The Underside of Globalization

Article excerpt

Corruption is an old story, one way or another as old as society. Periodically there have been explosions of anger from long-suffering, docile victims seeking to wipe it out. It has been a causal element in most revolutions, sometimes the dominant one. The disgust it provoked was a central urge in the Protestant Reformation. And it is still with us, all around the world, in the poorest and the richest countries.

But there are new aspects, as well as ancient habits, which make corruption in these days both easier to spread and more intolerable. One is easy movement of people, goods and money. Economic globalization has created tremendous new opportunities for illicit as well as productive creation of wealth. Another is the sheer volume of money that modern trade and construction make available. In traditional subsistence societies, oil can bring a sudden flood of riches easy for a few to tap with no compulsion to distribute reasonably. When there is large-scale building, government favours can be worth billions to be siphoned off in quantities never before imaginable.

And, on the other side, modern business requires assurances, a framework of law to give confidence in vast, long-term investment which arbitrary corruption undermines. Democracy by definition requires accountability, a rule of law based on an agreed sense of who is entitled to what. It may co-exist with corruption, but it is hard to reconcile and sooner or later there is a collision. Somebody blows the whistle and scandal erupts.

Part of the trouble is that corruption isn't easy to define. You may know it when you see it, but it is hard to spell out. In some ways, democracy promotes it by limiting the power of authority. Elections cost money. At what point does the equation of money and votes become criminal?

The Mafia in Sicily evolved as people banded together to resist cruel and rapacious overlords, and then extorted money for "protection" against its own ability to be cruel and greedy as well. Mussolini nearly wiped it out with his fascist police, because he didn't depend on elections and therefore didn't need the gangs to deliver the votes. The U.S. was to some extent responsible for reviving the network as an unintended result of World War II operations. Mafia member "Lucky" Luciano, then in an American jail, was recruited to go to Sicily before the Allied invasion clandestinely to prepare the way by encouraging his old friends among the islanders not to resist.

Then, as occupying forces moved in to set up civil government, they wanted to be sure not to reinstate the local fascists. They opened the jails and gave responsibilities to those whom Mussolini had imprisoned. But these weren't all anti-fascists. Some were just Mafiosi. They busied themselves delivering votes when the time came, to establish a new base, as well as exploiting the black market which always develops when there are shortages and too many controls without overwhelming official terror.

A vicious circle

Corruption tends to be a private enterprise, even within government structures, because official institutions can justify what they take on other grounds, valid or false. But of course, it is a mistake to think of corruption as the inevitable enemy of government. The worst cases always come from collusion that feeds on itself. The more money the corrupt can extract from smuggling, black marketing, intimidation, the more they can buy off police, judges and other officials to help promote their affairs. There is a chicken-and-egg interdependence. The more government imposes petty restrictions, red tape, arbitrary rules, the greater the temptation to grease the way through it and when, as is usually the case, officials are poorly paid, the greater their susceptibility.

There are countries where this is a way of life, almost inescapable. But the complexity of modern economics adds a whole new dimension, piling layer on layer of illicit obligation. …