Socialist Worker

How corruption is built into capitalism

Issue No. 2218

The scandal of the Pakistan cricket team’s apparent cheating dominated the news for a week.

Corruption is usually presented as an aberration from the norm—engaged in either by “uncivilised” people in poorer countries or by a few rotten apples in the West.

World leaders claim that the systems they uphold are incorruptible. But this isn’t true. Corruption is central to the whole capitalist system.

Under capitalism a small, unelected minority of rich people compete against each other and live off the back of ordinary people’s work. Our rulers never see their constant transfer of money from the poor to the rich as robbery—but that’s exactly what it is.

The whole system rests on this theft, even if the bosses stay within the official “rules” of the system.

But fierce competition drives bosses, and the governments that back them, to go even further and use overtly corrupt methods to get one over on their competitors. This corruption is the logical result of the intense competition between bosses and states.

Individual capitalists and world leaders will often speak out against corruption. They will uphold the official “rules” of the system and condemn those who step outside them. They can see that the system needs some kind of regulation and trust to work smoothly.

Damage

But what they mean in practice is that they don’t want their competitors to use corrupt methods to get the upper hand.

Competition pushes bosses to use any means necessary to get ahead—but they hate the idea that their competitors can do the same.

For all the rhetoric, the West has been happy to deal with corrupt and anti-democratic regimes, as long as they defend its interests. The list seems endless, from Fulgencio Batista in Cuba, through Mobutu Sese Seko in Zaire to Saddam Hussein in Iraq.

And, of course, there is the long line of corrupt pro-Western leaders in Pakistan including Benazir Bhutto and Nawaz Sharif.

The US’s big worry in Pakistan now is whether it will be allowed to continue its war on the Pakistani Taliban, not the corruption of the government.

The effects of corruption may cause more obvious damage in poorer countries and rightly spark anger and resistance among ordinary people in those countries.

But the tentacles of control generally originate in the West.

For example, look at the British Aerospace (BAE) scandal that emerged in 2006. The company had spent £600 million bribing Saudi Arabian princes to secure an arms deal. As the truth became public both the arms company and the princes turned to Downing Street.

New Labour repeatedly stopped inquiries into the corruption. BAE paid a £288 million bribe to courts in the US and Britain to be let off. The state became complicit in corruption that originated in a company.

Bizarrely the media constantly assure us that privatisation and neoliberalism are the best ways to end corruption and develop “good governance”.

But the more democratic control ordinary people have, the less corruption there is. Most people are outraged by the rich creaming off money for themselves, whether in Pakistan or over the MPs’ expenses scandal in Britain.

In many ways the Enron scandal in the US best shows how corruption fits with the whole money-grubbing logic of the capitalist system.

The collapse of the energy company in 2001 revealed the extent to which politicians took Enron’s money and passed laws to help it cheat. Banks and accountants lined up to help disguise Enron’s imaginary finances.

Loans were disguised as income and debts hidden “off the balance sheet”.

Its methods turned out to be more overtly fraudulent than the later sub-prime financial innovations that kicked off the current recession.

These scandals are just the tip of the iceberg. They are some of the sharpest examples of the corruption that operates every day under capitalism.

Corruption doesn’t come from a handful of dodgy bosses or governments. It is an integral part of capitalism and will continue until we replace it with a system that isn’t based on the exploitation of one group by another.


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Article information

News
Tue 7 Sep 2010, 17:52 BST
Issue No. 2218
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