What is Cronyism?
Cronyism refers to awarding jobs and other advantages to one’s friends or close colleagues. Nepotism, while similar, refers to when one shows that favoritism to their family members.
It can appear on a small(er) scale. For example, let’s say a president of a prestigious college has a long-standing friendship with a couple. Throughout high school, the couple’s child has shown little academic aptitude and initiative, but still they decide to apply to that prestigious college. Although the couple has not necessarily requested special treatment for their child, the president passes on word to the admission board to accept the child.
If you’ve ever heard the term ‘the old boys club,’ then you likely know that cronyism can even extend to the private sector.
But typically, cronyism is used to refer to favoritism in politics. For instance, rather than appointing officials based on their merits and qualifications, the president recommends their buddies or ‘cronies’ for positions of power.
DID YOU KNOW?
At one point, U.S. politics overtly involved cronyism. Andrew Jackson, the seventh president of the U.S., established what’s known as a spoils system. Essentially, he appointed close acquaintances and allies to government positions, justifying the move by claiming it would increase efficiency.
Efficiency or Control?
Was President Jackson’s argument wrong, though? Not necessarily.
By awarding political positions to one’s allies, the appointer theoretically experiences less friction than if they had to work with opponents or even neutral parties. The implication is that a government full of allies will approve of what the authority proposes, perhaps because of shared beliefs, a feeling of indebtedness, or friendship. In turn, with everyone in sync, the government runs smoothly and efficiently.
Just think about it. If all Congress members either shared the same views on an issue or had some obligation to vote one way, then the legislation process would proceed without a hitch. No debate. No discussion. No back and forth. Under these unlikely conditions, the government would be more efficient.
Government contracting could be riddled with inefficiencies and waste, resulting in billions of wasted taxpayer money.
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More efficient, but autocratic. Cronyism can really just silence all the varied perspectives one can have on any given issue. It rids us of a true democracy. Also those who not only deserve a major role but will perform it well get looked over for someone with less or no experience. That doesn’t sound at all beneficial for the public. And anyway, who’s to say how long a crony will remain one for life?
Congress passed the Pendleton Civil Service Reform Act (1883) to combat cronyism in politics, after patronage jobs, down to dogcatcher, were being filled by people whose only qualification for employment was their support for a particular party or candidate.
The Fine Line Between Networking and Cronyism
Rarely in life can these matters be so easily disentangled, though. Cronyism, unlike the examples we’ve provided, can often blend with honest networking. To the point that the two can become indistinguishable.
Rarely will someone with absolutely no experience or qualifications actually get a job over a credentialed candidate. But with some experience as well as great interpersonal skills, the less qualified candidate can definitely get the job. There’s the human aspect to most, if not all, jobs that cannot be dismissed.
In all honesty, who hasn’t leveraged a connection for gain? Whether it was for a job, a discount, or some other benefit? Every president and governor have appointed close, highly qualified, deserving associates to key cabinet positions. Most of these appointments do not get challenged, and they shouldn’t (for the most part).
It’s ultimately a matter of intention, the reasons why an authority has appointed one person over another. If it’s primarily because of an existing relationship, then you can confidently call the appointment a case of cronyism. But again, rarely does it come that easy in reality.
Political-Corporate Relations: Crony Capitalism
Cronyism can become a huge economic problem when corporate executives and politicians get too chummy. That’s how corporations can get a direct line to legislators and regulators, leading to a system where moneyed interests rather than public interests prevail.
To a strictly professional extent, the corporate and political world will have a crossover. Some businesses offer necessary goods and services to the public. But when that relationship between corporations and politicians gets dubious, it’s known as crony capitalism.
Where corporations, rather than focusing on innovating and competing, instead attempt to get a bigger portion of the existing pie without actively working to make it bigger. They often achieve this through lobbyists (ex-government workers with political connections) who attempt to influence the legislators and regulators they might have once worked alongside.
FURTHER READING
We have explored the significant role lobbyists play in the U.S. political system. Learn about it in our article: Lobbyist: The Middleman Behind the Rigged Economy
In essence, an old boys club gets established. Wherein the corrupt among the elite can unethically boost their profits by influencing rent-seeking politicians, while the vast majority of people are left out to dry. There have even been alleged cases of corporations rewriting legislation enacted to protect citizens from the high-risk trading that majorly contributed to the 2008 financial crisis.
“From farm subsidies to Medicare, regulatory policy to the tax code, and highway spending to corporate welfare, our government does violence to the public interest by rewarding the interest groups that lobby it aggressively. The total price tag every year extends into the tens of billions of dollars — and beyond.”
Who Pays for Cronyism?
We do. The public.
When cronyism runs rampant between corporations and politicians, business opportunities, salaries, economic efficiency, and competition decrease. On the other hand, individual taxes and prices for goods, homes, medicine increase.
Cronyism, at its worst, persits generationally. The powerful can stay chummy with the powerful, gaming the economy against the vast majority of people.
But you can stop the cycle by participating in elections and backing the candidate who will legislate based on what they believe is best for us. Right now, though, you can immediately start fighting the rigged economy.
On the Zero Theft platform, citizens author theft proposals, and the community decides whether that investigation has convincingly proven (1) theft is or isn’t occurring in a specific area of the economy, and (2) how much is being stolen or possibly saved. Through direct democracy, we can collectively decide where the problem areas are and start working on addressing them systematically.
Standard Disclaimer
The Zero Theft Movement does not have any interest in partisan politics/competition or attacking/defending one side. We seek to eradicate theft from the U.S economy. In other words, how the wealthy and powerful rig the system to steal money from us, the everyday citizen. We need to collectively fight against crony capitalism in order for us to all profit from an ethical economy.
Terms like ‘steal,’ ‘theft,’ and ‘crime’ will frequently appear throughout the article. Zero Theft will NOT adhere strictly to the legal definitions of these terms (since congress sells out). We have broadly and openly defined terms like ‘steal’ and ‘theft’ to refer to the rigged economy and other debated unethical acts that can cause citizens to lose out on money they deserve to keep.