On crony capitalism

A good paragraph, from American Amnesiapage 97:

Government does not always work well — indeed, we wrote this book because it is working less and less well. And when well regulated, markets often work very well indeed. But there is no recipe for prosperity that doesn’t involve extensive reliance on effective political authority. The conservative vision of shrinking government to a size that will make it ‘safe’ from cronyism is the economic equivalent of bloodletting. The cure is far worse than the disease. Prosperous societies need a lot of government. Because they do, the incentives for rent seeking will always be present. Making a mixed economy work requires keeping that cronyism, and the other dangers we have recounted, within tolerable limits — and that requires not less government (or necessarily more government) but effective government.

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