The American avatar of crony capitalism: Why Donald Trump's domination of the GOP primary is so bizarre

While Donald Trump fancies himself a defender of the free market, his entire career tells a different story

Published September 24, 2015 12:00PM (EDT)

  (Reuters/Lucas Jackson)
(Reuters/Lucas Jackson)

If there was one moment during last weeks Republican debate where Donald Trump actually seemed nervous, or at least surprised -- other than when Fiorina took a jab over his previous comments -- it was when Jeb Bush called him out for trying to influence him as the governor of Florida. Bush claimed that Trump had donated to his campaign in the '90s, and then pushed for him to ease the state's gambling restrictions. Trump, of course, denounced it as “totally false,” and with one of his many cartoonish facial contortions of the night, declared: “If I wanted it, I would have gotten it.”

But it wasn't totally false. According to the Washington Post, documents and interviews show that Trump did indeed attempt to buy influence to open Florida to gambling back in the '90s. And a close ally of Bush, a former lawmaker and current president of Florida State University, John Thrasher, recalls meeting with Trump twice in 1998. “There’s no doubt in my mind that Trump was interested [in opening a casino in Florida], that was the subject of the meetings,” said Thrasher.

Trump was not ashamed of attempting to buy public officials, of course, but of the fact that he couldn’t -- this time, at least. He has been very open about his ability to buy politicians since he began his presidential run, and exposing a case where he couldn't get his way, after all that bravado, has to be kind of embarrassing.

Of course, everyone already knew this about the Trump. The billionaire has been a crony capitalist his entire career, ever since he partnered with the city of New York to build a hotel in the '70s and received a 40-year property tax abatement - saving him tens of millions. One common tactic he has used over the years is to pressure governments into throwing businesses and residents off of their property so that he could build, among other things, an amusement park, an office complex, a parking lot for his hotels limousines, etc.

Who would have thought that a man who bloviates about being a crony capitalist every chance he gets would be leading the the GOP primaries? This is the party that constantly (and ironically) talks about the evils of crony capitalism while preaching a kind of pure capitalism where, if only the government would go away and let private industry thrive, everyone would be equally rewarded for their skill and labor. Right?

Conservatives, libertarians, and progressives alike denounce the cronyist fusion of the state and private industry that Trump represents, but the idea that capitalism can become pure is a fantasy of the right, although it is certainly worth looking at  capitalism through this theoretical lens, as Marx did. The material history of capitalism reveals that crony capitalism and crooks like Trump have always existed and that governments around the world, especially the United States, have long supported the interests of capital over labor. Even during the latter half of the 19th century, a period most believe was a time of “laissez faire” capitalism, bribery and corruption were rampant.

In 1868, for example, New York state legislators were more or less debating who would be given control of the Erie Railroad company after Daniel Drew, a board member of the company, had authorized the printing of thousands of new shares to prevent Cornelius Vanderbilt, who wanted control, from gaining a majority. Legislation on whether the stocks were legitimate followed, and a contest of bribery ensued between two of the most infamous “robber barons” -- Vanderbilt and Jay Gould (a protegee of Drew's at the time). While the true amount spent in bribery is unknown, it has been reported that each side doled out somewhere around $1 million (about $50 million today) to Albany lawmakers. This corruption wasn’t just in New York, controlled then by Tammany Hall, but also in Washington, where the Grant administration, considered by many the most corrupt in American history, went through one scandal after the next.

The truth is, private industry and the state have always been in cahoots, whether it’s the government protecting factories from unruly workers, creating laws in favor of corporations over people, or partnering up with Donald Trump and providing him a 40 year tax abatement. Crony capitalism is nothing new; indeed, it is an inevitable feature of the system. The following passage on the capitalist state, from Karl Marx’s “The German Ideology” (written in 1846) sounds surprisingly like modern America and the relationship between the state and private industry:

“With the development and accumulation of bourgeois property, i.e., with the development of commerce and industry, individuals grew richer and richer while the state fell ever more deeply into debt...It is therefore obvious that as soon as the bourgeoisie has accumulated money, the state has to beg from the bourgeoisie and in the end it is actually bought up by the latter... Even after the state has been bought up [by special trusts, interest groups, lobbying, bribes, etc.], it still needs money and, therefore, continues to be dependent on the bourgeoisie.”

Marx, of course, did not call this crony capitalism, but capitalism.

While the gilded age was cronyism at its finest, it was also the most laissez faire period when we consider that there was virtually no regulation (or very weak regulation) of industry, except towards the end of the century, with the passage of the Interstate Commerce Commission and the Sherman Anti-trust Act, for example. Of course, one only has to read Upton Sinclair’s “The Jungle,” or look at pictures of small children toiling over a factory machine to realize that the invisible hand is cruel and uncaring and must be tamed.

The New Deal era was radical because for the first time in the history of American capitalism, the government was on the side of working people, or at the very least a neutral mediator between classes. Industry was regulated for the benefit of society, a safety net was introduced, all working people were provided a pension -- in other words, the government represented the people.

Today, again, the government seems to represent individuals like Donald Trump more than average working people. This is obviously not surprising, as Trump has been advertising to the American people over the past few months just how he buys public officials. Of course, he gets a pass in many American minds because “he’s a businessman.” And it’s true, he’s not breaking the law, but doing what capitalists have always done, since the Erie War when Jay Gould travelled to Albany with a satchel of $500,000 in cash.

The right and left have widely different proposals on eliminating cronyism. Libertarians (and many conservatives) propose shrinking the state, eliminating regulations, and setting private industry completely free -- in a way, much like the gilded age without the state bribery and corruption. Progressives propose something along the lines of the New Deal, i.e. overthrowing Citizens United, creating a publicly financed campaign system, strengthening our progressive income tax, regulating the market for concerns relating to worker safety/rights, the environment, and consumer safety.

History shows us that the libertarian proposal would result in massive inequality, and most likely destroy the limited democracy that we currently have (libertarians do have a history of defending autocracy while condemning democracy, as long as the free market is promoted -- think of Pinochet, Friedman, and Hayek). The progressive option is obviously more realistic and beneficial to the middle class, although many on the left believe the capitalist system itself must be overthrown -- not a very viable option at the moment.

Regardless, there will always be Donald Trumps in the world of capitalism. The point is to create a government that works for the people instead of the wealthiest. As I have previously written, there is a silver lining in the Trump campaign: he is exposing our corrupt political system by being honest. Not many crony-capitalists will come out and tell the world that they’re a crony-capitalist, but Trump is doing just that.

The Outrageous Truths of Donald Trump

By Conor Lynch

Conor Lynch is a writer and journalist living in New York City. His work has appeared on Salon, AlterNet, Counterpunch and openDemocracy. Follow him on Twitter: @dilgentbureauct.

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