Donald Trump, Crony Capitalist

Luigi Zingales
Luigi Zingales

The sleep of reason produces monsters, at least according to Spanish painter Francisco Goya. What happens when the political reason is intoxicated by vested interests and corrupt campaign financing? The monsters it produces are even more frightening. This is my interpretation of the rise of Donald Trump, as I write in my latest New York Times Op-Ed. 


Read my Op-Ed in The New York Times 


And read what I wrote five years ago on City Journal

That was part of what was cut out of my book “A Capitalism for the People”.


Disclaimer: The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy.


  1. Luigi,

    Your point that Trump has been a Crony Capitalist is certainly correct, and your comparison of him to Berlesconi has been echoed in the liberal press.

    Two points perhaps counter to your take. A CEO has a fiduciary responsibility to shareholders and investors to vigorously pursue profits. Given the deep and often perverse immersion of our governments in business, how can a CEO in good conscience not be a Crony Capitalist? Secondly, Trump has not denied being a Crony Capitalist but rather almost revels in it claiming he knows how the system operates and can therefore reduce it. I am not well versed in things Berlesconi. Did he have a similar contention and if so how did it work out?

  2. Here’s a theoretical trap which essentially requires that, in crony capitalism, either CEOs are fired for giving away shareholder money or, in failing to prove that no bribing intent was intended, that the recipient must necessarily have received a bribe. Which will they own up to?

    “If they aren’t bribing the politicians (defined as expectation of some favour), then the CEO should be fired because they are not respecting their shareholder’s resources. If they are in fact doing their job and treating the donations as profit-maximizing investments, then an expectation of favours is real, in which case there is a bribe.”

    I add a bit of detail to this thinking here:

  3. The analogy with Berlusconi was not started by the liberal press, but by me in 2011 in not exactly a liberal publication
    The second point you raise is very intersting and I address it in a spearate post, whicih I just published.
    On your thrid point, Trump is much more explicit than Berlusconi ever was about cutting institutional corruption in government. Yet, Berlusconi doubled downed running the country in the interest of his companies. I do not think Trump will do that. It is hard to guess what he will realyy do if he were elected.

  4. The way out is campaign contributions which are not pay for play directly but which get access to make your case. Speaking from experience I’d say contributions get CEO’s or companies a “seat at the table”, i.e. the opportunity to be engaged in the dialogue underlying policy decisions and legislation. And it would be foolish for CEO’s not to be so engaged.

    Note that I said echoed by the liberal press, not started.

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