Patrick Newman is a prominent young American economist and economic historian who has carved out a special place among researchers of economic history. As a faculty member and professor of economics at the University of Tampa, Florida, he has demonstrated a rare command of economic history, archival documents, and historical analyses through his two books, Born in Freedom and The Progressive Era.
His engagement in researching and teaching economic history and political economy theories led him toward a major project in the history of economics—a work that, instead of repeating clichéd narratives, analyzes the roots of corruption and the nexus of wealth and power.
The two-volume book Cronyism: Liberty versus Power in Early America is the outcome of this very intellectual project. Newman, whose first volume is dedicated to the historical period of 1607–1849, offers a distinct narrative of the genesis of economy and politics in the United States. The first volume of Newman’s research was published in 2021, and the second volume was recently published in 2026.
History as the Arena of Perpetual Battle Between “Liberty” and “Power”
While mainstream history books typically portray the country’s history as the continuous advance of democracy, the flourishing of civil institutions, and the triumph of the free market, Newman uses the analytical lens of Austrian economics to view history as a perpetual battleground between two opposing forces: “Liberty” and “Power.” In his view, liberty represents ordinary people, voluntary interactions, a genuine free market, and entrepreneurs who create wealth without receiving government assistance and rent. Conversely, power represents political elites, bureaucrats, and influential merchants who, rather than submitting to free-market competition, leverage government instruments to secure special privileges, establish monopolies, and amass wealth. This conceptual dichotomy forms the core of Newman’s arguments throughout the two-volume set.
The first volume of Cronyism describes the evolution of political cronyism in early American history, from the colonial era to the Mexican War. Newman argues that cronyism arose from the ongoing conflict between the forces of liberty and power. Whenever Federalists, National Republicans, and Whigs controlled the government, special-interest policies—such as central banking, commercial tariffs, supportive subsidies, and the like—surged. However, after Jeffersonian libertarian-leaning Republicans and Jacksonian Democrats seized the command posts, cronyism moderately declined, though it was not eradicated.
Newman writes: Lord Acton teaches us that “power tends to corrupt,” but the advocates of limited government slowly transformed into the very parties they had previously detested.
This book reveals the neglected portion of history ignored by mainstream American historiography: how politicians routinely dipped their hands into the public’s pockets for the benefit of themselves and their supporters. Newman essentially traces the path of lobbying for legislation and how they profited from public resources.
How Does “Crony Capitalism” Differ from “Capitalism”?
We know capitalism by the free market, innovation, and competition, but Newman draws an argumentative and decisive boundary between free-market capitalism and crony capitalism. In crony capitalism (or economic cronyism and rent-seeking), a business’s success is determined not by offering better and cheaper goods and services to the public, but rather by its proximity to the corridors of power, lobbying, receiving government subsidies, imposing customs tariffs to eliminate rivals, and gaining access to cheap bank credits.
Newman argues that this corrupt and rent-seeking system is neither a modern phenomenon nor restricted to recent decades; rather, in America, its seeds were planted precisely in the foundational decades of the country and even earlier during the colonial era, evolving into a rigid and institutionalized structure by the mid-nineteenth century.
Critique of Alexander Hamilton and Praise for Thomas Jefferson
Newman’s historical analysis in these two volumes heavily focuses on critiquing the policies of prominent figures usually praised as national heroes in textbooks—figures such as Alexander Hamilton. In standard narratives, Hamilton is recognized as the architect of modernization and the father of an efficient financial system.
However, with a critical approach relying on economic evidence, Newman introduces Hamilton and his political followers as the primary architects of crony capitalism. From Newman’s perspective, Hamilton’s economic programs, such as establishing a central bank, creating massive public debts, and imposing heavy protective tariffs, were merely legal instruments for transferring wealth from the pockets of the masses, such as farmers and laborers, to the bank accounts of state-connected elites, speculators, and bankers. In contrast, figures like Thomas Jefferson are presented as representatives of the “Liberty” camp who opposed fiat money, centralized power, and the establishment of a central bank, advocating instead for a government with minimal economic intervention.
