Friday, October 4, 2019

Democrats Right to Criticize Crony Capitalism, Wrong to Conflate It with Innovation

Democrats are right that corruption or cronyism helps drive wealth inequality.

Here's the big mistake that Warren and Sanders make: Their rhetoric suggests that all top fortunes are ill-gotten, and all wealth inequality stem from cronyism.

Most of the top wealth in the United States is earned in competitive industries, not from cronyism.

The broad-brush denunciations of wealth by Warren and Sanders would make more sense in countries such as Russia or Venezuela, where cronyism dominates.

Finally, The Economist created a "Crony capitalism index" using the Forbes list to estimate billionaire wealth in each country obtained from crony and non-crony activities.

The United States is seventh least corrupt of 22 countries, and U.S. billionaire wealth earned in crony activities is only about one-sixth as large as that earned in non-crony activities.

Warren and Sanders are wrong to paint most or all of top U.S. wealth as cronyist.

https://www.nationalreview.com/2019/10/democrats-are-partially-right-about-wealth-and-corruption/

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