Post No.: 0364
Systems, from governments to businesses and other organisations, become corrupt when politicians, businesspeople and other individuals can rationalise bribes, kickbacks, money laundering, etc. as being just like regular quid pro quo trades, bargains or business practices i.e. just ‘whatever it takes’ to opportunistically maximise one’s personal interests. And the sides with the most money have the most chips to bargain with i.e. the already-rich are able to be the most corrupt to make themselves even richer. This includes bargaining with peoples’ morals – not everyone but enough people in the world have ‘their price’ to put their own conflicting selfish interests above the greater interests of everyone. When a price is personally large enough to counterbalance the risk of getting caught (or more relevantly punished, for not all discovered corruption gets punished, or punished severely enough, in some countries) then it’s considered rational to accept a bribe or kickback. There’s a price where even the potential reputational costs can be overcome and the proceeds from corruption are welcomed.
If a person is wealthy then he/she can far more easily get away with crimes like money laundering. For example, if you only had $1,000, which was misappropriated, and you wanted to buy something with this money, then a seller who knows that the money was stolen might snitch on you – he/she won’t risk his/her reputation for a mere cut of $1,000. But if you had misappropriated millions of dollars and wanted to spend it, like a foreign criminal who comes to a major city and wants to buy a large property with that money, then there’s a far better chance that an estate agent will accept that money, take his/her own sizeable commission, and not snitch on you even though he/she knows that the money was stolen. With that chunky amount of commission, he/she will more likely help you to keep the money laundering a secret despite any stated professional codes of practice. (This has been happening in the London property market for years. Some real estate agents even actively facilitate the money laundering process, such as by advising their wealthy clients to use offshore companies in order to keep them anonymous!)
Fluffystealthkitten took the baton last time in Post No.: 0333 when we last looked at this topic of how the wealthy get wealthier. Most people understand that money makes things happen – money talks – and so they should understand that this includes crimes too. Enough people have their price, and having lots of money better lubricates a deal that involves leaving your morals at the door; especially if people are encouraged to always act rationally and purely self-interestedly.
Money is power, and power corrupts – therefore transitively, money corrupts. Power is used to acquire wealth, and wealth is used to acquire power – they’re two sides of the same coin in practice. Some people still believe in the excuse of ‘oh it’s just a few bad apples’ (for the umpteenth time!) but enough people don’t care about morality. All they care about are themselves, especially when there’s a lot of money personally in it for them. Some countries are more advanced than others when it comes to fighting corruption (and not use it as a disguise to simply take out political opponents) but having a lot more money relative to others, and therefore more power relative to others, generally further allows and facilitates a lot of getting away with immoral behaviours because who’s now powerful enough to punish them for it? Even though not everyone is corrupt or corruptible, there are enough such people and they will affect other people’s lives immensely. (For example, a relatively small handful of foreign criminals laundering their money in a property market can artificially raise property prices for everyone in that market, including for those who were actually born and bred in that area yet cannot buy a house to live there as adults.)
Most major corruption isn’t conducted alone yet is hidden within tight crony circles, and only now and again do we get a leak or whistleblow. Most of the time, people are paid enough to keep their mouths shut. And if they didn’t, they themselves will be implicated for taking a previous bribe or favour, hence once they’re in, they’re going to find it hard to back out, even for future corrupt deals. So corruption self-reinforces rather than self-corrects.
If money is a particular person’s number one drive, then they’re incentivised by money above all, including logically above morality. And it’d therefore clearly be in their rational self-interests to accept cheating and corruption if they think they can get away with it – which is especially the case if there’s little or toothless external oversight (such as within an environment of self-regulation, weak/under-regulation and/or weak enforcement), if one and one’s activities can be made and kept anonymous or untraceable (there are reasons why criminals wear balaclavas or in other ways want to keep their true identities hidden, and frequently use things like cryptocurrencies or offshore havens) and/or if everyone within one’s circle is in on it too (others snitching on you would then risk themselves being exposed too thus no one likely does). Corrupt systems repeatedly lobby and fight against effective external regulations because the most powerful members don’t want to change something that’s lucrative for them. They also fund the campaigns of politicians who’ll serve their interests – and again the richest have the greatest means to do so.
Morality is a fuzzy, malleable thing depending on one’s desires, situation or rationalisations. Laws against money laundering, etc. are useless if they’re not properly enforced or if the enforcement system is corrupt itself. Whatever the case, money is the universal means to make things happen in the modern world – it gives us the power and freedom to do things, and enough people want this power and freedom over others. Money gives us leverage over others, just as money leverages us. Hence if it’s all about the money then that’s when problems come.
Thus corruption is in the system. It’s systemic – where there’s lots of money, there’s potentially lots of crime. Organised crimes of one sort usually link with and fund other crimes too – there are big operations for the most serious crimes. It shouldn’t be surprising that, wherever there’s an enormous concentration of wealth, crime and corruption will rear its ugly head. It’s motivated because of the sheer amount of money at stake. It’s motivated because of single-minded goals of profit maximisation, greed and personal selfishness. Thus if money is your primary motive, and you’re rationally self-interested, and you’re offered lots of money with little chance of getting caught and punished (or there’s only a small penalty even if you do get caught and punished) then you’d rationally behave corruptly too. This is how self-regulation works, or fails to.
We may assume that people in powerful circles are rich enough so why do they need to use shady ways like embezzlement and money laundering to get even richer? Of course it’s hardly just the rich who attempt fraud and not every rich person is tempted either, but they have the most means to use shady ways (e.g. to grease other people’s palms with money), they’re usually in positions that give them control of large flows of cash or deals (e.g. they’re in top executive positions), plus greed has no bounds, so we cannot expect such wealthy and powerful individuals to self-regulate. And if you’re someone who believes that ‘if everyone were rich enough too, everyone would avoid and/or evade their taxes too’ then you’d understand that the opportunity, situation, culture or system is more predictive of a person’s behaviour than a person’s own personality.
It’s true that heavy centralised regulation moves the power too much into the hands of governments, who’ll then be corrupt, but it’s also true that not intervening leaves the power too much in the hands of massive multinational corporations or other organisations, who’ll play corruptly or harmfully too. It’s however a false dichotomy to think that it must be one way or the other – it’s about seeking that right balance of power where no side is too unequally powerful or powerless to keep the other in check.
Inequality has a bi-directional relationship with corruption. And that’s another reason to fight for more equality at all levels.