Seems Like Old Times (Crony Capitalism Mix)

Fighting parasitic bureaucracies and crony capitalism, 17th-century style.

‘Pare down the parasitic fringe” of government. “Favour a gospel of work” instead of aristocratic entitlement. “Rationalize finance” and “reverse the Parkinson’s Law of bureaucracy.”

All that sounds like rhetoric from the Tea Party or reform conservatives assailing what they call crony capitalism. But it’s not a contemporary criticism. Those are phrases from a long essay, written more than half a century ago, by the British historian Hugh R. Trevor-Roper, titled “The General Crisis of the 17th Century.”

In his plummy prose, Trevor-Roper sought to explain why revolutions or revolts of varying sorts broke out in the British Isles, France, Spain, Italy, and Germany in the years between 1640 and 1660. He was especially eager to refute Marxist historians’ claims that these were the necessary predicate to what their master proclaimed would be the inevitable and beneficent communist revolutions that unaccountably had not yet occurred.

Trevor-Roper argues that the growing nation-states of the 1500s, engorged with New World silver and inflationary currencies, built up large bureaucracies that stifled trade and manufactures. The Counter-Reformation Catholic Church had a similar effect.

These bureaucracies were particularly expensive because rulers gave their favorites “the right to exploit their fellow subjects,” with monopolies in particular commodities and grants of land they could profitably dispose of. Crony capitalism was squeezing out a potentially productive private sector.

It’s not hard to see some resemblance to America today. The federal-bureaucracy head count is not significantly larger than it was 50 years ago. But the federal impact is much greater, through entitlement programs, subcontracted welfare provisions, and regulation that favors entrenched interests.

Thus the Dodd-Frank Act gives favored financial institutions too-big-to-fail status that enables them to muscle aside potential competitors. The Export-Import Bank provides special favors to a few giant corporations, but there are few loans to start-up businesses.

More