In Chinese, "nepotism" originally means that someone gets an official position because of his wife or other female relatives. Later, it generally refers to the political and economic benefits obtained by blood relatives, in-laws and close friends, as well as the special protection, promotion and reward given by politics to loyal subjects and followers.

"Nepotism" has a word with roughly the same meaning in English: Crony. According to Longman Dictionary of Contemporary English, Crony refers to members of a group who have close ties and support each other and do not hesitate to take dishonest actions for each other's benefit.

After the outbreak of the East Asian financial crisis, the word crony capitalism quickly became popular in academic circles and the media. Also known as relational capitalism, crony capitalism, crony capitalism, crony capitalism.

The first case that was systematically exposed was the "close friend capitalism" during Marcos' administration in the Philippines. 1986 after the collapse of the Marcos regime, the shortcomings of the Marcos family and the Philippine political and economic system immediately became a hot topic in the international community. According to the common habit of "being ashamed of respecting others" and "beating Reservoir Dogs" in the international community, although Suharto was a typical example of Marcos family rule and corruption in the same period, Suharto's problems were generally exposed and criticized in the middle and late 1990s.

Foreign investors learned a word in the environment of crony capitalism in Asia: "guanxi" (because of its profound meaning, there is no corresponding word in English, so they have to call it "guanxi"). For example, in Indonesia, they understand a "truth", that is, if they want to gain investment benefits in Indonesia, they must seek powerful partners, and the ideal partners are Suharto family members, at least Suharto's closest friends. Without their direct participation, it is difficult for foreign investors to sign investment agreements, and even if they do, it is difficult to operate.

Interviews with representatives of Philippine enterprises and important enterprise groups summarized some main features of Marcos' "crony capitalism" (or crony capitalism):

1. Power is concentrated in the hands of the government, and economic privileges are granted to some small groups of the people by using the functional organs of the government. Marcos's close friends are active in all sectors of the economy, and their power mainly comes from the monopoly power allocated by the government. Agricultural products export, banking, real estate, service industry, gambling, hotel industry, domestic market-oriented manufacturing industry, construction industry and logging and handling industry are always allocated to those close to Marcos.

These so-called close friends are relatives or close partners of the President or his wife. These people were not famous or particularly rich before Marcos came to power. Some of them were Marcos' classmates in law school, such as Roberto Benedicto, the "sugar king", while others were donors during Marcos' first presidential campaign (perhaps equivalent to the "founding fathers").

These close friends' support for the president may be political, economic or both. An export group focusing on agricultural products controls key economic sectors and many voters. These people became political leaders in the region, taking charge of their territory and providing votes for Marcos.

Every close friend of Marcos has a group of small close friends who follow him.

Entrepreneurs who are not close friends of Marcos (or close friends of close friends) have suffered losses in unfair competition. [2]

As for crony capitalism, paul krugman defined it as "maximizing national welfare through the cooperation between enterprises and the government" (the return of depressed economics). He believes that at a certain stage of economic development, such cooperation can certainly lead the strength of the whole country to the most favorable direction for economic development, but over time, it will lead to poor supervision and "moral hazard" of corruption and theft.

According to the understanding of Wu Jinglian and Qian Yingyi, crony capitalism or crony capitalism refers to abnormal or bad market economy. Some of them get rich by seeking rent through power and relationships, and after becoming vested interests, they greatly obstruct various reasonable market-oriented reforms in various ways. I support this realistic definition.

Paul samuelson believes that crony capitalism is a common phenomenon all over the world, and it is also true in the United States. It is an Asian-style crony capitalism popular in South Korea, Indonesia, Thailand and Malaysia (a journey of exploring wisdom-an interview with famous economists from Harvard and MIT).

What is Asian-style crony capitalism? The author believes that Asian-style crony capitalism has the following characteristics besides the commonness of "immoral combination of business and politics":

First, pre-modernity. Under the support of pre-modern political culture, the relationship between protector-protected, benefactor-follower. The powerless lack independent personality and their attachment mentality is very serious.

Second, the system. Many institutional defects, such as authoritarian rule in politics, excessive government intervention in economic life, and imperfect legal system, have provided a profound institutional and policy soil for Asian crony capitalism. This has also led to more diversified forms of crony capitalism in Asia, such as monopoly in policy industries, corruption, kickbacks, holding concurrent positions in enterprises and foundations, profiting from large-scale public projects, and illegally occupying state-owned land.

Third, family. Political interests and economic interests are unusually concentrated along blood relatives, in-laws and tribal relations. Whether it is a political family or a political close friend's family, they can all become super-rich families under this crony capitalism system. The interests of family members and close friends are beyond the proper order of law and market economy, and the amount of corruption is generally huge. In such a country, there is only private politics and no public politics.

Fourth, the whole society. From low to high, cronies and close friends at all levels have formed a pyramid-like network structure of the whole society, and the moral level of civil servants and even the whole society has declined. In particular, the massive corruption of the elite and the powerful class has caused the market economic order to be extremely chaotic and social development to fall into a vicious circle.