Toward the end of the 1970s, in the dark of the Cold War and through the fog of stagflation, Time business editor George M. Taber had capitalism on his mind. He wondered if the economic system was working. Weeks of research in the Princeton library and collaboration with a coauthor produced a provocative cover story titled, “Capitalism: Is It Working?”
Around the same time, in early 1980, Taber read reports filed by Sandy Burton, “one of Time’s best foreign correspondents,” about the corruption-riddled Philippine economy, presided over by President Ferdinand Marcos, where business associates were friends and friends cut sweetheart deals to dominate the economy and reap the profits. he remembered being “struck by the Philippine distortion of the capitalist system. This was not capitalism. It was a weird distortion of the free market that benefited a few and kept the masses in poverty. The cronies got rich, and the poor stayed poor.”
Taber, a self-professed fan of alliteration, headlined Burton’s report “A Case of Crony Capitalism,” and a new term entered the lexicon.
I’m somewhat surprised that the phrase doesn’t have earlier origins, especially given scandal-ridden administrations at different moments in nominally capitalist countries. Historians have seen fit to give one entire period of United States history from 1870 to 1896, or thereabouts, the name “the Gilded Age,” drawing inspiration from Mark Twain and Charles Dudley Warner’s critique of the 1870s as a period rife with political corruption and unbridled greed.
Then, after brief flirtation with busting trusts and progressive reform, the 1920s roared in with President Warren Harding selecting millionaire Andrew Mellon to run the Treasury Department “under the pretense,” Matt Stoller writes, “that a plutocrat like Mellon was so rich he couldn’t be bought.” Apparently, Mellon was “bored with being a mere tycoon,” and Harding sought to entertain him, perhaps because a Mellon bank had lent $1.5 million to Harding’s 1920 campaign.
Now, here we are in 2024, when a new presidential administration is taking shape with advisors at the right hand of the president-elect and cabinet nominees with staggering wealth. “The total net worth of the billionaires in the Trump administration, as of the morning of Nov. 25, [2024]” Laura Mannweiler calculates in a recent US News article, “equals at least $344.4 billion–which is more than the GDP of 169 countries.”
All of this has me thinking about Taber’s 1980 neologism and the differences and similarities between crony capitalism, old-fashioned corruption, oligarchy, and plutocracy.
michaelrosenow.com 