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Corruption and capitalism

Corruption is an evil which has to be overcome. Its roots lie not in individual guilt or some as yet undefined 'human nature' but in the very nature of the capitalist economic system: it is based on the theft by the capitalists of the surplus value created by the workers.

Corruption’ has become one of the key problems facing the people of South Africa and the world, even more so as the National Union of Metalworkers of South Africa (Numsa) mobilises for the general strike on 14 October when they will march with other unions and the Unite Against Corruption Campaign in the rolling programme of mass action.

Corruption is an evil which has to be overcome. People are sick of reading almost daily of money that was supposed to create jobs and improve the lives of South Africans, especially the poorest, being diverted into the bank accounts of greedy individuals and corrupt companies.

It is rightly perceived as a brake on economic growth and job creation and one of the main reasons for the non-delivery of services like schools, hospitals, water and roads to poor communities

But what exactly is ‘corruption’? Wikipedia admits: “There is no globally accepted definition of corruption.”

The word is used to define a very broad range of crimes – bribery, fraud, embezzlement, money laundering, price-fixing, tax evasion, racketeering, illicit capital flows, cyber crime and maladministration of funds.

It spreads from giving a ‘cool drink’ to a traffic cop to dodge prosecution for speeding up to Hitachi’s bribe to secure a R38,5-billion tender to build boilers for Eskom’s new power stations, plus the crimes the corrupt commit against whistleblowers, from intimidation and blackmail to murder.

It is further confused by the euphemisms used to disguise corruption. “Bribes are called rebates. Free holidays are called international conferences, or overseas plant tours. When they overcharge you, they make super profits in a bull market. When they fire you for bigger executive bonuses, they call it rightsizing or downsizing, and so we can go on.

The campaign against corruption is unusual in that it is aimed at something that nobody tries to defend. The only attempt I have seen is a strange article on the News24 website by Rennie Naidoo: ‘In praise of corruption’ – the source of the above euphemisms – but it turns out to be just a cynical, and presumable ‘tongue-in-cheek’, view that everybody is corrupt, including church leaders and trade union officials and shop stewards, so why make a fuss when all of us have our mouths in the trough.

It is a version of the old, false argument that problems such as corruption and criminality are simply the result of our defective ‘human nature’, so there is no point in trying to prevent it.

Sadly he then gets side-tracked into a meaningless and irrelevant attempt to distinguish between ‘white corruption’ and ‘black corruption’, falsely implying that the anti-corruption campaign is aimed at particular racial or political targets. He ignores the fact that this is a global phenomenon which transcends racial or national boundaries.

Occasionally political scientists make the case that corruption can ‘grease the wheels of business’ and that corruption is one of the main reasons Asia has been more competitive than the rest of the world.

Fortunately, aside from Peter Bruce (publisher of Business Day) who regularly defended the construction industry cartels, we have few pro-capitalist ideologues in South Africa who are blatantly in favour of corruption, in public. What they say behind closed doors to each other, as they introduce politicians and government officials to the high life, is another matter entirely.

Why, when there is so much evidence of serious corruption of all the varieties listed above, are all the laws and institutions which are supposed to prevent it hardly ever successful? Why are so few people ever convicted and punished?

If indeed acts of corruption were simply the result of individual weakness arising from people’s ‘human nature’ then we would surely see far more convictions.

So what then is the real basis of corruption? Its roots lie not in individual guilt or some as yet undefined ‘human nature’ but in the very nature of the capitalist economic system: it is based on the theft by the capitalists of the surplus value created by the workers.

As Karl Marx put it in Das Kapital: “I have proven, in dealing with value, that every labour must leave a surplus; so that in supposing the consumption of the labourer to be always the same, his labour should create, on top of his subsistence, a capital always greater. Under the regime of property, the surplus of labour, essentially collective, passes entirely, like the revenue, to the proprietor: now, between that disguised appropriation and the fraudulent usurpation of a communal good, where is the difference?

