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Political Capitalism

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  • Randall G. Holcombe

Abstract

Problems associated with cronyism, corporatism, and policies that favor the elite over the masses have received increasing attention in recent years. Political Capitalism explains that what people often view as the result of corruption and unethical behavior are symptoms of a distinct system of political economy. The symptoms of political capitalism are often viewed as the result of government intervention in a market economy, or as attributes of a capitalist economy itself. Randall G. Holcombe combines well-established theories in economics and the social sciences to show that political capitalism is not a mixed economy, or government intervention in a market economy, or some intermediate step between capitalism and socialism. After developing the economic theory of political capitalism, Holcombe goes on to explain how changes in political ideology have facilitated the growth of political capitalism, and what can be done to redirect public policy back toward the public interest.
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Suggested Citation

  • Randall G. Holcombe, 2015. "Political Capitalism," Cato Journal, Cato Journal, Cato Institute, vol. 35(1), pages 41-66, Winter.
    • Handle: RePEc:cto:journl:v:35:y:2015:i:1:p:41-66
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    References listed on IDEAS

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    1. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    2. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
    3. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    4. Beard, Charles A., 1913. "An Economic Interpretation of the Constitution of the United States," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 127, number beard1913.
    5. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
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    Citations

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    Cited by:

    1. Farzanegan, Mohammad Reza & Krieger, Tim, 2017. "The response of income inequality to positive oil rents shocks in Iran: Implications for the post-sanction period," Discussion Paper Series 2017-04, University of Freiburg, Wilfried Guth Endowed Chair for Constitutional Political Economy and Competition Policy.
    2. Krieger, Tim & Meierrieks, Daniel, 2016. "Political capitalism: The interaction between income inequality, economic freedom and democracy," European Journal of Political Economy, Elsevier, vol. 45(C), pages 115-132.
    3. J. Zachary Klingensmith, 2019. "Political Entrepreneurs and Pork-Barrel Spending," Economies, MDPI, vol. 7(1), pages 1-17, February.
    4. Randall G. Holcombe, 2017. "Bourgeois Virtues Foster Capitalism; Does Capitalism Foster Bourgeois Virtues?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 32(Winter 20), pages 95-107.
    5. Mohammad Reza Farzanegan & Tim Krieger, 2018. "Oil Rents Shocks and Inequality in Iran," CESifo Working Paper Series 6876, CESifo.
    6. Rosolino A. Candela & Vincent J. Geloso, 2021. "Trade or raid: Acadian settlers and native Americans before 1755," Public Choice, Springer, vol. 188(3), pages 549-575, September.
    7. G. P. Manish & Colin O’Reilly, 2019. "Banking regulation, regulatory capture and inequality," Public Choice, Springer, vol. 180(1), pages 145-164, July.
    8. Kim Leonie Kellermann, 2022. "Political inequality, political participation, and support for populist parties," Constitutional Political Economy, Springer, vol. 33(4), pages 461-482, December.
    9. Mohammad Reza Farzanegan & Tim Krieger, 2018. "Oil Revenues Shocks and Inequality in Iran," Working Papers 1226, Economic Research Forum, revised 18 Sep 2018.
    10. Randall G. Holcombe, 2017. "Political incentives for rent creation," Constitutional Political Economy, Springer, vol. 28(1), pages 62-78, March.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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