> Smart, far-seeing capitalists are able to see beyond mere legalities. Too much cronyism makes capitalism less efficient, because it starts to resemble centrally planned economies

A smart, far-seeing capitalist realizes this is a collective action problem, and knows that there is no incentive not to practice cronyism as an individual.

They aren't choosing between having cronyism and not having cronyism... they are choosing between having cronyism and not participating or having cronyism and participating.

https://en.wikipedia.org/wiki/Collective_action_problem