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Monday, 15 June 2015

Leftist Hypocrisy About Crony Capitalism

The accusation of “cronyism” can be applied to just about anything – not just capitalism. In the 20th century, for example, you certainly had crony communism in virtually every communist or socialist state. You also have cronyism in universities (especially in left-wing departments) councils, political parties, anti-fascist groups and so on.

The same is true of that broader term which has become so popular with verbatim Chomskyans and followers of Naomi Klein – 'corporatism'. In this case you have fascist corporatism, Christian corporatism, Communitarian corporatism, kinship corporatism, and even “progressive” and socialist corporatism.

In addition, what's been said about cronyism can be said about corruption and the abuse of power. These two things aren't peculiar to capitalism either. Yet, as we know, all sorts of things have been attributed to capitalism which have been pretty much universal in nature.

Cronyism seems to occur in all systems. That doesn't mean, of course, that we shouldn't do anything about it.

So, yes, businessmen and corporations do use their wealth or status to buy political power and influence governments; as do left-wing think tanks, universities, environmentalists, newspapers, pressure groups, etc.. All this can be dealt with. It has been dealt with. However, that doesn't mean that cronyism has ever been obliterated. It hasn't. It hasn't because no system has ever been perfect. And, as I said, cronyism was much worse in communist countries than in capitalist ones. (Where such cronyism, of course, featured different players.) In addition, well before capitalism, cronyism obviously existed.

The term “crony capitalism” is also a massive generalisation. Are Leftists really claiming that crony capitalism is prevalent everywhere there are businesses or private enterprises? Is every corner shop, every small and large business, every private art gallery, every service, etc. subject to crony capitalism?

Crony Capitalism = Capitalism

Russell Brand & Naomi Klein
Basically, the accusation of “crony capitalism” is just another way which Leftists can use to have a go at capitalism. Yet Chomsky says that the adjective “crony” (in “crony capitalism”) is redundant. The “radical economist and political activist”, Robin Hahnel, believes that too. He sees the term as an “ideologically motivated attempt to cast what is in their view the fundamental problems of capitalism as avoidable irregularities”. Naomi Klein, in The Shock Doctrine (2007), also wrote:

... the alliance between a small corporate elite and a right-wing government has been written off as some sort of aberration – Mafia capitalism, oligarchy capitalism and now, under Bush, 'crony capitalism.' But it's not an aberration....” (316)

Thus those who speak out against crony capitalism are actually speaking out against, well, capitalism; just as those who speak out against what is now called “neo-liberalism” (a term which was resurrected very recently) are really speaking out against, yes, capitalism. (See my “'Neoliberalism'? They Mean Capitalism'.)

In any case, if Leftists were truly against crony capitalism, they would be in favour of the free-market position which states that the government or state should have virtually nothing to do with private enterprise.... Yes, Leftists are against that too. Not only that: free-marketeers argue that crony capitalism is closer to socialism than it is to free-market capitalism. After all, interfering with the market is what socialist governments do, isn't it? What's more, free-marketeers make the obvious point that when the government involves itself in business, true competition is lessened and even ended entirely. Free-marketeers also believe that what they call “natural monopolies” rarely occur without both governments and the wealthy colluding in various ways by placing limits on competition.

Now, is this the type of capitalism Chomsky and Naomi Klein, for example, want? Of course not. To state the obvious, they want socialist collectivism run by people who adhere to the views and values of, well, Chomsky and Klein.

Capitalism = Fascism

There's a dangerous line here; though Leftists aren't always explicit about it.

This is a transitive argument that's often (though not always) hidden in the prose:

         i) Capitalism is crony capitalism (or vice versa)

        ii) crony capitalism is corporatism

       iii) corporatism is fascism

       iv) Therefore capitalism is fascism.

This is the line of argument which has been delivered by Marxists galore; both today and throughout the 20th century. However, it can take different forms.

For example, you can begin with the words “crony capitalism is corporatism” (or even with the inverted “crony capitalism is capitalism”) and then work through the transitive identities to end with “capitalism is fascism”. It doesn't really matter as long as you end with fascism. And that's because all the terms are taken to be virtual (sometimes literal) synonyms.

Despite that argument being applied to all capitalist democracies, what happened in Italy and Germany (in the 1920s and 1930s) has of course been given massive attention by Marxists (hence the conclusion - “capitalism is fascism”). Just as Leftists say that “capitalism inevitably leads to crony capitalism” (e.g. Naomi Klein, Chomsky, etc.); so the older refrain “capitalism always leads to fascism” has been heard throughout the 20th century (especially in universities and in Trotskyist/communist parties or groups).

Thus capitalism isn't only tainted with crony capitalism: it's also tainted with fascism. That's one reason why Chomsky (who said that the United States need to bede-Nazified”), Naomi Klein and Leftists generally believe that capitalism (in toto) must be completely destroyed.

