Do you remember when General Electric (GE) supported a bill banning the incandescent lightbulb?
Back in 2007, GE and the lightbulb industry lobbied for a law that intended to phase out traditional incandescent bulbs, forcing consumers to buy more expensive, energy-efficient, compact florescent bulbs. The concern about this law is that it would hurt smaller electric companies that only sold incandescent lightbulbs, but bring major profits to big electric companies, like GE, that sold the more expensive light bulbs.
This is cronyism.
Cronyism is a form of political corruption that occurs when an individual or an organization gets cozy with government officials for benefits they cannot otherwise receive outside that relationship. Under cronyism, Hugh Whelchel says,
Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the ruling government. This favoritism takes many forms, including tax breaks, government grants and other incentives.
This is just one of many examples of cronyism in our economy. In each case, the government gave one party an unfair advantage over others.
But what drives cronyism? An economist might say cronyism is driven by political incentives and greed. But if you asked C.S. Lewis, he might say there’s something more to cronyism—something beyond political and economic gain—that draws us in and deeply speaks to our human nature.
I recently read C.S. Lewis’s sermon titled The Inner Ring, and was surprised how clearly his insight can be applied to cronyism today. He covers the nature of exclusive social circles he calls “Inner Rings,” which exist in every facet of society: church, school, community, work, government, and so on.
Though Lewis does not explicitly reference cronyism in this sermon, his thoughts in this essay can shed light on “The Inner Ring of Cronyism” in today’s political economy.
Lewis says it’s a natural human tendency to desire participation in an inner ring:
I believe that in all men’s lives at certain periods, and in many men’s lives at all periods between infancy and extreme old age, one of the most dominant elements is the desire to be inside the local Ring and the terror of being left outside.
Perhaps cronyism is more difficult to root out than we might expect due to our natural human desire to gravitate towards an inner ring.
Lewis says inner rings aren’t necessarily evil, they are an unavoidable aspect of human life. Rather, it is the motive in seeking the inner ring that can be the basis of judgment.
I am not going to say that the existence of Inner Rings is an evil. It is certainly unavoidable. […] But the desire which draws us to Inner Rings is another matter. A thing may be morally neutral and yet the desire for that thing may be dangerous.
What is the “desire” that draws some business leaders, lobbyists, and legislators to the inner ring of cronyism? Tangible gains like power and profit, perhaps. But Lewis might also argue cronyism is satisfied by a sense of secret intimacy:
We must hope, no doubt, for tangible profits from every Inner Ring we penetrate: power, money, liberty to break rules, avoidance of routine duties, evasion of discipline. But this would not satisfy us if we did not get in addition the delicious sense of secret intimacy.
The powerful social lure of the inner ring that Lewis describes—though not evil in and of itself—can encourage and facilitate the greed and corruption of cronyism.
Lewis says inner rings are dangerous because they can lead to excusing evil, and warns against it:
Over a drink or a cup of coffee, disguised as a triviality and sandwiched between two jokes, from the lips of a man, or woman, whom you have recently been getting to know rather better and whom you hope to know better still…the hint will come. It will be the hint of something which is not quite in accordance with the technical rules of fair play; something which the public, the ignorant, romantic public, would never understand; something which even the outsiders in your own profession are apt to make a fuss about, but something, says your new friend, which…“we always do”…And then, if you are drawn in, next week it will be something a little further from the rules, and the next year something further still, but all in the jolliest, friendliest spirit, it may end in a crash, a scandal, and penal servitude; it may end in millions, a peerage, and giving the prizes at your old school. But you will be a scoundrel.
Cronyism, no doubt, is usually driven by political and economic gains, or other motives we cannot know. But cronyism may also be driven by a powerful social lure, a “delicious sense of secret intimacy,” as Lewis says, and we must treat it as such. Simply limiting the scope of government is not enough to completely root out cronyism since the desire to form inner rings and the temptation to engage in cronyism will always exist in a political economy.
What do you think causes cronyism? Do you think Lewis’ comments can shed light on the issue? Leave your comments here.