State Cartels: From the Federal Reserve to the Food and Drug Administration
During the Civil War, railroad and banking stakeholders lobbied the government for favorable subsidies and restrictions on competitors. In subsequent decades, emerging big businesses attempted to use their special privileges to cartelize markets. Yet relentless competition and the rise of rival interest groups thwarted their efforts. The result was the so-called Progressive Era, a time when Wall Street lobbied the government to create regulatory agencies and commissions that restricted competition and fended off legislative proposals from other interest groups. In the thoroughly expanded government that emerged, the primary loser was the consumer, who was forced to pay higher prices and endure lower quality and less product variety.
In the second volume, dedicated to the 1849–1929 period, Newman details the creation of the state-regulated cartel system in the U.S. economy. From the Federal Reserve to the Food and Drug Administration, the book demonstrates how government regulatory agencies and commissions were engineered by special interests for their own benefit.
The second volume of Cronyism was published with an introduction penned by Thomas Sargent, the 2011 Nobel laureate in Economics.
Crony Capitalism and Economic Crises
One of the most critical analytical sections of this two-volume book ties crony capitalism to major economic crises. In this work, Newman does not merely content himself with a moral or political critique of corruption; instead, by applying the “business cycle” theory in economics, he shows how institutions forged by this unholy alliance of wealth and power dragged the economy into ruin. He argues that the establishment of the First and Second Banks of the United States—prototypes of a central bank—generated artificial booms and inflation in the economy through the creation of artificial money and credit; these booms inevitably culminated in painful collapses, such as the devastating economic panic of 1819.
From this analytical standpoint, economic crises and deep recessions stem not from the nature of the free market, but rather from direct government interventions, manipulation of the monetary system, and the granting of special privileges to political and economic cronies. Therefore, Newman explains that whenever a government acquires the power to intervene in the economy, interest groups will invariably emerge to usurp this power for their own benefit. The significance of Newman’s work lies in teaching the audience that behind many attractive slogans like “social justice,” a complex network of rent-seeking is concealed.
The Conflict Between the “Market” and the “State” and the Birth of “Corporatism”
Unlike the free market, which guides actors toward value creation and the alignment of individual and public interests through the competitive mechanism of profit and loss and voluntary exchanges, the state—as the monopolist of violence—provides a structure rooted in intervention and the redistribution of wealth. This structural asymmetry generates an insatiable incentive for influential groups to capture the tools and levers of government, crafting laws and policies that favor special interests at the expense of the public good—an approach typically masked by the state’s welfare-statist rhetoric.
In Patrick Newman’s book, the dynamics of this historical struggle are explained through the dialectic between the forces of liberty and power. The political fluctuations of early American history show that whenever interventionist parties seized power, the allocation of rents and special privileges peaked, whereas the rise of early anti-centralist parties temporarily subsided rent-seeking trends. The corruptible and expansionist nature of political power ultimately reached its historical turning point between the collapse of the Jacksonian faction in 1849 and 1929: the birth of “corporatism” in the United States. During this eighty-year span, sporadic and scattered rent-seeking morphed into a pervasive system where the government played the role of a grand cartel-maker in the realms of finance, transportation, industry, labor, and health. The persistent efforts of powerful lobbies to suppress the competitive pressures of the free market transformed the state apparatus into an instrument for the centralized regulation and control of the economy. Newman emphasizes that extensive government market interventions and Wall Street’s pervasive dominance over America’s political and economic structure on the eve of the Great Depression do not constitute a failure of the free market; rather, they represent the logical culmination of a political structure built from the outset on the foundation of monopoly, coercion, and the granting of special privileges.
In the final analysis, Patrick Newman’s historical research demonstrates that as long as the tools of government intervention and influence persist in the economy, the genesis and perpetuation of rent-seeking, cronyism, and crony capitalism will plague any nation.
