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You can’t have crony capitalism without big government

Posted: July 15, 2012 at 5:00 pm   /   by

Want a level playing field? Step 1 is to get rid of big government. There is no step 2—the rest mostly sorts itself out.

It is clear big businesses wield great control over the federal government. How do we stop this so-called crony capitalism, or collusion? Professor Jason Brennan argues that while it may seem paradoxical the best solution is to limit government power. He provides two reasons for this. First, the power to “regulate the economy” is really the same thing as the power to distribute favors, which corporations will inevitably seek. Second, regulations actually benefit big businesses at the expensive of small businesses. Less government power means corporations have less power to compete for, fewer privileges to seek, fewer subsidies to enjoy, and no agencies to capture.

Beyond Bailouts: What Is Cronyism?: