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