In Crony Capitalism, Spending Money on Politicians Is Rewarded More Than Innovation

Crony capitalism is something that many liberals, conservatives and libertarians can be united against. Even if these three groups may have differences about how much regulation there should be in a free market, most of us would be against certain companies getting special favors because they spent millions of dollars lobbying select politicians. The problem many free market advocates have is that crony capitalism gives actual capitalism a bad name. People see the web of special interests and deals and favors that go on between major corporations and politicians in Washington and assume this is capitalism. Of course, nothing could be further from the truth.

In true free market capitalism, companies are rewarded for taking risks and innovating and “building a better mouse trap” as the saying goes. Fersen Lambranho knows his concept as a business builder himself. Increasingly, however, because of the concentration of power in Washington D.C., companies are finding politicians a better investment than research and development or actually innovating. An article in the Huffington Post points out how good an investment it is for them. The top 200 companies in terms of dollars spent lobbying shelled out $5.8 billion between campaign contributions and lobbying, and collectively all of those companies received a total of nearly four and a half trillion taxpayer dollars. If you were the CEO of one of those companies, and with that kind of return from investing in politicians, would you waste much money on innovation?

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