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with power support each other to maintain that power.
Those are the cronies.
The people who have power support each other to
maintain their power, whether the collective decisionmaking
group is a democracy or a dictatorship, a socialist
society or a capitalist one. Pure capitalism is the liberal
economic system, but by interjecting government control
through taxation, subsidies, regulation, and even the
specter of government interference, a liberal economic
system moves toward government control, which produces
cronyism. Critics of crony capitalism tend to view
themselves as critics of capitalism, but cronyism in crony
capitalism exists because of growing government interference
in the economy through taxation and regulation,
not because of mutually beneficial market exchange.
Families tend to be run like communes, as collective
organizations where members contribute for the good of
the group, so it is instructive to consider why this arrangement
works. Everyone in the family is a crony because
each member relies on personal relationships with
other family members for resources and support. When
groups—even families—grow large enough that individuals
have much closer personal relationships with some
members of the group than with others, the collectivism
of the group evolves into cronyism. Collectivism only
works in groups that are small enough that everyone in
the group can be in the same group of cronies. The model
of the family, while it works well for a small group, does
not scale up to function well with larger groups. Beyond
small groups, liberalism allows individuals to deal with
other individuals knowing that their arrangements will
be for their mutual benefit. Voluntary exchange for the
112 LIBERALISM AND CRONYISM