michael wrote: > > Let me speculate on the post below. I suspect that corruption is a necessary > by-product of that sort of development. How much could you make tapping into market >of > the Indonesian poor. The rich and the middle class would want fancy imported stuff. > So, if you are going to be able to round up a bunch of enthusiastic collaborators >with > imperialist development, don't you have to offer them an opportunity to steal? > Corruption in public service often occurs because civil servants are so low paid. In the private sector, there are also the same incentives for corruption especially when corrupt practices are so widespread. Corruption becomes the norm, even to the point where corrupt practices are to be expected (as in Russia today where firms factor in corruption in their cost layouts.) If everyone else is stealing and is dishonest, what is incentive is there for me to play it straight? As you point out above, in the case of Asia, the close links between government/finance/production were key in the building of these economies but also engendered widespread corruption. A necessary by-product. The mainstream accounts of the Asian crisis emphasized corruption or "crony" capitalism as the key cause in the depressions suffered by Thailand, Indonesia and S.Korea. This was mostly for ideological reasons as mainstream pundits cannot accept publicly that instability and periodic recession/depressions are inherent in the structure of the capitalism. In itself, I don't think corruption played that important a role, it is just a symptom of the underlying processes and irreversible problems of the capitalist economy. Witness the crisis of the Sumitomo firm and Barings Bank (as well as many other Asian banks) caused by corruption yet had a negligible effect on the economy. Copper prices did drop slightly but that can be explained by factors other than the fall of Sumitomo. Sam Pawlett
