European crony capitalism

A post today on The Final Word, a Prague-based email bulletin put out by a local English-language Czech news digest, got me thinking. Titled “PPF spreads its tentacles,” it’s about the secretive Czech corporate conglomerate PPF and how it uses its media holdings to advance its numerous business interests.

It’s long been the Czech Republic’s dirty little secret that it’s one of the bastions of corruption and crony capitalism in the middle of Europe. After basking in the glow of much of the 1990s as the “star pupil” of economic transition, it took a much deserved fall from grace starting in the late ’90s, with much publicized cases like Ron Lauder’s suit against the Czech Republic over TV Nova giving the little nation plenty of bad press. Vaclav Klaus, ex-premier and now the president, has often been complicit in securing the country’s dubious reputation, if not the very nexus of crony capitalism. Today, far-flung provinces of the empire like Estonia and Slovenia appear clean as a whistle compared to the Czech Republic.

This is all pretty old news. But what strikes me today is how this compares to other European countries.

I’m not an expert on the media and business sectors in other countries, but given what’s happened in Italy with Berlusconi’s consolidation of the media, does the Czech Republic simply have a bad reputation? What about France, which is hardly a model of transparency with its history of outrages at the intersection of politics and business?

Truth be told, I think the Czech Republic is still worse off in this regard than other countries. For one things, high-level corruption is more or less tolerated here — even expected, on some level. At least Berlusconi’s shenanigans have captured the attention of the outside world.

6 thoughts on “European crony capitalism

  1. One of the things I suspect about EU expansion is that Europe’s more corrupt and less secure states are joining the EU for the very reason a lot of northern Europeans oppose it: Better to be ruled by officious busybodies in Brussels than sleazy crooks at home. This has certainly been true of Italy to some degree, and probably Greece, Spain and Portugal as well. It would hardly be unprecedented for Czechs to feel the same way.

  2. I’ve heard exactly this argument from Czechs across the ideological spectrum, who have completely lost hope in their elected leaders and their ability to deal with corruption. To them, the EU is a paragon of “clean hands,” which, comparatively, it may be.

  3. Unwilling to deal with corruption as well as actual violence, as Doug pointed out in his link to the news about Tomas Nemecek.

    Czechs often ask me what people think of the country abroad, meaning in the west. At the moment they are sharing front page space on the website of Reporters sans frontieres with Iran, Pakistan, China, Egypt, Libya, Cuba and … the US.

  4. Nearly 400 years ago, Francis Bacon wrote that knowledge is power. Today, we see that maxim play out in many ways in the political and economic spheres in both rich and poor countries.

    In government, a high level of secrecy often enables those in authority to hoard their knowledge to increase their power, hobbling people’s ability to take part in the political process in a meaningful way. Behind closed doors, corruption thrives. So too in the private sector, enabling corrupt corporate captains to keep shareholders in the dark and line their own pockets.

    Czechoslovakia pays lip-service to the value of
    transparency and openness in government.
    If we think that our generation will see improvements in our lifetime we fail to understand how ruthless communism and unchecked capitalism can take advantage of apathy. Things will have to get really bad before the middle classes realise that exchanging one brutalism with another is not the way to create a better future.

    As Kierkegaard once put it: ‘Life is lived forward and understood backward.’
    Websites like
    would be an ideal examples for exposing the weaknesses of crony capitalism Czech.

    Former communists are usually the ones who have the venture capital so the fleas only changed the coat of ism; most of the political power seems to be in the similar hands and minds as whatever intelligence there was before 1989…

    We should always recall that Roosevelt diagnosed a growing awareness among Americans of genuine injustice like any anarchist would!

    Roosevelt believed, as few other politicians did, that the comforts of middle-class life blinded many of his fellow countrymen to the hardships endured by the majority of humankind – hardships whose effects might be lessened by political action.
    And so, although Roosevelt opened his first address to Congress by pledging himself to fight the ‘evil’ of anarchism, he moved immediately into a much longer section of his speech titled ‘Regulation of Corporations.’ He proposed to address the great ‘social problems’ and the ‘antagonism’ of the day – the radicalism that threatened Americans’ safety by trimming the excesses of unfettered capitalism.

    Sure there is lots of rubbish on the intenet, but bloggers spread the knowledge as no other medium before ever could. We are rather lucky self publishing generation and without any doubt we know more about corruption then any other generation before us. To boot, we are exposing it in every corner of this world…

    Tips and tools on how to separate wheat from chuff:

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