I was discussing Indian corruption with Sean-Paul the other day, and we had to really break down what we meant by corruption. That lead to a simple classification system, so I’m sharing it with it.
Everyday vs. Elite Corruption
Do you bribe the policeman or the minor bureaucrat to get a permit. Do you grease everyone with even a tiny bit of to get what you want, and it is it expected? Is it essentially required, in the sense that if you don’t consequences are nasty: arrest or or dential, Or at best, whatever you needed done taking forever and being shoddily done.
This is everyday corruption. India is rife with it. America, mostly, doesn’t have it. Russia used to have it, but I’m told by Sean-Paul, that at least in Moscow, it’s now gone.
Elite corruption is when the elites are self-greasing. Whenever anything is done, it is done in a way where somebody rich can take a cut. Contracting to build new infrastructure is where the contracts are inflated is the standard, but there are tons of variations. Most Western nations have this. The US or the UK is probably the worst among major countries. But it exists in Russia and (though much less than before) in China.
Honest vs. Dishonest Corruption
In honest corruption you get what you pay for. In everyday corruption your visa gets stamped, your parking ticket disappears, you get the permit you needed, or city workers show up and connect your new place to power, water and sewage. At the elite level, if if a bridge, or hospital or park or space program was promised, it is delivered on time and on budget. It’s just that the budget includes 10% grease. Some other games may be played. If you know where new facilities will be built you could, say, buy up property that will soon increase in price, then sell once it does.
But bottom line, what is delivered at the end is delivered on time or with minor delays and it works. It’s not shoddy. China during most of the Deng period had a lot of honest elite corruption. Everyone was taking a cut. But they bloody well had to deliver and if they didn’t, they lost their place at the elite table and might even end up in prison or executed. American in the late 19th and early 290th century mostly had honest corruption. Tammany Hall was corrupt, but they also kept their promises. The great railroads and bridges and parks got built, and were generally built well and on time.
Dishonest Corruption Is when you whoever is corrupt doesn’t have to deliver. You pay off the cop and he throws you in jail anyway. You bribe the bureaucrat and he still drags his feet getting you approval, if you get it at all. The first payment is never the last payment, the idea is to drain you of as much as possible.
At the elite level dishonest corruption is that the street or building was promised and funded but somehow either never gets finished or takes twice as long and three times as much and then, once done, it usually turns out to be shoddily built. A new program for veterans/homeless/cancer/whatever is promised, but somehow it’s slow and ineffective and doesn’t do much, but a few people make a lot of money off of it. Promises mean nothing, nothing is delivered on time and what little is delivered is of crap quality. Meanwhile insider trading is everywhere, taxes always go down on the rich and up on the poor and middle class and programs which used to work are slowly degraded into uselessness so that someone can make more money.
This is the US or the UK and Canada and indeed all neoliberal countries. It’s actually more or less the definition of neoliberalism. Effectiveness is nothing and efficiency is really only about how efficient something is at funneling money to the rich. It is also India, which is why India is, despite some progress, still screwed. It’s run by criminals from top to bottom. Ironically, in my experience (which is out of date, I’m happy to be corrected) low level Indian corruption is “honest’ in that you get what you pay for. High level Indian corruption is dishonest as hell. No big project ever works properly, comes in on time and is effective. (This is why I’m still negative on India.)
There’s also a middle corruption, slice for everyone. This is where everyone involved in the project gets some. So the workers get some, the managers get some, and the contractors gets some. Everyone is being greased. This doesn’t mean just having a job, it means being paid better and treated better than at a non corrupt job.
The honest and dishonest versions are as normal. Honest “slice for everyone” corruption still delivers what was promised at reasonable quality. Dishonest “slice fore everyone” doesn’t deliver or delivers absolute crap.
Obviously no corruption is best, but equally obviously honest corruption is better. If you have to have any corruption, then honest elite corruption or honest slice for everyone corruption is best. Low level corruption is always bad, since it means “if you don’t have money, you’re never treated fairly and you can’t break out of the bottom” but if you must have it honest is better than dishonest.
Growing up a lot in what was then called the third world, then observing politics for years all of this has been well known by me, but I never really broke it down properly, it was pretty much “implicit knowledge” as much that we learn young is.
For your reading displeasure.
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Feral Finster
When I lived in Ukraine, the definition of an honest judge was that he returned the losing side’s bribe.
ibaien
i used to work for a very savvy and very old world Turk in cambridge MA who had been there long enough to see the bureaucratic ecosystem collapse. the old school were charming, readily greased townies who you could have a beer with, chat about sports, slip them a little money for a permit, it was all just folks and built on relationships. in the 21st century as greater boston became a biotech and douchebag capital, all the old bureaucrats were replaced by the worst, most officious, total loser grey men. everything by the book, no interest in being part of a community. “just following orders”. this, of course, while harvard and PRC offshore money gobbled up every single bit of available real estate.
he sold out and retired – wasn’t fun anymore. i don’t blame the guy.
GM
@Feral Finster — did you ever ask people in Ukraine when the place was more corrupt? Before 1991 or after, or if we want to break it more finely, to rank the various decades prior to 1991 and after.
Stalinism had the peculiar property of being simultaneously practically lawless and yet probably the least corrupt system that ever existed.
bruce wilder
Interesting taxonomy — especially, the distinction between elite and common man corruption.
My father was a policeman and a whistleblower circa 1940. He was only a trooper (lowest rank, like a private) and the investigation that followed on his evidence (given in secret to a state circuit court judge empowered to use a grand jury), everyone in his chain-of-command except the founding chief of all went to prison. The crusading reform governor died in a plane crash; maybe a coincidence 😳.
My father had two mottos, which I think followed from his experience: “You cannot cheat an honest man.” and “The fish rots from the head.”
It ruined his career. He was only promoted once in 35 years and had a hard time getting assignments to posts, because prospective supervisors were afraid of him.
I do think ordinary people in hierarchies often feel more secure in a culture of corruption for a variety of reasons, including cynicism about the integrity of leaders or managers with a political agenda and the personal insecurity of mediocrity and boredom. Needing the money is an additional incentive.
Purple Library Guy
Seems like a solid schema.
bruce wilder
I have to quibble a bit on whether gilded age elites practiced “honest corruption”.
I think there was a mighty struggle underway. That struggle gave rise to the Progressive Movement, which is credited to liberalism in memory but which was conservative in its own time. It was what the muckrakers were all about. Brandeis. Teddy Roosevelt. Terrible accidents punctuated the period and motivated sweeping reforms and great achievements like Grand Central Terminal. At best, I think you can say there was a division of opinion among elites, between the “noble achievers” and the “robber barons”.
Daniil Adamov
Elite corruption is hard to evaluate from an ordinary citizen’s standpoint. Possible, I suppose, but one would need to make a real study of it. I think everyone I know in Russia would laugh at the assertion that America is more corrupt on the elite level than we are, even though some instances of American corruption are pretty glaring. We certainly have no shortage of or apparent decrease in corruption scandals (that is, excessively audacious corruptioneers getting caught – and how many don’t get caught or are allowed to persist?).
But if Russia’s elite was as corrupt, or as dysfunctionally corrupt, as most Russians believe it to be, I think the country would’ve collapsed by now. War is the ultimate test of state capacity and we have survived it, at least. Clearly some things do get done as promised and not all the money gets stolen on the way, which is quite shocking to think about.
As far as I can tell, corruption really has retreated substantially on the everyday level. Certainly I have never had to give a bribe, even on occasions when some older relatives thought it would be necessary, though I also haven’t led the sort of enterprising life where bribery may be a more regular occurance.
It is curious that Sean-Paul singles out Moscow, by the way. IIRC it long had an elevated perception of corruption, as did St. Petersburg and the south of European Russia. Elsewhere people have been reporting a decrease in corruption for a while now, though by some accounts it may also linger more in small towns. Muscovites, however, are infamous for thinking they have everyone beat in everything, including corruption, so they may have been exaggerating. That said, Sobyanin probably did succeed in cleaning up the capital. The decrease in corruption is often considered a success story of digital government, if everything is done through computers there are fewer occasions for a surreptitious bribe. I understand Sobyanin is quite big on that as the archetypical technocrat.
GM
That is because people have no idea how fantastically corrupt the US is. Sometimes the best place to hide things is out in the open, in plain sight, and that is precisely the case with elite corruption in the US. Everything is for sale and it is all legal and even regulated somewhat (which does not mean those regulations are followed). In Russia it happens under the table and away from unhealthy public curiosity, in the US there is a lot of that too, but you also have tens of thousands of lobbyists in DC, completely out in the open, dictating all legislation, and you also have elections quite officially and legally being up for sale on all levels.
But it is precisely because most of it is legal and out in the open that the perception of corruption is blunted — because nobody gets busted for it. In Russia you have that perception because they are at least somewhat fighting corruption and you constantly hear about such and such official being caught with his hands in the cookie jar.
Also, the low-level corruption helps shape perceptions about the upper levels too. The average person on the street has no idea what shady dealings are going on at the elite levels in either country, but they do deal with low-level administration and cops all the time. And in the US those are indeed practically corruption-free. While in Russia there is still a fair bit of that, even though things have improved a lot as you too noted.
Another issue is that perception on these matters also tends to lag reality a bit. So while things are improving in Russia, perception has not caught up yet, while they are going in an absolutely catastrophic direction in the US, but it still has an undeserved reputation of a place ruled by laws dating from some very distant at this point past.
So the perception is that there is a lot of corruption in one place and very little in the other, when the reality is that there is a lot of corruption in Russia and absolutely monstrous, extremely consequential, to the point where we can no longer speak of a functional state beyond the lowest levels of administration, corruption in the US.
Eclair
” Effectiveness is nothing and efficiency is really only about how efficient something is at funneling money to the rich.” That is the best definition of ‘Neo-liberalism’ that I have yet seen.
And, after reading the previous discussion of corruption, I was thinking of the different levels: in the US, we have not yet reached the stage of ‘everyday’ bribery. I did not have to slip the town assessor a few bucks so she would reduce the new assessment on my house to a more reasonable level. But what are lobbyists and mega-million dollar campaign contributions but bribes on a higher level?
Mark Level
This was well-suited to my “reading displeasure” as promised, but its brevity maybe omitted a big factor in American (& Neoliberal generally) corruption: Status corruption.
Status corruption became possibly more open, and certainly more consistent with the rise of Neoliberal Orthodoxy on the individual level. The true Elites, TPTB can openly flaunt laws and get away with it over and over. E.g., the Walmart heiress Alice Walton drives drunk constantly, killed someone doing so.
https://www.reddit.com/r/walmart/comments/984h1g/dont_forget_alice_walton_killed_someone/
A coupla nights in the drunk tank and some small fines paid, but the continues unchecked. GW Bush the Lesser goes AWOL while in the Air Force (except for a gov’t. paid dental appointment, the Bushes could not be bothered paying for such events) and nobody asks why. Countless cases of this.
Of course the systemic, corporate and governmental impunity count is much higher. Finance guys create a mortgage bubble, steal million$ and when the dump follows the pump, the new “Liberal” President, Obama, bails them all out and kicks the victims out onto the street. The Bush Jr. reign of torture and killings of “detainees” (mostly without the niceties of a trial) kills over 100, the torturers get promoted, the whistleblowers go to jail. Julian Assange tortured for years in a British hellhole, fhalse claims of a sexual assault (fingerbanging) provide the means to detain and hold him without trial. He did at least escape with his life, no mean achievement. Massive SLAPP lawsuits for elderly black activists in Uniontown, Alabama, who protested their town being a dumping ground for toxic coal ash from an all-white town in another state, people suffer respiratory and other illnesses but the only “crime” is complaining about and trying to stop it. (Harper’s covered this in a lengthy piece in early 2018.)
A slightly different iteration of this is seen in NGOs and supposed “philanthropic”, tax-free groups. After Hurricane Katrina there was a huge expose of the Red Cross. Great at fund-raising, not so great at relief on the ground, I think something like 88% of their revenues went to Admin and staffing, high 6 figure salaries for the top CEOs, not so much for disaster victims. Not an NGO, FEMA worked best in wealthy NOLA neighborhoods and ignored the poor ones. The local Elites used the disaster to destroy the public school system in New Orleans and put in elite, authoritarian Charter Schools, especially Military ones. The young New Orleanians, mainly black, could learn military discipline and obedience to be future cannon fodder. The ones whose families weren’t expelled from the City to far distant places never to return. Blacks were driven out, their labor taken over by Hondurans and other Latino groups who could be paid less. (To be fair, as I lived in NOLA for 8 years in the 80s, there was a large Honduran community already there. I had a Honduran girlfriend at one point, and landlords as well.) I will return to New Orleans, but back to NGOs. These are generally corrupt and have opaque “missions” which may or may not be sidelined for other agendas. Sometimes politics enters the equation in an openly corrupt way. A great example was the nice, Libby Susan J. Komen foundation, “preventing breast cancer” with cute pink ribbons (so girly), same funding imbalance seen as with the Red Cross, one day they somehow decided supporting Planned Parenthood was icky and verboten. https://www.npr.org/2012/02/01/146243896/q-a-the-rift-between-komen-planned-parenthood
Not an NPR fan, but decent reporting here. Yes, it’s always important that “respectable” groups like Susan J. Komen kowtow to the Southern Baptist Convention, fetus fanatics are so much more clean and moral than those who respect women’s “rights” to bodily autonomy, “babies” are more important than women after all (at least until they’re born, though white babies do get some respect.)
