Sustainable corruption

Let’s face it, there is pretty much only one problem in politics.


Now, I am not so naive as to consider it a completely solvable problem. But there are extremely harmful types, and there are relatively (relatively!) benign ones.

The difference is both one of quantity and of quality.

On the qualitative side, the difference between civilized, prosperous, well-governed countries and the one I live in was explained to me by a Swiss man who is Well Positioned To Know From Personal Experience: “Look, we have corruption here too. But the extra margin on public projects is like 3-5%, not 30-50%.”

(Note the actual figure in some cases, notably infrastructure and government IT systems, is hundreds or thousands of percent.)

The problem of quantitative immoderation is especially pronounced in young and fragile democracies without established “elites”, where there is a mad competitive scramble to establish the future ruling dynasties / organized circles.

That phase is defined by a lot of scandals and jailings and murders that peter out over the next years – not because there’s less stealing going on, but because the war is over and there is now a dominant group/structure/equilibrium, in whose interest it is to keep the public largely unaware of what is going on behind the curtains of power.

Basically, the mentalities of volatile versus established kleptocracies are:



“OK, we’ve been well-positioned for five generations now, our game is to stay well-positioned for the foreseeable future as well and avoid a peasants’ revolt with pitchforks and actual change. Easy and inconspicuous does it.”

Kremlin vs. Rothschilds.

With continuity and stability, you get parasites with long term perspective that don’t kill the host. Think Queen Elizabeth vs. Dilma Rousseff.

The host meanwhile has the means, motive and opportunity to force the parasites into a symbiotic relationship (what happened to surviving European monarchies over recent centuries), or develop effective antibodies.

On the qualitative side, there is a process of sublimation of formerly overt criminal activities into a semblance of respectability.

For example, protection rackets evolve from “Give us money or your pub burns down”, through “You need to buy this security system” “I don’t” “You really do”, to “Are you GMP compliant? We’ll certify you and you needn’t worry about state inspections …. for a fee”. Eastern Europe in particular has gone through all shades in less than three decades.

So we kinda understand what’s going on in a way the westerners who grew up with the system might not.

Likewise, big bundles of banknotes in plastic bags evolve into a system of revolving doors between politics and the big business benefiting from protectionism, barriers to entry and regulation. That is de facto a state capitalism / corporatism / Chinese socialism.

But that can hardly be thought of as a market economy anymore.

This is the point where corruption becomes official and legal, enshrined in the fabric of the economy. It comes with a lot of lofty official-sounding phrases and millions of non-contributing jobs. The price is a general decline in economic dynamism.

EU institutions are in many ways the pinnacle of that model, but no amount of lipstick disguises the pig.

The economy is corrupt, even though the thugs traded naked lady tattoos for horn-rimmed spectacles and grey suits.

One walk through the European Parliament bulding, or any national parliament, proves they haven’t given up the prostitutes and cocaine though – and their closest associates will often be hiding naked lady tattoos under hair and suits anyway.

While corruption is probably insoluble, it can happen in relatively harmless ways where thugs pay their dues to society and provide non-trivial protective and stabilising services in return.

The sustainable model is both qualitatively refined and quantitatively modest.

Quality, or subtlety, is important, because it makes people notice corruption less or even accept is as normal.

And quantity is important to make the whole arrangement fiscally stable.

Public finances everywhere are precarious precisely because of excessive corruption levels.

(I agree with you in principle that even one dollar of stolen money is “excessive”, but we’re working on the pragmatic level here.)

According to Transparency International, the budget deficit in my country is more or less equal to the estimated volume of corruption. I would be surprised if this was an unique situation.

That means that the budget issues gripping the whole world are mostly a question of corruption, not economic performance or tax policy (you can bet higher taxes would just mean more gets stolen with similar deficits and public services).

With corruption limited to responsible levels, there’s enough money for everything at moderate to low tax rates.

Again, I refer you to Switzerland which has balanced, surplus or only modestly deficit budgets. It also has excellent infrastructure, world-class public services including education and healthcare, negligible unemployment, and super low taxes.

(“But Switzerland is rich” – yes, precisely because negligibly taxed and responsibly governed. The causation goes the other way than the objector there might at first think.)

The present tension between “tax the rich” and “keep the plebes away from our pockets” is fake and the wrong thing to worry about. If tens of percent of public budgets weren’t stolen, there’d be enough money for everything at reasonable taxation levels and zero public debt.

The continuing presence of the 1800s era “social question” in politics is a divide-and-conquer tactic by our common enemies.

A frequent tool of entrenching corruption is making ordinary citizens complicit: “Look you’re getting a green energy subsidy on your house and your kid just went to a publicly funded student conference, you’re in this with us”. This is colloquially known as socialism.

It doesn’t have to be said at all, or even implied, because the moment a citizen is made a beneficiary of an unjust arrangement, he will immediately start rationalising it as being just. He will then be much more inclined to rationalise orders of magnitude more money changing hands on similar pretences further up the food chain. It’s just loyalty buying.

But such inclusionist corruption schemes eventually run out of victims resources tax payers.

By the way, note that corruption indices measure corruption perception, not corruption. That means some extremely inclusively-corrupt countries such as Austria can get high grades despite being on par with Sudan. But only in degree, not in quality. It is much more refined.

There’s a special case of corruption where it serves as a correcting mechanism. Hear me out:

Corruption is how you get market wages when a finance minister has an official salary lower than the CFO of a medium-sized company. With incomparably more responsibility and stress. Nobody halfway qualified and sane would choose public service under those circumstances.

The public wouldn’t tolerate public sector salaries more than a few multiples of the average wage. So there’s a token official salary, plus an unofficial component that brings total renumeration to market wages reflecting the responsibility of the job.

“The wolf is fed and the goat is whole”, as we say.

This is by no means an apology of corruption. I would dunk all those fuckers to the bottom of a lake in a vat of nitric acid given half a chance. But realistically, some degree of corruption is inevitable in human affairs.

Better have the Swiss type than the Russian.

Sadly, corruption will exist as long as there are people deciding about wealth that isn’t theirs. That means as long as there are politicians and managers.

But it can occur on a limited enough scale that it doesn’t substantially interfere with the workings of society and threaten its existence. It can create a hidden caste of benign parasites with a stake in the welfare of the society that supports them. A stealth-aristocratic model, if you will. Not ideal, but perhaps optimal given present circumstances. A stable solution pending an upgrade to e-government.

Buy my loyalty.