Crony capitalism wasn’t true capitalism when it infected the Philippines in the 1980s, and it is not in the U.S. either, writes George M. Taber — who is credited with inventing the term — in this opinion piece. Taber is a former business editor of Time magazine and the founder of weekly newspaper NJBIZ. He is also the author of Chasing Gold: The Incredible Story of How the Nazis Stole Europe’s Bullion.

Every time I see the words “crony capitalism,” as I did recently in a newspaper’s editorial and a news story, I smile to myself, because I invented the term.

Let me tell you the story.

I was the business editor of Time magazine for much of the 1980s. One of my jobs, early on Saturday mornings when the publication went to press, was to write the headlines. In early 1980, I had a particular interest in a story about the Philippine economy. It had been reported by Sandy Burton, one of Time’s best foreign correspondents, who was a veteran in covering that troubled country following the assassination of opposition leader Benigno “Ninoy” Aquino. She sent an excellent report on the country’s sluggish economy and the corruption-dominated business community fostered by President Ferdinand Marcos. Burton reported that his business associates were his cronies, and that sweetheart deals were the norm. The Philippines was a nominally capitalist country, but these cronies dominated the economy through insider deals and lived in splendor.

At the time and still today, I had a great interest in capitalism as an economic system. In late 1979 and early 1980, I spent weeks researching and writing a special Time cover story entitled, “Capitalism: Is It Working?” The impetus for the story was the stagflation and energy crises that burdened the U.S. in the late 1970s. The idea was proposed by Henry Grunwald, the editor-in-chief of Time Inc. and an intellectual with an outstanding reputation.

“The answer to the question, not surprisingly, was that capitalism could still work, but it had to function properly and get its basic principles right.”

I had the unusual luxury (even for those days) of researching the topic for nearly two months, which included long hours at the library of Princeton University, which was near where I lived. I also had a small mountain of reports from Time correspondents around the world that included interviews with some of the world’s leading economists and historians. The story ended up running twice as long as a normal cover. The answer to the question, not surprisingly, was that capitalism could still work, but it had to function properly and get its basic principles right.

John DeMott, a veteran Time writer, wrote the story, and did a good job, and I edited it. But as I read the reports from Burton, I was struck by the Philippine distortion of the capitalist system. This was not capitalism. It was a weird distortion of the free market that benefited a few and kept the masses in poverty. The cronies got rich, and the poor stayed poor. So early that morning I wrote the headline: “A Case of Crony Capitalism.” I have always been a sucker for alliteration. The article appeared in the issue of April 21, 1980.

I didn’t think much about the title for years until one day in early 1998, when I received a telephone call from a New York Times research assistant working for William Safire.

Safire wrote a celebrated and erudite Sunday column about language. He often recounted the origin of new words or slogans entering English usage. His assistant said that she had done a study and found that the first time crony capitalism had been used was in that Time story of mine. I explained how it came to be (as outlined above), and in his column of February 1, 1998 Safire recounted its origin and more.

“When I see my phrase in the papers I don’t just smile. I wince as well, as I regret the state of affairs that prevails around us.”

Unfortunately, the Philippine economy today is still stuck in a morass of crony capitalism. And a similar cozy relationship between big business and government politicians has, unfortunately, developed in the United States.

Both Republications and Democrats are guilty of sweetheart inside dealings that pay off political donors, who are usually spending corporate funds to buy favors and distort a free economy. Washington is flooded with lobbyists trying to make their special deals, and at times it seems as if lobbying is the nation’s major growth area. Crony capitalism wasn’t true capitalism in Philippines, and it is not in this country either.

So when I see my phrase in the papers I don’t just smile. I wince as well, as I regret the state of affairs that prevails around us.