Back to New Orleans post-Katrina and the story of an older mentor of mine who was a greatly respected public school teacher, Martin. Martin’s job got wiped away probably even before the flood waters receded and at first he did well, going to work for a respected community org, NOCCA, a greatly respected Creative and Arts High School with people like Wynton Marsalis and other luminaries coming in as guest-instructors. https://nocca.com/
This lasted some years, but no more than 6 or 7. In the meantime, when Katrina hit, he’d been living in a ground floor apt. (there are no basements in NOLA) and his old records got flooded and ruined. The feds one day sent him a letter falsely claiming he’d paid no federal taxes between like 1998-2002. Well, he had but the records were gone, so he got ripped off of thousands of dollars.
The very last time I visited as a tourist, he was in his early 60s and barely scraping by, driving an Uber gig. He had one brother who’d formerly had a decent writing gig for the free local Weekly, Gambit, and between the 2 of them they also had to support their elderly mom, in her mid-80s, and a developmentally disabled brother who’d been in a local institution since infancy. Like most Americans, there was no “dream” for them by the end, just a nightmare of near-poverty and wolf at the door.
JFK, certainly no starry-eyed radical, but evidently enough of a threat to TPTB that the Dulles brothers, the Mob, Israel and other real players had him eliminated, once noted that “Those who make peaceful revolution impossible make violent revolution inevitable.” (I’d always heard the first clause as “peaceful reform” but the internet corrected me.) Well, with the R’s and MAGA Cult making violent Counter-revolution inevitable, and the Dimmie Saps pushing utter BS and no reform, the only “revolution” will be on the Right. The corruption will be more open, it will all break down.
Thank you Obama. Your true legacy was 2 terms of Insane Trumpism but at least you kept that Dirty Hippie Bernie Sanders (who frankly probably wouldn’t have done much, beyond gesturing) out of power and here we are in late Weimar Republic territory. The donors are happy though, the Tech Bros. and Finance folks and Zionists are fully in the driver’s seat so “Mission Accomplished” I guess.
Feral Finster
@GM: good question.
AFAICT, the question in the Soviet Union was “What laws are supposed to be obeyed?” Pretty much everybody had to participate in the black and gray markets, for instance, but giving a teacher a payment in exchange for a grade would have been unthinkable.
@Daniil Adamov: When I lived in Ukraine, I often told Ukrainians that the West was at least as corrupt as Ukraine, and I have paid off everyone in Ukraine from the local fire department on up to members of the Cabinet of Ministers, while I never have so much as given an American cop a free donut.
The difference is that, in America, corruption is channeled into legalized activities and therefore is largely the preserve of those Americans who can afford pricey lawyers.
The following essays are most instructive, and there is no a dull word in either of them:
https://indi.ca/nytimes-the-word-youre-looking-for-is-corruption/
https://indi.ca/how-the-us-legalized-corruption/
marku52
Possibly the most amazing “right out in the open corruption” in the US is total control of its military and foreign policy assets through black mail and bribery by a foreign entity (I won’t deign to call Zionism a country)
cc
Appreciated the read. High schools, colleges, and universities should have Corruption 101 classes and this kind of breakdown should be part of the curriculum. Don’t know whether that exists in other countries, but I never encountered that in my education here in Canada.
cc
“The great railroads and bridges and parks got built, and were generally built well and on time.”
A lot of those great American railroads, bridges, parks, Ivy League schools, etc. were built on money taken from China.
WWII US president Franklin D. Roosevelt’s grandfather Warren Delano had made the family’s fortune from the forced opium trade in China. The D. in Frankin D. Roosevelt stand for Delano.
Former US Secretary of State John F. Kerry’s great-grandfather and grandfather also made that family’s fortune from the forced opium trade in China. His full name is John Forbes Kerry, and Forbes was the name of his great-grandfather and grandfather who had become so wealthy off China.
They and others invested their heists from China into railroads, bridges, parks, schools, hospitals in the US.
So Harvard, Yale, Princeton – many of these prestigous US institutions were built out of fortunes made off of this forced opium trade in China.
