It’s not corruption

May 19, 2010 Editorial

The era of liberalisation that was imposed on us by the IMF/World Bank has wrought a paradigm shift in our conception of corruption that needs comment. Way back in the early 90’s, Francis Fukuyama had declared “the end of history” with the collapse of the Eastern Bloc communist regimes and their fervid embrace of “liberalism” – especially the neo-conservative variant that triumphed in the major western nations. If communism, built on untenable premises, had just been a temporary detour from capitalism, what then could possibly be the contradictions that could drive further changes in capitalism’s inexorable march?
The ignominious fall of the communist challenge, which had placed the state at the centre of the developmental process, further solidified the acceptance and avowal of the “night-watchman” state. It was not just a doctrine that was pushed onto the Third World – even in the US and the UK, the so-called moderates that succeeded the neo-cons continued with the retreat of the state – especially in the area of regulation of the private sector. In the financial sector, regulations after regulations were rolled back. The market would resolve all contradictions and satisfy all needs!
One of the major complaints against government involvement in the economy by the neo-cons was not only that it created a drag on business, but that it facilitated corruption. Government officials could be bribed to favour particular enterprises, so to the extent that there was less governmental involvement, the scope for corruption was lessened. The invisible hand of the market was going to allocate all goods most efficiently in response to the profit motive. Greed was good!
And we arrive at the new way we look at corruption. Of course it was corruption when the government official received part of an enterprise’s profits in the form of bribes or payoffs to look the other way in the face of regulations that were designed to secure the widest possible benefits to the society at large. But after liberalisation, the state – through the removal of the old regulations and the promulgation of new “business-friendly” ones – is now supposed to actively promote the profits of enterprises on the theory that those profits will eventually trickle down and “raise all ships”.
In the rich countries, for instance, the line between investment and commercial banking was erased and the acceptance of exotic “derivatives” which essentially made the investment area into a “casino” according to a staid Bank of England head, led to the funnelling of trillions of dollars into the pockets of a few. And this was not corruption.
After all, the new super rich declaimed, no laws were broken. Never mind that the laws were reframed to favour that elite group, and that bribes (in the form of directorships and stock offerings) flowed like a river to the lawmakers. Today, that perspective has resulted in a massive increase in the concentration of wealth in the hands of an oligarchy and the concomitant immiseration of the vast mass of the population. It has also resulted in the collapse of the developed economies as the purchasing power of those masses has plummeted. Today, as fingers are being pointed in the rich countries, it is ironic that by and large, the premises of the new order are largely unquestioned.
And it is so in our own country that has so recently jumped onto the liberalisation bandwagon. There are none as enthusiastic as the newly converted. The state cannot build a new half-a-billion stelling – this is a job for the private sector. Never mind that the job is being farmed out by the Local Government Ministry and not the old Public Works Department that presumably has some institutional memory about stellings. This is not corruption –no law was broken. So what if the half-a-billion is gone; more millions have been spent and we still have no stelling.
We can dole out billion-dollar contracts for roads though jungles to companies that have never built a dirt track and not call it corruption. After all no laws were broken: the bidding process, we are assured, was followed. We should admire an entrepreneur that can bid on a project without even a plan.
Fip! Fip! Hooray!