The most ardent advocatess of capitalism, as well as its biggest critics, see “true capitalism” as essentially economic anarchism (more commonly known as “Laissez-faire”). In this sense, yes, true capitalism should avoid cronyism because it would be following the Darwinist principle of “the most-qualified for survival in this unmanaged economy deserves the job.”

But humans cannot be trusted not to engage in cronyism. With no interventionist/organisational force (the government for instance) partaking in the economy, there is no greater power for people to put their faith in, and thus they don’t trust that their friends and family can obtain decent paying work. I would therefore argue that cronyism happens more under true, unchained capitalism.

I mean just look at how business owners behave today, in a world with some restrictions placed upon capitalism. They can’t help themselves.

Answering the question: Crony capitalism and true capitalist is a false dichotomy (distinction), but the USA certainly isn’t true, laissez-faire, capitalist.

Would TRUE capitalism have any problems?

Capitalism, (needlessly) increases competition for resources, access to markets, and even results in fierce competition over abstract things. This is exacerbated the more unmanaged capitalism becomes, so I think True capitalism would have more problems than whatever we live under now.

Is the best thing a mix of socialism and capitalism?

I think so, yes. I am of the view that capitalism is a relic of the past, a developing species or developing society kind of thing, but communism, if it’s the ideal way of structuring society, belongs to the future. A more automated and technologically advanced future.

Ok, I know this will be a bit of a read, but:

Capitalism vs Croney Capitalism

In an ideal scenario, a “free market” is a market that may be regulated but not in such a way that the state uses its institutional powers to play favourites.

Either a good or service can be provided on the market, which means that within the limits of the law any group or individual can provide that service, or the service is banned, meaning it won’t be allowed for anyone to provide.

Depending on who you ask, even simple barriers such as licenses to operate and OSHA guidelines are forms of interference with the free market; the reality is that in practice perfect information does not exist and society at large prefers limiting the ability of the incompetent to do harm accidentally or through negligence, rather than having them punished after the fact.

Croney capitalism is when these barriers are not only present but erected (typically by the government, but it could also be done by other regulatory bodies) in such a way that they deliberately privilege certain preferred entities (the aforementioned cronies) over others.

This, much like redlining was discriminatory to black people despite mentioning them explicitly, does not have to be an explicit bias, it can be as simple as tuning requirements to make them prohibitive to companies not already established in the market to prevent new competition from coming into existence.

The US definitely has a big issue with this at multiple scales.

What is the best solution

I find the best approach to markets is to look at their elasticity.

An example of a highly elastic market could be videogames. Nobody needs videogames to survive, nobody needs a specific videogame to exist, it’s entirely driven by preference and unnecessary voluntary spending, you have full access to the entire market regardless of where you are provided you can pay the price of admission.

Perfect field to build a market around, the client will naturally gravitate to whatever offer they find provides the best value for money, companies will read the signals and adapt, etc.

A highly inelastic market is, for instance, emergency healthcare. Whenever you are in the market for it, you definitionally have an urgent, time sensitive, geographically limited need for the product. You can’t shop around beyond that range and failure to find the product usually means permanent consequences potentially as severe as death.

In that case, a market is a terrible solution to the problem, as markets have no incentive to capillarise at a loss, and want to price their goods and services based on the value to the client, which in this case would be infinite.

A market handling healthcare without a non-profit option competing with it is a recipe for disaster, while flanked by one it becomes extremely beneficial.

Italy and France, 2 of the best healthcare systems in the world in terms of cost per capita and outcomes, are mixed systems where you can go to the state healthcare system for anything and pay a nominal amount (to deter timewasters) or you can get private insurance or pay out of pocket for private alternatives that have to follow the same standards as the public sector at minimum. This helps treating niche conditions or skipping the line on severe common conditions, meaning those who can afford private treatment will lessen the load on the public sector, reducing queues for those who can’t afford it.

In short: The best approach is looking at each market category and making tailored solutions that best fit the kind of good/service being dealt with.

Some markets, like security, are better left in the hands of a few strictly regulated entities, other are better served by a fully free approach (like luxury goods), most important things fall somewhere in the middle, where some state interference/mediation objectively leads to the best outcomes.

Capitalism hates competition.

“Crony capitalism” is a term invented by defenders of capitalism so that they can put all the bad parts of capitalism in a separate bucket and say “that’s not real capitalism.” It’s a “no true Scotsman” fallacy.

This video from Barry’s Economics is a fantastic explanation of exactly what you’re asking.

The whole channel is probably of interest to you.

But in short, yes. What we currently have in the US is a mutated bastardization of capitalism. The wealthy have spent the last ~50 years bending capitalism tward something like a kind of neo-feudalism.

To your second question:
Anyone who thinks one system is going to be the best at everything is just silly. Some markets are best served by capitalism. Others would be socialist. A few critial markets would likely be best served by more communist style, direct government monopoly. Mixing, matching, and even switching systems as markets grow and evolve will be vital in the future.

