Nepotism and Cronyism

Usually people hired for a job in the private sector are qualified for that job. One exception is nepotism where favor is granted to relatives.  We have all seen examples of this.  How many times have we seen thriving businesses fail after being turned over to the founder’s children?

Nepotism is also prevalent in the public sector.  Many politicians hire their family in spite of the fact they have zero qualifications.  Politicians often appoint family to bureaucratic positions.  This is very frustrating to qualified public servants that are trying to do the job.  When the political elite hire or appoint unqualified people, they are wasting our tax dollars and more importantly, it is not in the best interest of the people they serve, or the future of the country.

        Another problem is Cronyism, which is the practice of hiring or doing business with friends.  Cronyism is a factor in the private sector when contracts or business are given to family or friends when there are better options.  As a new car dealer in a small town, I found it challenging to take business from long established competitors that were well known in the area.    

        Cronyism in the public sector is even more dangerous.  Many contracts, loans, grants, and political positions are given to companies and individuals supporting and donating to campaigns.  This crony capitalism between corporate leaders and the political elite threatens the entrepreneurial spirit that made this country great.  More recently, many recipients of stimulus money were large campaign donors.  The return-on-investment for these donations was extremely good in many cases, but some are criminal in my opinion.  Big government controlling the economy results in short-term benefits for the political elite and politically connected, but hurts the country for future generations.

In the public sector, problems with nepotism and cronyism probably date back to the founding of the country.   Ulysses S. Grant is a good example.  He may have been an honest man, a great General and a good President, but nepotism and cronyism filled his Presidency with corruption.

I am an advocate for personal freedom, the capitalist system, and the entrepreneur.  That is what made this country great, not big government.  The problems with nepotism and cronyism in both the private and public sector are not new. 

In the private sector, we must avoid these situations and not make these mistakes as a manager.  In the public sector, we can control nepotism and cronyism by electing individuals that are qualified for the job and will hire and appoint other qualified individuals.  Do your homework, get the facts and vote accordingly.