From the exploitative moneylender of iconic movies like Mother India to the factory owner who employs goons to beat up workers who dare to stand up against exploitation, the protagonist of business has tended to be portrayed, in the public discourse, as being deficient in ethics. Of late, a subspecies of the immoral tycoon has grown larger than life: the crony capitalist.

Liberals loathe him. Acolytes of those in power adore him, as an appendage of their true object of veneration. Other big businessmen vie to fill his shoes. Those of a more modest shoe size simply envy him. But shorn of hype and hypocrisy, how much an enemy is the crony capitalist of common good and fellow businessmen?

Businesses produce things people need to live a full life. They produce jobs and incomes, earn foreign exchange by means of exports, with which to pay for imports. They generate revenue for government. Big businesses do complex things vital for collective well-being, but are beyond the scope of small enterprises.

Business can hurt the common good as well, by anti-competitive behaviour, and failing to make optimal use of the public's savings mediated to it as capital. This tendency is controlled by laws and regulation. The worry is that cronies can bypass regulation.

First, some clarity on what constitutes a crony capitalist. Is just about any business bigwig seemingly close to the powers that be automatically one? Not really. It would not suffice even to define a crony capitalist as one whose success depends on close proximity to government. In some sectors of business, close association with the state is a given, whether in defence production or infrastructure.

Preferential treatment is a necessary condition, but not sufficient. A sufficient condition is bestowing preferential treatment on arbitrary grounds.

Consider inclusion in a business delegation to accompany the PM on a state visit abroad. It is a privilege not available to all. But it would entail cronyism only if those who did not represent India's diverse business strengths also got selected, purely on the strength of personal equations with those in power.

Cronyism subsists in selective grant of privilege - funds, environmental clearances, policy and tax exemptions, or ad-hoc policy innovations - or selective disprivileging of a rival, based on arbitrary choice. On such criteria, India does not have many cronies. This is not entirely surprising.

Given the failure to institutionalise political funding - openly collected donations of political parties are a tiny fraction of funds they actually spend, and a tinier fraction of funds they collect - Indian democracy meets political expenses out of money taken off the books of companies. When Sarojini Naidu rued the cost of keeping Mohandas Gandhi in poverty, and when RSS workers praise the benevolence of nationalist-minded sethjis, the reference is to money given and taken informally. There need not always be a quo for every quid proffered. But even if it is untied goodwill that is the goal of donations, these establish a framework for competitive procurement of patronage.

Missing institutional funding works to constitute political parties and the state into an equal-opportunity prey for prowling corporate predators sniffing out patronage to be extracted. Who emerges successful in this competitive predation is up to the predators. The prey is indifferent to the identity of the winner, structurally speaking.

In other words, competitive strength - not so much a history of past association - determines who gets to be top crony. We have before us the history of large companies that were favoured with lucrative defence contracts, failed to make good, and were ruthlessly dumped.

Does this mean that the state never favours cronies? In a process of corporate takeover, the government has chosen to pressure target companies to sell out to a favoured raider, by sending in investigators of economic wrongdoing. This is a case of discrimination against one entity and in favour of another.

This newspaper has written editorials criticising the bidding process for airport privatisation. A single bid parameter - how much revenue would be shared with the government - without a performance criterion to minimise cost, the paper argued, favours large companies with the clout to get the government to raise user development fees. While normal operators bid reasonable numbers, someone confident that, once the bid is won, revenues can be increased to recover the extra revenue being handed over to the government, can bid extravagant payouts to emerge on top.

Such deviations from fair conduct are visible, and amenable to legal and political challenge. If those in a position to raise that challenge choose not to see what is afoot, cronyism would succeed. But, otherwise, India's legal and political system favours contestation, rather than cronyism.

India's political economy, in other words, favours state support for national champions, not incompetent cronies who thrive only because of patronage. Such support has been integral to capitalist growth anywhere, from East India Company and American railroad companies to the South Korean chaebols and Chinese industrial stars of today.

When cronyism raises its head, popular vigilance should strike it down. But the discourse should not confuse national champions with cronies.