Sunday, June 3, 2012

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It's become fashionable in the last few years to denounce "crony capitalism"—the sort of mutual backscratching that often takes place between government and business. "You give me political support, I'll give you a bailout."

It's wrong to call that "crony capitalism." There's nothing capitalist about it. Capitalism means the separation of state and economics. Under capitalism, the government has no special favors or protections to hand out, and so business has no reason to grovel.

But setting that aside, it's true that cronyism is rampant today, as it is in any mixed economy. The blame, however, rests not with business but with government. Because the fact of the matter is, if you want to survive in business today, you had better have friends in Washington.

Just look at what's happening to Apple. According to David Boaz:

Yes, Apple—praised to the skies for being an innovator and job creator by Washington politicians when that narrative serves their interests—has become the latest target of the political class.

According to Politico, the daily newspaper of lobbyists and political consultants, industry giant Apple spent a mere $500,000 in Washington in the first quarter of 2012, compared to more than $7 million Google and Microsoft spent on lobbying and related activities from January through March of this year.

Then Politico lowers the boom: "The company's attitude toward D.C.—described by critics as 'don't bother us'—has left it without many inside-the-Beltway friends."

"Don't bother us"? I say, amen. But Washington says, no way. The attitude on the Potomac is: "Nice little company ya got there, shame if anything happened to it."

Now, do you think Apple is going to spend more money on lobbying in the future or less?