 You must have heard the word crony capitalism. It became very popular about 10 years ago when the media began to use it to describe UPA2 or Manmohan Singh's government at that time to say that all economic policies were being drafted and rules were being bent to have just a few big corporate friends or cronies. These capitalists were getting all big government contracts, they were getting all the licenses, they were being handed out public assets like airports, 2G spectrum, coal mines and government banks were being told to give these few big capitalists mega loans to finance their project. So you add the word crony, a friend to capitalism and you get crony capitalism. Now all economists will tell you that this is an aberration, a perverted version of capitalism which is ultimately about free enterprise. Everyone and anyone who has talent is willing to work hard and take risks, can do well in a proper capitalist economy. But in reality all capitalism is crony capitalism and has always been that and there are two parts to this relationship. The first is that capitalism always inevitably leads to monopolies. Let's take any starting point, let's say 2012, 10 years ago. Imagine at that time there were 10 businesses in an economy and they were already well established and a hundred new people wanted to become entrepreneurs. Some did well because they probably had a new product to sell or had to come up with a new cheaper technique to make things that already existed in the market. The older companies would first try to buy out these new companies and own the new technology and use it for themselves. Remember they're already sitting on a big amount of cash and assets which they can use. Now if the acquisition attempts fail, plan B comes into the picture. The bigger companies would simply drop their prices and take temporary losses. They have deep pockets, they're going to afford to lose money for a few months, even a few years if they wanted. But what about the new businesses? They have invested everything they have and have probably taken loans which they have to pay back. They can't afford to bring their prices down. But people, the average consumer likes low prices. You like it, I like it and after showing some brand loyalty, we too switch to the brand which is charging us a little less. So the newer companies start to lose their market share and from there it is a very short step to making losses and then finally going bankrupt. And what happens then? They have no option but to sell their businesses to the bigger, older company. But now they won't get the same valuation they would have got if they had sold their company in the first place itself. This process inevitably, by the very internal logic of capitalism, leaves behind monopolies in every sector. Oh yes, there are exceptions every now and then when there are fundamental shifts in consumer behavior that is when new companies emerge and succeed. So you have the Apple's, Google's, Facebook, Amazon's of the world, who are all relatively new but are now amongst the most valuable companies in the world. But remember even these are now monopolies. They command the entire market and buy out every new entry. If anything, the digital revolution has created even bigger monopolies than ever before which now actually straddle the entire world. What does that mean for capitalism as a political system? If a few companies, a few families control the entire economy, it is but logical that they would use their money power to control and influence governments and other institutions of the state. So that is the first part of crony capitalism, that it is not only crony capitalists who get all the benefits of government policy but the cronies of capitalists who sit in government in the first place. So that is the first thing to understand that crony capitalism is not just policies being twisted to help cronies but also that cronies are in government and in state institutions, institutions of authority. And yes, once they are in power, what do they do? They make policies to help their friends who put them in government in the first place. So that is what crony capitalism is and all capitalism inevitably leads to that and becomes crony capitalism. This is not unique to India. It was not unique. Into the UP period, it happens everywhere, especially the home state of capitalism, the United States of America. That's the show today. Keep watching, use clicks, subscribe to our channel. We'll get a lot of such videos which mainstream media will never show you. And yes, if you've come all the way through to this video, then just press that bell icon and get notifications on our channel. Also like this video because that will tell YouTube's algorithm that this is a video that more people should watch. Until next time, goodbye.