michael wrote:
> Sam, you are correct about the low level corruption, but not about the corruption
>that is
> typical in the upper echelons. How would you evaluate the comparative importance
>of the
> two?
>
I don't think there is much of a distinction between
crimanality/corruption and capitalism as a whole so I wouldn't assign
much weight to corruption per se. No doubt above ground policies, like
the credit squeeze of the early 80's, create demand and thus supply for
dirty money and other forms of corruption/criminality. Corruption
critiques are like conspiracy theories, the problem is not systemic but
the fault of a few immoral individuals. Get rid of these individuals and
everything will be hunky-dory.
At the lower level engaging in corruption may be risky for
individuals and may hurt the reputation and demand of a firm. But beyond
that I don't see a threat to the existence of a firm.
At the higher, executive levels it is sometimes hard to distinguish
corruption from the usual deal-making and from the sub-rosa economy.
Corruption, as in Russia, just becomes part of ordinary business
practice, of ordinary business culture, escalating costs to a point
where it may become a threat to
the overall viability of the company. The distinction between
capitalist/gangster/government official becomes blurred to the point
where no qualitative distinction can be made. This has occurred because
of the vertical integration of criminal enterprises and above ground
business e.g. a drug dealer/capitalist owns an export/import firm that
does legitimate deals who also donates money to political parties and
bribes officials. Because of the billion dollar illegal drug industry,
some banks have become dependent on these cash flows and now plan their
operations in expectation that such flows will continue. The Salinas
regime was a good example of how corruption/criminality and
politics/capitalism coagulate in ruling class circles.
The press is or was
full of
stories of Western businessmen going to Russia (and Asia) only to
encounter
corruption, lax enforcement and non-existant regulatory bodies and
having to pay off everyone to get something done. The
result was some firms could not cut deals and make the investments they
had planned on. In Russia,this was a result of the integration of the
government, foreign&domestic capitalist class, state bank and gangsters
into one entity with its own practices and way of doing business. A
culture of corruption because normal and those firms that can't deal
with it don't survive Like
the old film noir line "Who rules the world?" "The cops, the crooks and
the big rich." That's how it looks to me.
It might be helpful to lay out what we mean by corruption here too.
Michael P., what is your take on the importance of corruption vis-a-vis
the economy? I don't know of many good books except R.T. Naylor *Hot
Money*.
Sam Pawlett
