- The Washington Times - Monday, September 26, 2011


Despite the incredible progress made in China over the years, John Lee is perfectly right to be troubled by the rampant cronyism that has become a staple of the Chinese economy (“China’s state-owned billionaires,” Commentary, Friday).

However, with the still-massive role the Chinese government plays in the lives of its citizens, this worrying trend should not be surprising.

Wherever you see bigger government, always expect more corruption and cronyism. As economist Milton Friedman once put it, “With some notable exceptions, businessmen favor free enterprise in general but are opposed to it when it comes to themselves.” Wherever businessmen can use state power to keep out competitors or gain political privileges, they probably will.

Playing fair is scary. It’s not surprising that most people would prefer to have the deck stacked in their favor if possible. And when bureaucrats are dealing the cards, it is possible.

The only effective way to eliminate cronyism is to strike at its root by reducing the power of government over the economy. This would remove the option of government favoritism as a business tool and force business leaders to compete in the quality and price of their products rather than trade in political favors. It would create a truly level playing field in which everyone, not just the politically connected, can compete.

I think it’s about time that the free market, rather than the government, decide the winners and losers in China. After all, that is what real capitalism is all about.





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