My column last week focused on how capitalism has been and is being corrupted by cronyism and a “revolving door” between business and government.

Furthermore, for those who want to start a small business, it seems that in this day and age, your business has to fill a small niche role within a local economy to be successful. This is largely in part due to the big businesses that already have cornered the market on most mainstream needs.

Take, for example, someone who recently received their master’s degree or doctoral degree in chemistry. They do not want to join a giant corporation and be another face in a crowd; instead, they feel that they have an excellent business model and want to start their own chemical company. Thanks to some generous (short-term) interest rates on loans or other small business perks that several credit card companies offer, once these perks expire, they are likely to go out of business quickly or be bought out.

Because, let’s face it, a small chemical company can in no way compete with the likes of Dow Chemical or Monsanto, no matter how brilliant the business plan is. And, after all, market economics is supposed to be built on the idea that the most successful business models succeed, not the amount of political clout you can build up. And although I am not expecting a startup company to take down Dow Chemical, it should still be able to succeed over time without the ever-looming threat of being bought out.

Another aspect of American capitalism that has become the status quo that further impedes on free market fundamentals comes in the form of corporate welfare. Corporate welfare is a system in which large corporations, often times companies that have a near monopoly in a field, have money doled out to them on an almost regular basis that are considered excessive or unwarranted from the government in the form of defense contracts or subsidies.

An example of corporate welfare that is a local example would be corn subsidies, in particular the production of ethanol. Without billions of dollars in free money being given out from the government to companies producing ethanol, this alternate form of fuel would likely never have gotten off the ground. This is partly due to the fact that producing the corn needed for ethanol already consumes untold amounts of nonrenewable resources that nearly negates the end product’s effectiveness as a “renewable” source of energy, as many studies have shown.

Four out of 10 ears of corn grown in the United States goes into corn ethanol, which means rising food prices and more hunger throughout the world. And even though, as of this year, the federal government no longer subsidizes ethanol produced from corn, Washington has still paid out tens of billions of dollars for ethanol. Whether this qualifies as being unwarranted or excessive is left to judgment, but I believe the evidence speaks for itself.

Another example of corporate welfare comes in the form of defense contract subsidies, namely the companies Boeing and Lockheed Martin. Rarely do these companies ever have to compete for their contracts, and the Department of Defense seems to just write out blank checks for anything they draw up.

Take the X-35 Joint Strike Fighter, built by Lockheed Martin. Not only has the F-22 Raptor, which is perhaps already the most advanced fighter jet on the planet, never flown in combat, but the tax dollars that went to pay for all 195 of these jets was around $70 billion. However, the projected cost of the X-35 Joint Strike Fighter, which is still in production, is set to cost around $1 trillion over 50 years once the Defense Department orders 2,443 jets — far and away the most expensive defense contract in history.

Boeing and Lockheed Martin have gobbled up virtually every former aviation company thanks to their enormous budgets that are, by far, made up almost entirely from Defense Department subsidies. In this system, defense contractors hardly have to be competitive with one another because they have, by now, fit into their own categories for the products they make. And when there is no competition, how can that be considered a free market?

Crony capitalism is something that both sides of the political spectrum can agree with is harmful to free market economics. Laissez-faire economists obviously do not want government involvement in how businesses are run and feel that crony capitalism is a form of corporatism or something of the like.

Thus, progressive or socialist economists, even if they are against all forms of capitalism, feel that cronyism always coincides with capitalism, as money inevitably leads to political power — in which case businesses will always use their money to influence government policy.

Crony capitalism is an immense problem with American capitalism because it perpetuates a spoils system in which the biggest companies keep their share of the market while throttling smaller companies into oblivion. To overcome this unequal system would be a remarkable achievement.