Capitalism by itself, doesn’t necessarily involve direct government coordination. You have shareholders who invest capital in a business, and collect dividends from that investment, and the government has almost nothing to do with it, aside from having passive (systemic) protections in place that legitimize the exploitation of the working class.

Crony Capitalism is when Capitalists are directly coordinating with government officials in order to maximize their exploitation of the working class. It’s less passively “systemic” and more actively aggressive.

The main problem I see is that earth is not infinite. You have finite resources that are “owned by everyone” by their nature, and capitalism’s competitivness incentivizes their destruction.

World’s countries are allowing companies to destroy the climate, forests, and oceans. They (mostly) know it’s bad, but if they stopped, they would fall behind. And it doesn’t really matter whether the countries are capitalist inside or not - they are competing against each other.

I don’t see why it would be different if instead of countries it would be companies competing. If you have two giant companies fishing in ocean, how would you convince one of them to fish less so it doesn’t destroy the whole fish population? Any fish it doesn’t catch is a gift for the competing company. And sure, two companies can make an agreement, but what if there are hundreds of them? You would think it’s logical for all of them to agree on limits so they don’t kill all the fish - that would be the end every single fishing company. But how is that different from what’s happening with climate change right now?

I’ve seen a video where someone asked a Czech anarcho-capitalist how would the law in ancap work. He responded that the international law is an ancap law. You don’t have a Global State enforcing law on the world’s countries. They do whatever they want on their own property (land), and they form coalitions by free agreement to maintain peace and order and to deal with stuff like climate change.

Well, when I look at the world right now, I feel like that’s the ultimate argument against ancap. We don’t have anything resembling forever global peace, like some people belived after the cold war. The planet is getting warmer and warmer, despite all the global organizations and agreements. Competion is a competition. I don’t really see a way out other than a global state or global anarchy - the leftist kind of one.

And I don’t want to start on why I think a global state is a terrible idea - that’s not what you asked - but I’m obviously for the latter.

Crony capitalism is just as "“No country has achieved real communism” scape goat reply communists say when someone tells them about communist countries atrocities in the past.

What you’re describing isn’t capitalism per se, but a free market. They tend to be correlated, but you can have either one without the other. Capitalism strictly speaking is about private ownership of production—when private investors control industry and reap all the profits after wages and taxes.

Crony capitalism is when capitalists influence the state to reduce wages and taxes, and to manipulate the market at the expense of rival investors. It tends to be the outcome in any state where spending money to influence policy generates a positive return (i.e., most of them).

Would TRUE capitalism have any problems?

Well only a TRUE Scottsman could tell you how TRUE capitalism works.

But OK so in short the gist of theory in capitalism.

Free market ideas - IE capitalism with no government oversite. If a company makes shitty products, someone else will make a less shitty product and all consumers will switch, or if a company starts dumping toxic waste into the drinking water, people would figure it out and stop buying that product… Parts of it are kind of a pipe dream because, some products are inherantly expensive to get started in. Lets face it, Facebook, Windows etc… aren’t dominant because their products are the best, pretty sure you could poll their userbase and find abysmal satisfaction among them. Yet even a giant as big as google, can’t accomplish the resources needed to compete in those markets… let alone a startup out of nowhere.

Now regulations obviously that’s where crony vs regulated comes up in discussion.

Obviously to me the big part is, safety matters. First off the bat, information, consumers can’t even make decisions if they don’t know. If you are putting poison in food, or calling something healthy when it’s loaded with crap, consumers have to know that.

Environmental is a bigger problem. Obviously requiring you to shield and not leak toxins into the drinking water… is a big problem, and it creates a huge problem, as the companys selling gas, or manufacturing chemicals etc… that spend less on safety are at a huge advantage in pricing to the consumer, who can’t tell why the more ethical companies are so expensive, only that they are more expensive. But the more safety that’s required, the higher the bar to entry is…

There are two effects you’re not considering.

First, if you make the best product, everyone else will leave the business, so you become a monopoly. But almost everything has what are called barriers to entry. I can’t open a microchip factory; the investment is absurd. That’s why large companies can easily buy out startups, and that’s why we constantly see market concentration. It didn’t happen before because until the 1970s, antitrust laws were serious; now they’re a joke.

There’s another important issue: in a 100% free capitalist system, it’s assumed that initial bargaining power isn’t equal, so those with more can pressure those with less, making wealth concentration more and more concentrated. Adequate government regulation can help level the playing field between employer and employee, but that’s another thing that hasn’t been improving in recent decades.

as someone has to lead

At this particular moment, the people of Minnesota are self-organizing the resistance against the invasion of their state, with no unified leadership structure in place. So I wouldn’t say it’s always mandatory.

Long live l’etoile du nord.

The actual problem, from an anarchist-anarcho capitalist sense, is that capitalism is morally incompatible with the state or a government conceptually, because given the nature of capitalism—and moreover people in general—free enterprise will also take hold of this all powerful monopoly that is the state, and then pervert it to its own ends.

Hence, crony capitalism.

Arguably, whether capitalism or socialism, when combined with a State, both break down rapidly.