What is Crony Capitalism and what is bad about it?

People around the world are coming to understand what crony capitalism is. This comes to us from Australia. The author still has a bit too much faith in government but generally he gets it.

(From Australia Unwrapped)

In genuine capitalism, an individual takes a risk and invests their funds, expertise and time on a given venture to solve a problem in society or provide a valuable service in exchange for profit. Genuine capitalism allows free trade and private ownership of property. In its pure form, genuine capitalism allows for human progress and leads to innovation.

Crony capitalism, on the other hand, is an economic system that thrives because of the close connection of a few individuals in the private sector with the movers and shakers in government. Since the government acts as regulator and an arbiter of justice in the market, having the close ear of the most important officials in the government can give an individual or a business an upper hand over competitors.

Click here for the article.