It’s important to understand that crony capitalism, the partnering of special interests with government to amass wealth for the partnering entities is a form of socialism. Crony capitalism does not work if there isn’t a government to hand out cash and influence. Government is cronyism’s catalyst.
The bigger the state, the regulations, the favoritism, the programs, the tax burden, the greater the cronyism. Socialism is inherently crony. There are the planners (be they in nominally private industry, or apparatchiks within the state) and the rulers, and then there are everyday folks who must comply.
Eventually the statist system grinds down. To some degree we can see it even here in the mighty USA. All the corruption, the government dealing, the back room deals, the lack of merit based incentives, it all eventually implodes on itself. Just look at Puerto Rico, Illinois, or Detroit.
Socialism is the Big Lie of the twentieth century. While it promised prosperity, equality, and security, it delivered poverty, misery, and tyranny. Equality was achieved only in the sense that everyone was equal in his or her misery.
In the same way that a Ponzi scheme or chain letter initially succeeds but eventually collapses, socialism may show early signs of success. But any accomplishments quickly fade as the fundamental deficiencies of central planning emerge. It is the initial illusion of success that gives government intervention its pernicious, seductive appeal. In the long run, socialism has always proven to be a formula for tyranny and misery.
A pyramid scheme is ultimately unsustainable because it is based on faulty principles. Likewise, collectivism is unsustainable in the long run because it is a flawed theory. Socialism does not work because it is not consistent with fundamental principles of human behavior. The failure of socialism in countries around the world can be traced to one critical defect: it is a system that ignores incentives.