Crony capitalism is when private businesses receive special regulation, tax status, and other favorable government interventions at the expense of other private businesses. This concept is also called corporatism, mercantilism, fascism, and even Communism.
In a crony capitalistic system, the false appearance of free-market capitalism is publicly maintained to preserve the exclusive influence of well-connected individuals.
Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism. Crony capitalism is believed to arise when business cronyism and related self-serving behavior by businesses or businesspeople spills over into politics and government, or when self-serving friendships and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals.
The term "crony capitalism" made a significant impact in the public arena as an explanation of the Asian financial crisis. It is also used to describe governmental decisions favoring "cronies" of governmental officials. In this context, the term is often used interchangeably with corporate welfare; to the extent that there is a difference, it may be the extent to which a government action can be said to benefit individuals rather than entire industries.