Lawyers, Guns and Money: Illiberal Societies and the Rise of Crony Capitalism

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There is an old rock station back in Boston which had a special knack for playing those lesser-known B side tracks. I am reminded of one, a late 70s pop song by Warren Zevon with the quirky title: Lawyers, Guns and Money. It chronicles the exploits of an English expat who finds himself ensnared by a Russian Mafioso after a late night gambling. Half way through the second stanza he sings ‘send lawyers, guns, and money!’ Partially for its whimsy refrain and partially because I happen to like obscure 70s pop, the track strikes me as the perfect namesake for a piece on the rise of crony capitalism.

What I mean by crony capitalism is an economic system characterized by intimate, often inappropriate relationships between private business and government; whereby market access and kickbacks are exchanged for political support. The term originates from Tammany Hall, the mid-19th century epicenter of New York state politics and byword for city corruption. To be sure, crony capitalism is nothing new. Clientelism, bribes and inducements have always plagued political systems. Yet there seems to be a new geography of informality– sustained by transnational criminal networks and supported by large capital flows from the Global North– emerging as an organizing principle in illiberal societies. From the Western Balkans to Central America, illiberal regimes partner with private enterprise to lure investment irrespective of concerns over the rule of law: the system works in so long as the money flows, and flow it does in astonishingly large numbers. Take for example BMW’s billion euro investment in a new production facility near Debrecen. Attracted by a head-spinning corporate tax rate of just nine percent and an eminently flexible labour law, BMW has virtually assured Hungary meets its 2019 growth targets.

The Faux Legitimacy of Markets

What strikes me is the interplay between overt criminality, markets and an increasingly authoritarian state apparatus. All of this may not sound very novel. Political scientists have noted a core-periphery dynamic for decades, and authoritarian governments have long profited from foreign investment. Still, the alliance between illiberal forces and free markets has never been stronger. According to a recent report by the OECD, Montenegro touts some of the highest levels of foreign direct investment in Europe. Yet it also holds the unenviable distinction of being ‘one of the most dedicated kleptocracies and organized crime havens in the world’. So what does this all mean? My apprehension not only stems from the faux legitimacy markets offer to illiberal states, but also the dangerous implications for our own societies.  A model is emerging where markets reward reactionary politics– The Dow Jones surges on the news of mass deportations– whilst the President of the United States cavorts with private prison executives.

Stated plainly, I fear the rule of law has taken a back seat to market imperatives not only in developing societies like China, but right here in the EU. As the tendrils of right-wing populism spread, they bring with them a distorting effect. In Orban’s Hungary, knowing which oligarch to call is the key to lucrative state contracts; in Austria, the FPÖ offers to sell political access for cash and in the United States, Donald Trump routinely violates the emoluments clause of the Constitution. What these cases share in common is not only contempt for procedure, but a manipulation of the system for self-gain. Indeed, the journalist Masha Gessen warns of the Russification of our politics. She argues that as illiberal parties make political headway, they will begin to chip away at our institutions. I suspect she is right, but what unnerves me more is the complicity of big business in abetting this erosion.  As Jan Mainka, editor in chief of the German-language Budapester Zeitung put it: “If German executives could vote, 90 percent of them would go for Orbán”.

It is worth reiterating that money in politics is nothing new. Illiberal regimes have profited from markets long before the new set of populist actors. Nevertheless, my aim is to point out the sheer volume of impropriety we observe today. Crony capitalism has moved from the global periphery to the heart of our democracies as a competing script: a new organizing principle for a post-liberal age. The kind of dirty politics the Global North foisted on the Global South for years, from backroom deals to stolen elections has come home on the back of unscrupulous moguls and their populist bidders. It is worth asking: who are the individuals, networks and syndicates profiting from this? The nexus between markets, criminal enterprises and the state should concern us all. A competing script which debases the rule of law should not go unchallenged. Yet somehow I fear that lawyers, guns and money are here to stay.