Cronyism: Necessary for the Minimal, Protective State

The Independent Review: A Journal of Political Economy, Forthcoming

GMU Working Paper in Economics No. 18-26

19 Pages Posted: 14 Aug 2018 Last revised: 17 Sep 2018

See all articles by Christopher J. Coyne

Christopher J. Coyne

George Mason University - Department of Economics

Abigail Hall

University of Tampa; George Mason University

Date Written: July 30, 2018

Abstract

This paper is part of a symposium on Michael Munger and Mario Villarreal-Diaz's essay, “The Road to Crony Capitalism.” Munger and Villarreal-Diaz force readers to wrestle with the oft-neglected, but crucial distinction between “ideal” capitalism, which is immune from cronyism by definition, and “real” capitalism, which is not. Our paper is motivated by their claim that “it is at least possible that cronyism is intrinsic to, and not separable from, capitalism." We make a stronger claim and argue that, to the extent that capitalism requires the existence of a state, even a minimal state, it also requires some degree of cronyism. Cronyism is inherent in state activities so where the state exists, so too does cronyism. The question is not whether cronyism exists or whether there is a tendency for cronyism to emerge, but instead the magnitude of cronyism given that the existence of the state is its very cause.

Keywords: cronyism, ideal capitalism, real capitalism, military, military-industrial complex

Suggested Citation

Coyne, Christopher J. and Hall, Abigail, Cronyism: Necessary for the Minimal, Protective State (July 30, 2018). The Independent Review: A Journal of Political Economy, Forthcoming; GMU Working Paper in Economics No. 18-26. Available at SSRN: https://ssrn.com/abstract=3223013

Christopher J. Coyne (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

Abigail Hall

University of Tampa ( email )

George Mason University ( email )

4400 University Drive
Fairfax, VA 22030
United States

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