Gerald O’Driscoll on Crony Capitalism

and the price system.

Compare also Arnold Kling on the looting classes.

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One Response to Gerald O’Driscoll on Crony Capitalism

  1. “Distorted prices and interest rates no longer serve as accurate indicators of the relative importance of goods. Crony capitalism ensures the special access of protected firms and industries to capital. Businesses that stumble in the process of doing what is politically favored are bailed out. That leads to moral hazard and more bailouts in the future. And those losing money may be enabled to hide it by accounting chicanery.

    If we want to restore our economic freedom and recover the wonderfully productive free market, we must restore truth-telling on markets. That means the end to price-distorting subsidies, which include artificially low interest rates. No one admits to preferring crony capitalism, but an expansive regulatory state undergirds it in practice.”

    This is essentially my view, except people admit to it but call it something else. And, indeed, sometimes they have plausible arguments, especially in terms of practical politics. I suppose my main difference with many people is how to reduce the power of this arrangement. I’m just saying it’s really, really, hard, and much more prudent to focus on it than Socialism.

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