Monday, April 6, 2009

Growth of corruption equals decline in freedom

Forbes in its article "The Most Corrupt Countries" says

Corruption is on the march. In 2008, the number of countries sinking deeper into the clutches of influence peddling, bribery and scandalous business dealings outpaced improvements by a 2 to 1 margin. Countries falling by more than 10 spots outnumbered risers 8.5 to 1....
Nations with the highest risk of corruption are often the desperately poor, where foreign aid and assistance can easily be transferred through back channels of oppressive regimes. As a result, the impact of corruption can extend well beyond any economic detraction to affect the quality of life for millions of citizens.

It is clear from the article that the growth of corruption is directly related to decline in freedom. One can clearly see that the discretionary powers given to government officials which violate the basic tenets of Capitalism have increasingly resulted in the chaotic economic mess the world finds itself in.The blaming of the mess on the free markets is laughable since even in America in the last hundred years the markets have been heavily regulated and burdened with unsound polices.

The obvious solution for this problem of corruption as George Reisman in his epic work "Capitalism- A Treatise on Economics" said:
"The solution is, of course, the restoration of the businessman's freedom and his security from the destructive actions of the government officials. When the businessman can once again act for his profit by right rather than permission, when the government has lost the power both to harm him and to harm others for his benefit, the problem of such bribery and corruption will shrivel to insignificance."

2 comments:

Luke Baggins said...

One example of corruption I heard of some years ago was in India, maybe you know more about it. There was some international convention banning a particular cooling chemical and requiring a more expensive one for air conditioning and/or refrigeration. Indians were bribing officials to get around this law.

This kind of corruption is a kind I would like to see more of. Wouldn't you? Of course I would rather see these kind of laws repudiated in principle, but my point is that the corruption of an oppressive system is a good thing and an indicator that the system has failed to snuff out all life. I think an increase in corruption measured in dollars collected in bribes, or number of officials on the take could be either good or bad, depending on what else is going on.

Rajesh said...

I know about the law you are talking about. We have a lot of these laws like the cars have to adhere to the European standards of pollution (Euro III etc.) which is ridiculous. One of the most common sights on Indian roads is of families of four and five (mom,dad and kids) on top of a puny scooter braving the unruly (to put it mildly) traffic. Many people are killed on these regularly. Why? Because cars even the smallest ones are made prohibitively expensive due to these stupid regulations to save the environment besides the hefty 50% tax (more on luxury cars). Unfortunately bribing is not possible in cases like these so the system literally snuffs out life.

Do read my post "Living under Socialism" to get an idea of the everyday corruption here. Ultimately the corruption is like cancer and if not checked it renders the country (like in soviet Russia) hopelessly sick. When you are just struggling to survive it reduces human beings to the fate of their ancestors living in caves where just surviving was an achievement. That's why when I see America moving in this same direction it bothers me tremendously. At least in the past people trying to escape the tyrannical regimes had a place to run to, where will the future generations go?