Marc Nykolyszyn was the Conservative Parliamentary candidate in Nottingham South at the 2019 general election.
As Donald Trump once again pulls the strings of power from the Oval Office, it’s crucial for us, particularly within the Conservative Party, to reflect on the state of capitalism, free markets and the risks of cronyism.
In his farewell speech, President Biden warned of a looming oligarchy, where a handful of billionaires, such as Elon Musk, wield immense power. This warning resonates not only in America but also here in the UK, where the influence of wealthy individuals and corporations on politics is increasingly evident.
Donald Trump has appointed Elon Musk to lead the Department of Government Efficiency, a move that underscores concerns about the intertwining of government and business interests. This new department aims to streamline government operations and reduce spending, a goal that aligns with conservative principles. However, with the access that Elon Musk has to the President, his significant influence raises important questions about the balance of power and the potential for crony capitalism.
As Conservatives, we champion free markets and capitalism as a force for good that has raised the quality of life for billions of people around the world. However, we must recognise the growing threat of crony capitalism, where government and business form alliances that can undermine competition, stifle innovation, and ultimately harm consumers and voters alike.
Crony capitalism often disguises itself as a commitment to economic efficiency or national interest, but its effects are clear.
A case in point is the financial crisis of 2008. In both the United States and the United Kingdom, government bailouts of banks deemed “too big to fail” exemplified the dangers of such alliances. While these bailouts may have stabilised financial systems temporarily, they came at a high cost to taxpayers and reinforced a system where risks were socialised, and rewards were privatised. This betrayed the free market principle that businesses should succeed or fail based on merit, not political connections.
Another example in the UK is the collapse of Carillion in 2018. As one of the largest outsourcing firms, Carillion held numerous government contracts. This close relationship between government and business created a dependency that, when coupled with Carillion’s financial mismanagement, left taxpayers bearing the brunt of its failure. When Carillion went under, it left thousands of workers unpaid and disrupted critical public services, from delayed hospital openings to schools lacking essential maintenance. This cascade of failures directly impacted taxpayers, who were left to deal with the fallout of unreliable services and increased costs to rectify the damage.
Similarly, in the United States, the influence of major tech companies such as Amazon and Google on public policy and regulation has raised alarms. These companies have not only amassed unprecedented economic power but have also shaped policies to their advantage.
A notable example is Google’s efforts to influence privacy and antitrust laws in the United States. Between 2010 and 2020, the company spent approximately $150 million lobbying Congress to shape legislation in its favour, such as opposing stricter data privacy regulations like the 2012 Do Not Track legislation, which sought to give consumers greater control over their online data. By successfully lobbying against such measures, Google has preserved its ability to collect and monetise vast amounts of user data, often without clear consent. This practice has left consumers vulnerable to data breaches and exploitation, while voters question the accountability of both the government and corporations.
These examples illustrate the dangers of crony capitalism and the need for Conservatives to uphold the true spirit of free markets. Our commitment must be to ensure that economic opportunities are available to all, not just a privileged few who wield disproportionate influence. To achieve this, we must advocate for transparency, accountability, and fair competition in both the public and private sectors.
Now, as the UK Conservative Party finds itself in opposition to a Labour government, this is a pivotal moment for introspection. It’s an opportunity for us to reaffirm our commitment to the ideals of free markets and the vision of a fair, dynamic economy that serves all, not just a privileged few.
By maintaining vigilance, we can prevent the slide into crony capitalism, ensuring that our economies remain dynamic, fair, and beneficial to all citizens. This means revisiting public procurement processes to avoid over-reliance on a few large firms, enacting reforms to corporate lobbying to prioritise public interest over profit, and ensuring that taxpayer funds are not used to perpetuate the principle of socialising losses while privatising rewards.
Now more than ever, we must be the guardians of capitalism, protecting it from the dangers of oligarchy and cronyism while upholding the true spirit of opportunity and growth. By doing so, we can ensure that the free market continues to thrive, delivering innovation, prosperity, and fairness for generations to come.
