Rick Perry and Crony Capitalism

The Review’s own Charles Dameron ’11 had a weekend piece in the Wall Street Journal breaking down a certain controversial aspect of Rick Perry’s governorship of Texas. During his tenure, Texas has maintained a fund to provide money to start-ups within the state, and there is significant circumstantial evidence indicating that Perry supporters may have received preferential treatment from the fund to the tune of several million dollars.

Whatever the true story is about the funds, the entire tale is a cautionary example for conservatives about the importance of distinguishing between being “pro-business” and “pro-free market.” While the two may be easily confused, as both at least stand in opposition to full-blown socialism, they are still quite different. A belief in free markets involves a belief that competitiveness and creative destruction in the economy is a good thing and that the government should have little role in managing the economy. Businesses, on the other hand, have an interest in reducing competition and will be entirely willing to seek and accept government favors if they’re there for the taking. As such, plenty of anti-competive initiatives by the government may be favorable to certain companies but anti-free market in general. So-called “crony capitalism,” where business success is related to having the support of government officials, is not capitalism at all, and conservatives should be wary of any possible cronyism which appears masquerading as a “pro-business” endeavor. 

–Blake Neff