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Capitalism vs Crony Capitalism.

Crony capitalism is analogous to a deadly disease, infecting its most vulnerable host, real markets, in such a way that can bring them to their metaphorical knees. Make no mistake about it, crony capitalism is nothing short of a global pandemic and one that is bound to debilitate economic life for decades to come.

As is the case with all such infectious diseases which have brought utter devastation to global economies and societies, crony capitalism generates a widespread sense of panic, angst, fear and a deep sense of uneasiness amongst the most vulnerable members of society that are most likely to suffer from its repercussions. However, unlike a typical death-dealing virus, this particular contaminator has morphed from a previous version of itself that was and still is, paramount to the development of the human race. It’s predecessor, capitalism, is no doubt the finest socio-economic system in the history of human mankind.

Rather than impairing the normal functioning of its host, capitalism provides great strength in the form of abundant economic development and an upsurge in morality. Health, wealth, innovation, inspiration and the fulfilment and prosperity of our lives are all direct consequences of this phenomenon.

Contrary to the biased and bigoted portrayals of anti-capitalists, capitalism does not breed evil or egomania, it in fact provides a level playing field in a society in which innovation, entrepreneurship and economic efficiency can flourish. Capitalism promotes the freedom to make choices. It promotes co-operation. It generates optimism in a world of opportunity, a world in which there lies endless possibilities to build, to expand, and to thrive. Capitalism believes in each and every member of society. It believes that members of society are capable of making good choices and that there is the goodness of the common man. Capitalism promotes equality by focussing on the opportunity and not the outcome. It promotes emulation; a burning desire to develop, to evolve and to innovate so that we can emulate the blossoming members of our society. Put simply, it promotes value-generation and better outcomes for all members of society.

However, despite the positive outcomes of a capitalist society, the presence of anti-capitalist prejudice perpetuated by the many over several generations still remains. This raises several questions. Why is there a misconception that capitalism breads only egoism and non-altruistic behaviour? Why is there a belief that capitalism cultivates self-indulgent traits and a lack of consideration for others? Why is there a growing army of critics portraying capitalism to be nothing but a demonic system, stifling the progression of the human race and hindering societal accord?

One such theory is thus; anti-capitalist prejudice is born out of negligence. Negligence in understanding a very subtle, yet vital difference between two phenomena; firstly, an organism that cultivates liberty, civility and peace and secondly, it’s deformed alter ego, crony capitalism. A society contaminated with self-indulgence, egoism and a lack of altruism is not a society that has been infected with capitalism, rather, one that has been struck down with its contorted adaptation.

Crony capitalism goes against the framework of free exchange of property rights and rule of law of which have become the foundations of a capitalist society. Instead, this contorted adaptation of capitalism savagely uproots the workings of the free market and seeks to embed a new framework in which economic success predicates on each individual member of society’s ability to exploit government power for their own personal gain. Despite the continued economic progression, under the surface, an unsustainable and immoral sub-plot begins to develop.

A sub-plot in which regulators, legislators and governments allow themselves to be undermined by businesses pining for preferential treatment in their pursuit to get ahead of their competitors. Worryingly, markets are becoming infected with this disease at an alarming rate with the ever-increasing use of bailouts, preferential tax treatment and government-provided credit, to name a few. To compound this, incumbent businesses retaliate by entering this immoral market themselves in a desperate attempt to protect their business and their market share from the vultures that are their offending competitors.

Unbeknown to these incumbent businesses, however, is the sheer strength of this crippling disease with which they have been infected. Before they know it, their initial desire to merely defend themselves and combat their injustice develops into a deep-rooted desire for profit generation, through an offensive, as opposed to defensive, use of crony capitalism. This inability to resist temptations to subvert those in power, such as legislators and governments becomes the mechanism in which this disease spreads rapidly through society. Until such a time whereby lobbying for preferential treatment is no longer an easier option to competing for business fairly through consistent innovation and a reduction in costs, the transmission rate of crony capitalism will remain at unmanageable and dangerous levels. Levels at which the true value of a capitalist society can be lost from sight to those who are blinded by the clear, detrimental impacts of its exploitation.

Herein, therefore, lies the explanation behind the birth of, and widespread growth of the misinterpretation of both the morals and virtues of a capitalist society. Indeed, it is not capitalism itself, which contrary to anti-capitalists prejudice does not promote egoism or self-indulgent traits, that causes injustice and immorality in society.

Rather, it is the egoism and self-indulgent traits that characterise certain members of society who choose to abuse the freedom provided by capitalism, which fuels the spread of a crony capitalism disease that has riddled our society. This transmission has created a society in which there is injustice. It has distorted the notions of the common good attributed to a fair capitalist society. Most importantly it has overshadowed the numerous advances capitalism has brought to society and to the progression of the human race.

Immunity from crony capitalism in our society requires a rare, difficult to develop, vaccine. A vaccine in which all businesses would become willing to forgo profits they could realise through immoral preferential treatment. A vaccine that demands moral and intellectual fortitude from each and every member of society and those in power. A vaccine that will eradicate the egoistic, self-indulgent and non-altruistic characteristics that anti-capitalist prejudice has been so misinformed to have previously attributed to capitalism. The egoistic, self-indulgent and non-altruistic characteristics of crony capitalism.

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© 2020 by James Thomas Consulting.