Too much is being made of The Economists crony-capitalism index

The man who founded the religion which which gave crony capitalism a degree of respectability for too long. J.M .Keynes.
The man who founded the religion which gave crony capitalism a degree of respectability for too long. J.M. Keynes.

We absolutely agree. As we have said in the past the effort is laudable and we will continue to watch it. And it appears that the folks at The Economist are heading in the right direction. The most recent edition is much better than the initial effort for instance. Our hope is that this trend will continue.

The Economist needs to take a broader view of cronyism. Crony capitalists don’t only populate nominally private companies. They run governments across the globe. They are in unions and are in other special interests groups. Where the state hands out money there is always crony capitalism. It’s not just billionaires. We might want to think it’s just billionaires, but it’s not.

In the meantime take a look at the index but consider it with a big grain of salt.

(From The Financial Express)

Much has been made in the Indian media of The Economist’s crony-capitalism index and the decline in the wealth of crony billionaires as a proportion of each country’s GDP, probably spurred by the fact that the newspaper’s special mention of India’s efforts in curbing cronyism coincides with the Indian government’s narrative on the issue – in 2008, The Economist says crony wealth in India totaled 18% of GDP and is today down to 3%, as a result of which ‘the pin-ups of Indian capitalism are no longer the pampered scions of its business dynasties, but the hungry founders of Flipkart, an e-commerce firm’. But before celebrating, keep in mind that a lot of the fall in so-called crony wealth, the world over, is the result of the sharp fall in commodity prices – once these recover, so will the crony wealth; in any case, crony wealth in India has only fallen from 3.62% of GDP in 2014 to 3.36% in 2016, leaving the country’s rank at the same 9th position in both years.

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