한국제도·경제학회

As the government becomes more involved in resource allocation, profits increasingly become the product of political connections. If government control over the economy becomes stronger, cronyism can evolve into fascism, in which people’s economic interests are subordinated to the goals of those who have political power. Crony capitalism can evolve into fascism. This paper prompts the question of how fascism differs from crony capitalism. The answer points toward the way that crony capitalism may evolve into fascism. Crony capitalism is a system that benefits the cronies, including the owners of capital. Fascism is a system run by the political elite which subordinates the owners of capital to the goals of the political elite. In this paper, I will use well-established public choice theories to explain the emergence of crony capitalism and its potential evolution into fascism. Crony capitalism creates the economic prerequisites for fascism because it makes the economic elite dependent on the political elite for their profitability. As long as there is competition for power among political elites, their ability to abuse their power is limited. In the absence of competing political elites, the ruling class no longer needs the support of the economic elite, so their interests can be subordinated to the policies of the state. Thus, nations with robust democratic political institutions that maintain competing political elites would seem to be at low risk for the rise of fascism.