Many decry cronyism as a form of capitalism. In truth, cronyism and capitalism are incompatible. Capitalism is the social/political system that recognizes and protects individual rights—the freedom to live as one chooses so long as one respects the freedom of others to do the same.
Individual rights pertain to freedom of action. They protect an individual’s freedom to take the actions that he deems necessary to sustain and enhance his life. They protect an individual’s freedom to pursue his own personal happiness.
An individual’s rights can only be violated through physical force (or the threat thereof). Only force can compel an individual to act contrary to his own judgment. Robbery, kidnapping, rape, and murder (among other actions) are crimes because they force an individual to act without consent.
Economically, a capitalist society is one that respects the free market. In a free market, individuals can produce, trade, and acquire the goods and services that they choose. In a free market, the government does not intervene and prescribe or proscribe economic activities.
Politically, a capitalist society protects the freedom of individuals espouse the ideas of their choosing. It protects the freedom of individuals to associate with others on the basis of whatever criteria they choose.
In a capitalist society, the interactions between individuals are voluntary and consensual. Individuals are not forced to sacrifice for the public interest. They are not compelled to subordinate their self-interest to the public interest. Indeed, in a capitalist society, government protects the freedom of individuals to pursue their own self-interest.
Cronyism cannot exist in a capitalist society. If government is limited to the protection of individual rights, it cannot dispense political favors. There are no political favors to dispense. With government prohibited from interfering in the voluntary and consensual activities of individuals, politicians and bureaucrats cannot award benefits to some at the expense of others.
America today is not a capitalist society. We are a nation with a mixture of freedom and controls. We are a nation in which individuals hold title to property, but often we are permitted to use that property only as government officials allow. We are a nation in which individuals must often secure government permission before acting as we choose. The Keystone pipeline is just one of countless examples. Such a system is not capitalism. Such a system is fascism.