Daniel Hannan: Crony Capitalism is Failing; Let’s Try the Real Thing

By Gary P Jackson

I’m hard pressed to remember anyone talking so much about crony capitalism, or as some like FBN’s Eric Bolling call it, “crony socialism,” before Sarah Palin made the term, and the concept of fighting this cancer on society, popular.

Obviously, corruption in government isn’t confined to Washington, or even the United States. Overbearing, overreaching, nanny state governments are ripe for corruption, and cronyism. I’m not sure anyone can put an exact number on the amount of money wasted, flushed down the toilet, simply pissed away, because of cronyism and corruption. But it must be in the hundreds of billions, if not trillions of dollars, world wide.

Daniel Hannan, our favorite Member of the European Parliament, has penned a strong defense of capitalism, real capitalism, and the free market:

The past four years have seen governments throughout the West turn to a ghoulish corporatism, in which selected private companies are bailed out with public money. Understandably, people from across the political spectrum have reacted angrily. The Tea Partiers and the Occupiers are both protesting against the same thing, viz the rescue of large banks by taxpayers.

But whereas the Occupiers, in a slightly inchoate way, believe they are complaining about capitalism, free marketeers point out that, in a capitalist system, bad banks would have been allowed to collapse, their assets sold to more efficient competitors. Bondholders, shareholders and some depositors would have lost money, but taxpayers wouldn’t have contributed a penny.

When we make that argument in full – as I did in a direct exchange with some Occupy LSX types recently (see here) – the typical response is ‘Yeah, well that might be your theoretical capitalism, but we’re dealing with the one that actually exists’.

This is a reasonable objection. We capitalists mustn’t become like those student Trotskyists who were forever insiting that the USSR was a failure of state capitalism, and that proper socialism had never been tried.

What, then, is genuine capitalism? Where can you find it? What changes do we need to make to the present system to get there? I was planning to write a lengthy blog about it, but then I found that Jesse Norman, the ingenious MP for Hereford, had got there first. His paper, The Case for Real Capitalism, is worth reading in full. Having worked in the City before becoming a philosophy don, he understands in practice as well as in theory where the system has gone wrong. And he proposes concrete steps to put it right, to make shareholders think of themselves as owners rather than investors, to incentivise saving and boost competition.

Above all, Jesse understands that freedom is more than just an absence of rules: that it also implies responsibility and (in the absence of external restraints) self-control. It is the difference between what Milton called ‘liberty‘ and what he called ‘licence‘. His paper is distinctly conservative, yet it again suggests that, in practical terms, the differences between conservatives and libertarians can be deferred until the grave.

If you missed it, here’s Hannan’s righteous speech in Parliament from a few days ago.

This is a good time to remind people to pick up a copy of Peter Schweizer’s book Throw Them All Out. Peter lays it all out, exposing just how corrupt our American political system is. As we go into the 2012 election season, it’s a must read. It’s a book you’ll want to share with everyone you know!

I’ll tell you, as someone who is disappointed Sarah Palin hasn’t jumped into the presidential race to save us from the mutts that we have to choose from, I am totally jazzed, and inspired, that Sarah’s message of sudden, relentless reform is spreading. The more people talking about it, and demanding action, the better.

If we don’t all get off our butts and out in the streets working hard to make the reforms happen, we could elect 10 Sarah Palins, and it won’t matter. Reforming government is the fight of our lives, and we need all hands on deck. It’s obvious Sarah is doing her part, now we gotta do ours!