The consequence of that usurpation is that the labourer, whose share of the collective product is constantly confiscated by the entrepreneur, is always on his uppers, while the capitalist is always in profit … and that political economy, that upholds and advocates that regime, is the theory of theft, as property, the respect of which maintains a similar state of things, is the religion of force.”

The words ‘fraudulent’ and ‘theft’ point to the link between capitalism and corruption; theft from labour is the very foundation of the capitalist system, which then sets the agenda for the capitalists’ approach to not only cheat and steal from workers but from their suppliers, their customers and rival capitalists. The only principle is: how best and most quickly can I maximise profits, legally or illegally?

In short, capitalism is based on the principle of “the sacredness of private property”. But we have explained above that ‘private property’ is in fact nothing but the surplus value that is stolen by capitalists from the workers, the labourers. Private property is nothing but value stolen from workers. Therein lies the source of the link between capitalism and corruption: capitalism is private property, is theft, is corruption!

We see, therefore, that in any capitalist system the dominant psychological human impulse is to compete to acquire private property, to steal, to be corrupt, by whatever means necessary. This rule applies to all spheres of human life, without exception.

As capitalism has become more and more monopolised and wealth and power concentrated into even fewer hands, the opportunities grow for even more ruthless manipulation of the system in order to extract even more surplus labour value from the workers and increase market share.

The recent scandals in involving Hitachi and Eskom and the deliberate falsifying of emission readings by Volkswagen are obvious examples, but are not exceptions. They are absolutely typical of the way capitalism operates.

Even some of the capitalists themselves are alarmed at the scale of the problem. According to Global Financial Integrity, an American research and advisory nongovernmental organisation, “a record $991.2-billion in illicit capital flowed out of developing and emerging economies in 2012—facilitating crime, corruption, and tax evasion”.

This morality then seeps down into the rest of society – the state, government, civil society and, yes, churches and trade unions. This was well described in an interview with Lal Singh, general secretary of the Communist Ghadar Party of India: “Capitalism has reached a stage when economic and political power is highly concentrated, and the public authority acts in the private interests of a minority of billionaires. This is true not only in our country but all over the world … The domination of the private profit motive and the growing domination of capitalist monopolies over all spheres of life is the principal cause for the exorbitant rise in corruption to a scale and degree never witnessed before. Selfishness has been elevated to the position of the most precious virtue … A specific feature of corruption in our country [India] is that it permeates the state machinery from top to bottom. We have to pay bribes even to get a driver’s licence, water supply connection or some other basic service. This constitutes additional robbery of the toiling people. It adds to the already heavy economic burden on their backs.

On top of being exploited intensely at the workplace, robbed in the capitalist market and burdened with rising taxes and inflation, workers and peasants are further burdened with having to give bribes to get what is actually their right.”

That will sound very familiar to South Africans. It is also a good answer to the false argument that corruption is not an issue facing workers. The big majority of people want to share wealth in a fair and equitable way and do not want to take out any more than they are entitled to. But they are faced daily with challenges: to pay the traffic cop to avoid prosecution, to bribe the driving test examiner to secure a licence or the housing official to get pushed up the waiting list, to promise to vote for Party X in return for food parcels?

Small business people, already facing huge obstacles placed in their path by their big business competitors, are tempted to offer a bribe to a councillor friend to secure a tender, knowing full well that rival bidders are all doing the same.

A culture of ‘me-first’ and ‘to hell with everyone else’ threatens to become universal and it is impossible to cure a disease which flows from the capitalist class which rules the state and society. Even they will occasionally wring their hands, like the Global Financial Integrity quoted above, and Business Unity South Africa, but they are utterly powerless to control or discipline their own system.

While Marxists will support any genuine measures to curb corruption and punish those who are guilty of it, there should be no illusion that it will ever disappear within a capitalist society.

Corruption is not inevitable, however, because capitalism need not be inevitable. If we can build a revolutionary, mass workers’ party, based on a programme for the socialist transformation of society – a society without private property then we can rid our societies of corruption and establish a new world order in which corruption, crime and exploitation have no place. DM

Irvin Jim is the general secretary of Numsa.


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