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the collective agricultural communities or kibbutzim in Israel, would be less vulnerable to the downfalls of communism that plagued the experiments in China’s secular, disparate communities. Indeed, the kibbutz arrangement has outlasted all other modern attempts at communal agriculture and has avoided some of the more violent missteps of China’s state communes; however, these cultural institutions have not been strong enough to completely eliminate the human propensity to take advantage of an easily exploitable system when given the opportunity to do so. Despite the advantages that kibbutzim enjoy by virtue of a shared moral matrix and cultural identity, communal agriculture in Israel is susceptible to the same problems of cronyism, corruption, and clientelism that wracked other communes that lacked any shared values. The early kibbutz experiment that blossomed from the efforts of a handful of radical idealists in the 1920s and 1930s slowly wilted as the leaders aged and became more protective of their power. 10 In spite of the strict tenure limits that the informal norm of rotatzia ostensibly enforced, charismatic kibbutz leaders held onto power for dynasties that lasted for up to half a century. The executive leader rewarded subordinate office holders for their allegiance with increased power, tenure, and luxurious gifts like cars and private flats, while rank-and-file members had to make do with their meager communal rations. For most of their existence, Israeli kibbutzim have not been self-sufficient but rather dependent on critical external financial support from Jewish and Israeli institutions. 11 It is perhaps not surprising, then, that kibbutz elites have consistently dominated the national Israeli political scene COMMUNISM 35
despite comprising only 3 percent of the Israeli population. 12 Additionally, the incentives of the kibbutz prompt high-skilled workers to seek better-paying opportunities elsewhere. One study found that the kibbutz redistribution scheme that moves wealth from value creators to political insiders is associated with an exodus of highskilled workers from the communes. 13 These problems have been percolating among small kibbutz networks for decades and have started to take their toll. In fact, much of the modern academic literature on the kibbutzim discusses the “crisis” that has been gradually undermining the harmony and productivity of kibbutzim over many silent decades. 14 Even scholars who generally support the concept of communal agriculture and are committed to the kibbutzim’s success as a proof of concept for socialism correctly identify the emergence of a self-interested political elite as a primary weakness of the kibbutz arrangement while simultaneously pinning the blame of this outcome on the moderate liberalizing reforms that some kibbutzim have enacted in order to more correctly align value creation with compensation and entice the high-skilled laborers that are leaving the system to move back to their kibbutzim. At the same time, many of the reform proposals that these scholars offer, primarily a return to vertical centralization, are likely to only further aggravate the problems. To engender successful reform, the kibbutzim must emulate the successful reforms of the Chinese people’s communes by diminishing the amount of rents that can be seized through political allocation and increasing the number of avenues through which all commune members can offer and trade value. 36 LIBERALISM AND CRONYISM
Page 1 and 2: LIBERALISM AND CRONYISM Two Rival P
Page 4 and 5: LIBERALISM AND CRONYISM: TWO RIVAL
Page 6: CONTENTS Introduction 1 Chapter 1:
Page 10 and 11: INTRODUCTION People often see polit
Page 12 and 13: who have the power to make decision
Page 14 and 15: CHAPTER 1: LAYING A FOUNDATION Befo
Page 16 and 17: hijacking of the term to describe a
Page 18 and 19: esources can be taken from some for
Page 20 and 21: suffers from “market failure,”
Page 22: is a group of cronies in a dictator
Page 25 and 26: ecause it permits voluntary exchang
Page 27 and 28: people’s economic well-being. The
Page 29 and 30: consumer demands. Examples of rent-
Page 31 and 32: the Politburo and the needs of conn
Page 33 and 34: consider the benefits and costs of
Page 35 and 36: upon state privilege and disproport
Page 37 and 38: their loyalty to the socialist stat
Page 39 and 40: cronyism from gripping every area i
Page 41 and 42: communism are well documented and w
Page 43: Accountability was embodied by refo
Page 48 and 49: CHAPTER 5: FASCISM Fascism, the pol
Page 50 and 51: use the sword of the Nazi state to
Page 52 and 53: planners created a back door for in
Page 54 and 55: CHAPTER 6: CORPORATISM Corporatism
Page 56 and 57: puts men and their possibilities in
Page 58: that this form of guided capitalism
Page 61 and 62: therefore provide sufficient benefi
Page 64 and 65: CHAPTER 8: PROGRESSIVISM Progressiv
Page 66 and 67: people who argue for limited govern
Page 68: Security, Medicare, and Medicaid do
Page 71 and 72: the direct election of senators, ch
Page 73 and 74: argue for narrow individual interes
Page 75 and 76: their roots to diverse sources of i
Page 77 and 78: promises to assume a company’s de
Page 79 and 80: enefits for his former venture capi
Page 81 and 82: prices of firms within the textile
Page 83 and 84: ment the power to make decisions an
Page 85 and 86: of social justice, cronyism has an
Page 87 and 88: for women in the twentieth century,
Page 89 and 90: ecause it advocates granting these
Page 91 and 92: should pay the same as comparable b
Page 93 and 94: way, the US government replaced the
Page 95 and 96:
an individual, social justice advoc
Page 98 and 99:
CHAPTER 12: CRONY CAPITALISM AND DE
Page 100 and 101:
subsidies, political connections di
Page 102 and 103:
CHAPTER 13: INDUSTRIAL POLICY The t
Page 104 and 105:
“cottage industries” that clust
Page 106 and 107:
of complex systems. He applied this
Page 108 and 109:
South Korean industrial policy gave
Page 110:
The degree to which Japan’s and S
Page 113 and 114:
to get involved in lobbying to prot
Page 116 and 117:
CHAPTER 15: LIBERALISM VERSUS CRONY
Page 118:
that power will arise with another
Page 121 and 122:
with power support each other to ma
Page 123 and 124:
an incentive to cooperate for the b
Page 125:
environmental movement often advoca
Page 129 and 130:
6. Ludwig von Mises, Human Action,
Page 131 and 132:
12. James Heinzen, “The Art of th
Page 133 and 134:
CHAPTER 5: FASCISM 1. Peter Temin,
Page 135 and 136:
CHAPTER 8: PROGRESSIVISM 1. Terry L
Page 137 and 138:
16. Bruce Yandle, “Bootleggers an
Page 139 and 140:
3. Eamonn Fingleton, “Japan’s I
Page 142 and 143:
FURTHER READING Acemoglu, Daron and
Page 144 and 145:
ABOUT THE AUTHORS Randall G. Holcom
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