Beyond Cronyism: Positive and Negative Privilege

Once upon a time, in the undesigned market, economics was simple. The are no mysterious mechanical forces. There is no anonymity; there is me and you and Bill and Joe and all the rest. And each of us is both a producer and a consumer ... The direction of all economic affairs is in the market society a task of the entrepreneurs. Theirs is the control of production. They are at the helm and steer the ship. A superficial observer would believe they are supreme. But they are not. They are bound to obey unconditionally the captain's orders. The captain is the consumer. The consumers determine what has to be produced. If a businessman does not strictly obey the orders of the public as they are conveyed to him by market prices, he suffers loses, he goes bankrupt... (Ludwig von Mises, Human Action).

You would be forgiven for assuming the captain is now the state, an engineer who knows little about rules of the sea and ropes the entrepreneur to the mast. Yet economic life is not so simple. A complicated situation arose due a sociological law described by Popper in The Poverty of Historicism: “You cannot, in an industrial society, organise consumers’ pressure groups as effectively as you can organise producers’ pressure groups”.

Concepts matter beyond words -- the philosopher Immanuel Kant showed -- because the a priori concept categories we employ tend to organise the way we see a problem. The concepts to deal with in this post are ‘cronyism’ and ‘privilege’.

My misgivings about the Crony Capitalism theme in the politics of some of the developed countries stem from it being a partial insight rather than a universal insight into the present danger.