Crony capitalism
From The Art and Popular Culture Encyclopedia
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Crony capitalism is an economy in which businesses thrive not as a result of risk, but rather as a return on money amassed through a nexus between a business class and the political class. This is done using state power to crush genuine competition in handing out permits, government grants, special tax breaks, or other forms of state intervention over resources where the state exercises monopolist control over public goods, for example, mining concessions for primary commodities or contracts for public works. Money is then made not merely by making a profit in the market, but through profiteering by "rent seeking" using this monopoly or oligopoly. Entrepreneurship and innovative practices, which seek to reward risk are stifled, since the value-added is little by crony businesses as hardly anything of significant value is created by them, with transactions taking the form of "trading". Crony capitalism spills over into the government, the politics and the media, when this nexus distorts the economy and affects society to an extent it corrupts public-serving economic, political and social ideals.
See also
- Corporatocracy
- Government failure
- Government-owned corporation
- Inverted totalitarianism
- Iron triangle (US politics)
- Licence Raj (concept in Indian political-economics)
- Patrimonialism
- Political family
- Political machine
- Regulatory capture
- Rent-seeking
- Stamocap
- State capture
- Supercapitalism
- Zhao family