Now for an account of how corporatism is fascism which is ironically (perhaps not ironically) offered by a believer in “free capitalism”. He writes:

I would say that corporatism is just another name for fascism.

Corporatism/fascism is basically when private companies use the government to gain unfair advantages in the market. So it's when the private companies take over the government, and the government and the private sector team up to seize power and screw over the average citizen and take their rights away.”

And this is his preferred alternative:

With capitalism however, the government is small and run by the people and the private sector works for the benefit of the citizens.”

So how can crony capitalism, corporatism and indeed fascism fit the capitalist template when capitalism is surely about providing the goods and services which people want and are prepared to spend money on? Crony capitalism, corporatism and fascism are about governments and businesses/corporations conspiring together to effectively decide which products and services to produce. In these systems, the government basically hands out tax-payers' cash in the form of concessions, subsidies and bailouts to businesses and corporations. The government also creates laws and regulations which are tailor-made to benefit the aforesaid businesses and corporations. All this violates capitalism and comes closer to socialism... surely.

The Socialist Solution

To democratic socialists (if they exist), it's important that governments fully regulate the economy – both in political, social and economic terms. But isn't that plain socialism? Indeed, once the economy and society have been regulated or collectivised, where the hell is the capitalist remainder?

Such socialists also say that that the political power of the wealthy has to be circumscribed and controlled. Yet in a socialist state, the only wealthy people would be socialist politicians and, perhaps, union leaders and Leftist activists. Thus the wealthy (the capitalist wealthy) wouldn't need to be regulated because they wouldn't so much as exist. Instead it would be socialists (of various descriptions) who'd need to be regulated; though since it would be socialists doing the regulating, there would be an obvious problem.


If crony capitalism or capitalism is the problem, capitalism has always proved to be the solution too. Revolution (or the world made in Naomi Klein or Chomsky's image) is an attempt to create utopia. In the process, it will create hell – as the 20th century graphically displayed.

Capitalism is like an animal which evolves to suit the environment. (As the Marxist philosopher Slavoj Žižek, for example, is more than willing to admit.) Capitalism responds to people by giving them what they want, whether that's jacuzzis, horror films or, according to Žižek, post-modern philosophy/politics. It also gives them health foods, clean air, medicines, internet websites (that preach violent revolution), punk, non-polluting cars and books by Chomsky, Naomi Klein and Slavoj Žižek. In addition, it responds to people's demands for the “better use of finite resources”. Though, admittedly, only if that's what people want. So if people want environmentally-friendly goods and books by Al Gore, it will give them such things. And, as the phrase goes, capitalism will “relocate resources” too. Though, again, only if people want this.

Leftists say in response: But what if they don't want these goodly things?

And it's here that Leftists display their undemocratic and even totalitarian instincts. Because people don't want such things (though sometimes they do), the socialist demands that the state provide them instead. Thus people will get the supposedly good things even if they don't want them. Consequently, the government/state will gain complete control because it knows what's good for us in all respects. Goodness will then be imposed upon us from above.... regardless.

And when socialist goodness is imposed it becomes badness – as the 20th century graphically shows.



1) Karl Marx himself must have known that capitalism isn't always cronified. Indeed the success and productivity of Great Britain's Industrial Revolution was partly a result of de-cronification (as it were) – that is, of true competition. What this meant is that people and even politicians took action against cronyism between government and business. More specifically, these people stopped those who wanted to “block innovations” because such innovations were a threat to various business-government alliances.

So, Marx was also against the opposite of crony capitalism; as are contemporary Leftists. Indeed in Marx's own Germany there was far more crony capitalism than in the United Kingdom. For example, there were merchant guilds which put severe limits on competition. Such merchant guilds were actually given that power by governments.

2) I myself have some problems with capitalism. Or rather, I have a problem with some people who happen to also run businesses; as well as governments. One is immigration. In the UK, it can be said that one reason for mass immigration is that businesses require cheap labour and thus cheap workers are imported to increase the profits of certain businesses. Despite saying that, most immigrants end up on the dole and the experiment in mass immigration carried out by New Labour between 2000 and 2010 was done so for ideological reasons, not for reasons of economics. However, mass immigration in the UK was sold as to do with economics - not that the British people were told much about what was actually going on.

3) It's claimed that the term “crony capitalism” was first used as recently as 1997. It referred then to what was going on in Thailand, Indonesia and other countries involved in the 1997 Asian Financial Crisis. Thus its use is almost as new as the term 'neoliberalism' (which became fashionable again very recently). Later the term “crony capitalism” was also applied to Hong Kong, Malaysia and Russia. Here again, this has probably more to do with human nature than it has to do with capitalism. It may also have more to do with Asian states and Russia than it has to do with capitalism.

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