On Corruption

Focus on the ‘cute hoors’, their cabals and cliques appears to be largely part of an attempt by the relatively educated bourgeoisie to throw off what they see as the more embarrassing vestiges of peasant society. The primary preoccupation with corruption and bribery reveals their desire for a pristinely transparent capitalism. They denounce what such and such a person did in violation of the law of the land, turning a blind eye to legal robbery, bribery and exploitation, since they know the law is on their side in these matters. Their main subject of concern is ‘the taxpayer’, a consumer who demands value in public services for his hard-earned cash. This individual wants to see the reputation of Ireland Inc restored to its former glory, when the corporations seemed to hold the country in high esteem as they shifted labour from higher cost locations in this direction. From this point of view, it is not that there is anything essentially wrong about giving money for hospital treatments and primary schools to rich private investors to do as they please: it is the fact that it is an outrage against the principle of value for money.

3 Responses to “On Corruption”

  1. 1 Donagh August 28, 2009 at 11:13 am

    Sorry to quote at length, but it seems relevant:

    These days the world’s largest firms have a presence in more than a dozen countries and can relatively easily move production or other facilities from one jurisdiction to another, or replicate facilities in a new location. Intel, for example, has 15 identical manufacturing plants and 6 fabrication plants worldwide with employees in 45 countries. The main motivation for such corporate internationalism is cost reduction in one form or another – low wages, low costs, low taxes. As firms roam the world in search of attractive locations, they acquire far more power[ii] than the governments that host them. In general, countries seeking to attract such firms try to produce the low-cost environment they prefer by moderating wage demands, subsidising infrastructure, and/or maintaining low taxes. Of the three, taxes are the easiest to manipulate.

    Clearly tax is not the only factor, but studies consistently show that it remains a critical element. Where the tax rate is reduced to attract investment, the logical response of multinationals is to quickly locate high-profit, highly-mobile activities within the target jurisdiction. In general these are low-skill activities, such as manufacturing, which can be easily moved again to a new location if tax rates rise, or if a more attractive proposition arises.

    The idea that tax competition is healthy is ludicrous. Competition can, of course, reduce inefficiencies or produce a better product or service at a better price to the customer. This only works if the customer is free to shop around and find the cheapest offering. Obviously most taxpayers are not mobile enough to shop around for a suitable jurisdiction in which to live and work. The only taxpayers who can do this are multinational firms, who can easily move their coveted factories to a new location. Tax competition serves their needs far better than anyone else’s, which is why the EU and OECD have established working groups to curtail this harmful practice.

    When you have different politicians on either side of ‘the house’ being ideologically identical the only way they can differentiate themselves to their voters is by chicking about accusations of ‘corruption’ and of course insisting that corruption just puts corporations off doing business here.

  2. 2 Hugh Green August 28, 2009 at 12:31 pm

    Right (I fixed the link by the way). There is also the fact that ‘personal responsibility’ is a key element of a ‘meritocracy’. Therefore any failing of the system must be down to the failings of certain subjects-as-individuals.

  3. 3 Donagh August 28, 2009 at 2:02 pm

    Thanks for fixing it. I also seem to have invented a new word (again): ‘chicked’. Perhaps I was unconsciously mashing cluck with chuck – if you get me. I’ll understand if not. The reinforcing of idea of ‘meritocracy’ is important I think. By pointing fingers at those who use political office to bestow favours on their supporters they’re suggesting that they there is some sort of alternative ‘purer’ system where people get into positions of power through pure hard work – ignoring the way that power is actually structured.

    Also criticism of Fianna Fail’s profligacy during the ‘celtic tiger’ years where employment and pay in the public service ‘mushroomed’ – itself a form of political corruption as it is suggested it was done to satify short term political goals – can now be corrected with a suitably purgative solution: the McCarthy report. Like the patient with a digestive system clogged with toxins, a quick dose of salts will help to flush them out and return them to normal health.

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