The seed money for all these great projects was born out of great corruption. Was there less corruption in the processes in the US, or was there simply so much “free” money coming in that grandiose things still got done?
It wasn’t just Britain that built an empire on the back of China, India, Eurasia – a lot of the US was also built on money taken from China. So those that want the Anglo-led West to be “smart” but ruthless in keeping Eurasia forever divided and weak so that the hegemonic West can maintain its (“its”) wealth, power, and standard of living are following in a long tradition …
cc
A representative excerpt from “The China Mirage: The Hidden History of American Disaster in Asia” by James Bradley (highly recommended, BTW), page 39:
“Opium merchants like Delano provided the seed corn for the economic revolution in America. Delano invested his new fortune in a host of ventures: New York waterfront property, railroads, copper mines in Tennessee and Maryland, and coal mines in Pennsylvania, where a town was named Delano in his honor. The Perkins family, who had pioneered the transport of Turkish opium to China, built Boston’s Athenaeum, the Massachusetts General Hospital, and the Perkins Institution for the Blind. America’s first railroad—the Quincy Granite Railway— was built to carry stone from Perkins’s quarries to the site of the Bunker Hill Monument.
Opium money funded any number of significant institutions in the eastern United States. John Perkins Cushing’s profitable relationship with Howqua helped finance the construction of America’s first great textile manufacturing city, Lowell, Massachusetts. America’s great East Coast universities owe a great deal to opium profits. Much of the land upon which Yale University stands was provided by Russell family money.
A Russell family trust still covers the budget of Yale’s Skull and Bones Society, and Russell funds built the famously secretive club’s headquarters. Columbia University’s most recognizable building is the Low Memorial Library, honoring Abiel Abbot Low, who worked in China with Warren Delano in the 1830s. John Cleve Green was Delano’s immediate predecessor as a senior partner in Russell and Company, and he was Princeton University’s single largest donor, financing three buildings. (Green also founded America’s oldest orthopedic hospital— Manhattan’s Hospital for Special Surgery—from his opium fortune.)
Among the railways financed with opium money were the Boston and Lowell (Perkins), the Michigan Central (Forbes), the Chicago, Burlington, and Quincy (Forbes), and the Chesapeake and Ohio (Low), among others. The influence of these opium fortunes seeped into virtually every aspect of American life. That influence was cultural: the transcendentalist Ralph Waldo Emerson married John Murray Forbes’s daughter, and his father-in- law’s fortune helped provide Emerson with the cushion to become a professional thinker. It was found in technology: Forbes’s son watched over his father’s investment in the Bell Telephone Company as its first president, and Abiel Abbot Low provided start-up money for the first transatlantic cable. And it was ideological: Joseph Coolidge’s heirs founded the Council on Foreign Relations. Several companies that would play major roles in American history were also the product of drug profits, among them the United Fruit Company, started by the Coolidge family. Scratch the history of an institution or a person with the name Forbes attached to it, and there’s a good chance you’ll see that opium is involved. Secretary of State John Forbes Kerry’s great-grandfather was Francis Blackwell Forbes, who got rich selling opium in China.”
bruce wilder
In comments, I sometimes channel a fundamental critique of neoclassical economics, which, as a standard part of college education and a rhetorical frame for economic policy journalism, undergirds neoliberalism. I regret not addressing crime.
One of the (deliberate?) blind spots of neoclassical economics is crime as economic activity. For most economists, crime doesn’t even rise to the level of a type of “market failure” — the usual category “justifying” state intervention in “private” affairs. There are quite a few economists who would be inclined to regard circumvention of laws prohibiting usury, fraud, insider trading, debt peonage as private remedies for state failure. A Michael Milken is a hero of efficient markets to these moral cretins. That kind of perverse thinking pervades American politics in the neoliberal era. It usually isn’t so blatant as to provide juicy soundbites, in large part because the political rhetoric is heavily coded to obscure the amoralism of promoting economic predation and the usual pundits are trained to look away.
different clue
Here is an example of decision-maker corruption at work, in this case using the power of government to destroy a whole sector-load of private actors in order to help a few very powerful insider-wired private actors aquire and monetize the wreckage of all the other destroyed private actors. It is something I had been reading about off-and-on for a while and here is a video-webcast which really lays it out, titled: ” White Farmers Were Cut Off From Government Assistance On Purpose To Lose Their Farms.”
Here is the link.
https://www.youtube.com/watch?v=xoYRxVSveag
Mario
It’s a good start Ian, as many commenters noted above it needs a third dimension: to what extent has the corrupt activity been legalized.