CRONYISM ≠ CAPITALISM

CRONYISM ≈ SOCIALISM, CORPORATISM

June 5, 1998
Dear Colleague,
According to Webster’s, http://www.m-w.com/netdict.htm, cronyism could not be confused
with, nor considered a variant of, capitalism. Let’s get our terms and our priorities straight.
cronyism: partiality to cronies especially as evidenced in the appointment of political
hangers-on to office without regard to their qualifications.
capitalism: an economic system characterized by private or corporate owners hip of capital
goods, by investments that are determined by private decision, and by prices, production, and
the distribution of goods that are determined mainly by competition in a free market.
socialism:any of various economic and political theories advocating collective or
governmental ownership and administration of the means of production and distribution of
goods.
corporatism: the organization of a society into indus trial and professional corporations
serving as organs of political representation and exercising some control over persons and
activities within their jurisdiction.
“Crony capitalism” was not the cause of the trouble. Inflationism and polit ical corruption
allow crony “capitalism” to exist. It would be better to call it economic interventionism for
the benefit of special interests--a mild form of fascism--than to abuse the free market term of
capitalism. The philosophy of the free market holds a lot of answers--yet the difference
between free market capitalism and interventionist political cronyism has not been adequately
considered. M onetary inflation, the mother of all “crony capitalism,” caused the economic
bubble which led to all the other problems. The attached article should be understood in that
light: economic intervent ionis m (for the benefit of political special interest s) enables this
shameful corruption.
Concern for personal liberty is not a subject associated with the crisis and is an ongoing
casualty of past and current policy. A greater concern for individual liberty will be required if
a positive outcome is to be expected from the fall-out of these crises. Let’s hope we can get
our priorities straight. Congress has an obligation not to worsen the crisis by capitulating to
more bailouts and to remain vigilant enough to keep the administration from accomplishing a
similar bailout through extra- legal Executive Orders.
In liberty,

Ron Paul