the political process to guide policy away from damaging their interests. It is a short step from there to then using the government power to harm ones competitors or curry special favors and privileges. None of this would exist under a government with properly limited powers and what we have today Ayn Rand aptly called civilized civil-war. It can't last for much longer and will eventually have to collapse into a dictatorship or return to freedom and limited government. She explains all of this in her book "Capitalism: The Unknown Idea".

stat arb said...

Dude, what's up with your vocabulary?

Charles said...

There are too sides to crony capitalism - politicians shaking down businessmen for contributions and businessmen buying politicians to implement government policies that create uneconomic business opportunities. The only cure is to radically reduce the scope of government influence over the economy. Then you have the problem of vendor kickbacks on the number 2 pencil contract. Unavoidable but an insignificant price to pay for democracy. The bigger and more intrusive government becomes the more rent-seeking special interest activity we will experience.

Anonymous said...

It's not so simple. Sometimes corporate lobbying (and to a lesser extent contributions) are intended to inhibit the influence of the truly heinous, e.g. those that do anything to stop progress in genetic engineering or nuclear power. Or to fight even more "corrupted" vested interests like sugar, railroads, etc. Often it's not about getting an unfair advantage, but instead about defending against the damages of misinformation.