Income Inequality: When Capital Works for the Few Instead of the Many

Income inequality is not an accident.
It is the predictable outcome of a system where the rules are written to benefit those who already have power.

Crony capitalism turns the free market into a rigged market.
And in a rigged game, the house always wins.

The Architecture of Unequal Wealth

Under true capitalism, competition forces companies to innovate, improve, and lower prices.
Under crony capitalism, the opposite happens.

A handful of politically connected corporations receive:

  • Tax loopholes

  • Special subsidies

  • Government contracts

  • Bailouts

  • Regulatory shields

  • Lobbyist-crafted advantages

These advantages act as weapons, creating what economists call “moats” — barriers so large that no small business can ever swim across them.

  • If you are a startup trying to disrupt a major industry, you are not just competing with a company.
    — You are competing with Congress.
    — You are competing with lobbyists.
    — You are competing with a system designed to protect incumbents.

The Middle Class Gets Squeezed

When a small number of corporations dominate an industry:

  • They control wages.

  • They control prices.

  • They control supply chains.

  • They control political influence.

Workers become price-takers instead of value-makers.

Stagnating Wages

For decades, worker productivity has grown dramatically, but wages have barely moved.
Why?
Because fewer employers mean less bargaining power.

If there are only two hospitals in a region, they can dictate nurse salaries.
If there are only three shipping companies, they can squeeze port workers.
If there is only one major meat processor, they can push down farmers’ earnings.

And when wages stagnate while profits rise, inequality balloons.

Wealth Concentrates at the Top

Crony capitalism creates what economists call “rent-seeking behavior”—profits earned not by adding value, but by controlling rules and limiting competition.

This is how CEOs earn 350x more than workers.
This is how hedge funds make billions while teachers struggle to pay rent.
This is how wealth gets concentrated in fewer and fewer hands.

Crony capitalism doesn’t just widen inequality.
It locks inequality in place.