Crony Capitalism Insidious Socialism

April 21, 2013

There was a Crooked Man…

By Don Kirk in Crony Capitalism Insidious Socialism, Democratic Capitalism/Democratic Socialism

Why is crony socialism always known as crony capitalism? When socialist elites and insiders profit personally from market institutions, why is this only called, ‘crony capitalism,’ and not ‘crony socialism’? Why are only capitalists “greedy,” when actually socialists are just as opportunistic and ‘greedy’?

Slovenia is a case in point. Formerly part of soviet Yugoslavia, Slovenia is the prosperous country which divides the impoverished formerly socialist nations of the soviet bloc from the wealthy Western nations to its north and west. What distinguishes Slovenia from other former soviet countries is that it had not dismantled its socialist institutions–such as the national banks–and turned them into competitive private institutions. Fully half of institutional Slovenia is state-owned, which means they are state-subsidized, and subsidy means taxpayers pay for unproductive and uncompetitive enterprises that would otherwise fail. Always, always, always, state-subsidized enterprises are repositories of either incompetent or corrupt privileged elites; insiders who pocket taxpayers’ monies in the name of ‘national pride’ or ‘socialist solidarity’ or ‘public investment.’

Slovenia’s banks are in trouble. No kidding. What a surprise. The government has already bailed them out once, and now it appears the first bailout did not come with reforms, so still another bailout is necessary. But so long as the banks are state-controlled enterprises, the taxpayers of Slovenia will find that bailing out their nationalized/socialized banks will never end. Too understandably, calls for privatizing the banks are bitterly opposed by large companies whose management benefits personally by banks being state-owned, instead of competitive.

Whether capitalist or socialist, monopolies are marked by rising costs and falling value, and Slovenia’s banks are no exception. So why are crooked socialist companies and corrupt socialist managers known as ‘greedy capitalists’?