Luigi Zingales asserts in this Wall Street Journal op-ed that America is starting to look a little too much like Italy (his mother country) economically.
Increasingly merit has less to do with “success” in the United States than access to persons of power, especially government power.
Zingales explains that if the United States doesn’t address its crony capitalism issue now, when it is already plenty bad, we may soon find ourselves in very bad shape in the relatively near future.
If we don’t find religion pronto we will soon find ourselves mired in an economy which has little dynamism and opportunity (for the great majority) while demands for state largess continually rise. This is not a good mix for any country, and certainly not the recipe for a free country.
(From the Wall Street Journal)
“Once an incompetent appointee finds himself in a powerful position, he tends to hire only subordinates of equal or lower quality, since more talented people pose a threat to him. After a few years, a firm’s human capital will become so eroded that it won’t be able to compete without some form of protection. The more protection it can gain from government, the greater the scope of the cronyism, which in turn makes protection even more necessary. Crony capitalism creates a vicious circle.”