'A Strong Press is the Best Defense Against Crony Capitalism'

Luigi Zingales:

A Strong Press is best Defense Against Crony Capitalism: ...the form of capitalism prevailing in most of the world is very distant from the ideal competitive and meritocratic system we economists theorize in our analyses... It is a corrupt form, in which incumbents and special-interest groups shape the rules of the game to their advantage, at the expense of everybody else: it is crony capitalism.

The reason why a competitive capitalism is so difficult to achieve is that it requires an impartial arbiter to set the rules and enforce them. Markets work well only when the rules of the game are specified beforehand and are designed to level the playing field. But who has the incentives to design the rules in such an impartial way? ...

This is where the media can play a crucial role. ...

Inquisitive, daring and influential media outlets willing to take a strong stand against economic power are essential in a competitive capitalist society. They are our defense against crony capitalism. When the media outlets in any country fail to challenge power, not only are they not part of the solution, they become part of the problem.